{"id":10944,"date":"2021-10-01T00:00:47","date_gmt":"2021-10-01T00:00:47","guid":{"rendered":"https:\/\/todaysveterinarybusiness.com\/?p=10944"},"modified":"2022-06-15T17:48:10","modified_gmt":"2022-06-15T17:48:10","slug":"business-property-insurance","status":"publish","type":"post","link":"https:\/\/navc.sitepreview.app\/todaysveterinarybusiness.com\/business-property-insurance\/","title":{"rendered":"It\u2019s Personal"},"content":{"rendered":"

One of the most commonly underinsured exposures I find when conducting risk-management reviews of veterinary practices involves business personal property. Not surprisingly, business personal property, along with employment practices liability and cyberliability\/network security, are three of the more expensive risks from the standpoint of annual insurance premiums and deductibles.<\/p>\n

Business personal property insurance is a standard component of commercial package policies and typically is required when a commercial loan is sought. However, I\u2019ve found that the policy limits selected by many veterinary facilities are inadequate in addressing catastrophic losses, such as from a fire or natural disaster.<\/p>\n

The insurance has three main components:<\/p>\n

1. The Contents<\/h3>\n

Think of contents as anything not permanently attached to the building or that cannot be removed without damaging the structure. In other words, it\u2019s what you would take with you if your practice were moving. Or put another way, open the doors and windows, turn the building upside down, give it a good shake or two, and see what falls out. Of course, that\u2019s a little silly, but you get the idea.<\/p>\n

Business contents can be either owned or leased and in the practice\u2019s care, custody or control. Examples include medical and diagnostic equipment and supplies, pharmacy inventory, textbooks and office furniture.<\/p>\n

The challenge every veterinary hospital has is the enormous quantity of business personal property, much of it hidden in cabinets, drawers and storage areas or under desks and on top of cages. Inventorying it and determining its value is difficult. Yet, when accurately chronicled, the value of such incidental contents might well exceed that of the more obvious investments, such as in portable cages and surgery, ultrasound, dental, radiographic and laboratory equipment.<\/p>\n

2. Tenant\u2019s Improvements and Betterments<\/h3>\n

Known by the acronym TIB<\/a>, this category comes into play when a building is rented or leased, and it should be insured as such. A simple way to determine whether the property is an improvement or betterment is to ask yourself, \u201cIs the item permanently attached, or can it be removed without damaging the building?\u201d If you can\u2019t remove it, it\u2019s a TIB.<\/p>\n

Don\u2019t forget to consult your lease or the property owner or manager to determine which improvements and betterments are your responsibility to insure. Typically, the tenant is responsible for all TIBs purchased and installed, such as electrical, plumbing, ceilings, walls, floors, fixtures, cabinets and sinks. The landlord often accepts responsibility for replacing everything present at the time of the lease\u2019s signing.<\/p>\n

3. The Contract<\/h3>\n

I include this component in the discussion of business personal property only because it is frequently overlooked on tenant insurance policies, especially when the tenant is not required to insure the building itself as part of a commercial package.<\/p>\n

Tenants should confirm whether they are responsible for any non-owned parts of the building. Common examples include heating, ventilation and air conditioning units<\/a> and water heaters. Even if an item is not a TIB, many leases require the tenant to accept responsibility for the equipment\u2019s maintenance and replacement. Such insurance might not be included in a tenant\u2019s business personal property limit and might require a separate endorsement to the overall commercial package policy.<\/p>\n

I recommend always asking your insurance agent to review your lease agreement\u2019s section on insurance requirements.<\/p>\n

Keep a Few Things in Mind<\/h3>\n

Here are other important considerations regarding business personal property insurance:<\/p>\n