Do you need a business property inventory?

February 16, 2022 | Written by Nancy Nicklow, CPCU. AAI

How to create a business property inventory

Having the right business property insurance policy is great.  But not having the proper business property inventory can cause major problems if you have a claim.

After a loss is not a good time to try to re create a business property inventory list.  It may be too late to do a full accounting of your business contents.  And because of this, you may not be able to recover their value in the claim process.

Creating a detailed business property inventory is nobody’s favorite task.  But it is an important one. And it is a must have in event of a theft, fire, or natural disaster.

Here are some tips for creating a successful business property inventory for your records:

• Make a video of your business property and contents. Use your phone to take yourself on a video tour of your property and narrate the contents. Think about when you might have purchased the items or where you purchased them from.   Make sure that it has a date stamp on your photo or video log.
• Be sure to include essential replacement items or improvements you made to the property (this is especially useful if you lease your space and have made custom builds). Remember that cost of improvements and betterments need to be listed on the tenant’s policy.
• Document everything – your flooring, carpets, window treatments, security systems, HVAC, exits, light fixtures, reception areas, artwork, collectibles, break room appliances, inventory, computer equipment and so forth. Keep a record of all the appraisals and receipts for high-end items, collectibles, memorabilia, and artwork. Restaurants and high-end providers, for example, often have unique artwork and memorabilia that could represent a considerable loss in a disaster.
• Do not forget about inventory and items in the warehouse.  Even though this might vary daily it will show what you normally keep there.
• You will want to replace your business property in case of a catastrophe. That also includes everything inside the building.  So document those things. (If you have mahogany flooring and custom-built lighting, for example, you will want sufficient reimbursement to replace them.)
• Keep a receipt and serial number record of all expensive items. Store all documents off-site or scan them into the cloud.
• Secure and back up all contracts, business receipts, vendor information, inventory, business documents and licenses, and detailed records for operations. These will be needed to rebuild your business in the event of a catastrophe.
• Do you have a business interruption policy?  You’ll need to account for the previous year’s receipts to prove up your vendor expenses, business income, payroll, services and other information to rebuild your case for a loss of profits.
• Do not forget to include things you have stored away. You might have seasonal or surplus items, but you will need to consider their value (whether they are on display or not) in the event of a total loss.
• File your inventory off-site or in the cloud. Keep these records in a place that is easy to access and off-site (if your business is destroyed or inaccessible).

What do you do after you make your inventory list?

Once you have completed your inventory, it is common to realize that you have more than you thought you did.  So, give us a call to discuss your limits for the contents, betterments and artwork or memorabilia that you might have.

We hope you never have to file a claim, but if you do, you will be prepared.