Business Insurance: What you need to know about business stock insurance

Business stock insurance is a specific kind of business insurance which comes into play when stocks of goods are either stolen, damaged or lost. It’s therefore a very useful insurance product for any business basing its business model on the transformation of goods. What does it exactly cover, and how much does it cost?

What is business stock insurance?

Business stock insurance covers the loss or theft of stocks, or their being accidentally damaged. The exact extent of the coverage depends on the policy, and the business insurance provider.

An insurance to keep you safe when something happens to your production stock

Any business model might be summed up into one simple formula: business is about selling something for more than what it costs to produce. This very often takes the form of selling goods made of other goods, so many businesses need to keep stocks to keep the production going.  Business stock insurance comes into play when something happens to this stock: when some of it gets stolen, damaged or lost. Policyholders are indemnified so as to be quickly able to get the stock they need to bring production back on track. More often than not, this insurance product comes as an optional extra to public liability insurance products.

Typical coverage

Business stock insurance will usually cover the following:

- loss or accidental damage of tools, business equipment and trade tool up to a certain amount for each covered item;

- overnight theft from unattended vehicles;

- trade samples and promotional merchandise;

- computer equipment;

- damage caused by employees, sometimes even during personal use.

However, interested businesses should enquire whether the indemnification is based on the recommended retail value of covered items, or on the cost price.

How much does it cost?

Business stock insurance prices

Insurance policy prices greatly vary from one insurance provider to another, but also depends on the business specifics of every customer, including, as can be expected, the value and volume of stock items which need to be covered. This also means that stock insurance prices will vary over time for the same company and the same insurance providers, as stock levels are meant to significantly change. It is therefore essential, not only to give the insurer a complete information about the business when asking for a quote, but also, to keep the insurer informed of any changes in operations during subscription time.

Evaluating the necessary coverage

Another essential tip to keep insurance costs down is to carefully evaluate the necessary coverage. Not all stocks needs to be insured, and businesses should therefore think about the following in order to evaluate the necessary coverage:

- adding up all costs of essential equipment replacement, including employee equipment;

- check already subscribed insurance policies to know what is already covered, so that the business stock insurance doesn’t double up with another product that you are already paying for.