Asset Insurance

What is Asset Insurance?

Asset insurance is insurance that mitigates risks relating to the sudden and accidental damage of the assets owned by your business. Any asset insured by an insurance company should be repaired or replaced by the insurance provider if it is damaged or destroyed. The scope of business assets that exist and need cover is vast, and asset insurance can take many forms. Often business owners opt to include asset insurance in a general business insurance policy, but some providers offer it as a standalone product too.

Does My Business Need Asset Insurance?

Assets are vital to every business, its operations and success. Every business owns assets, and the kind of assets you own will be different depending on your industry and end-product. Retail businesses may own a large amount of stock products, while corporate offices may own office equipment. Sole proprietors may own movable valuables like laptops and cameras, while service-based businesses like attorneys, doctors, and psychologists will own assets that enable the proper functioning of their business.

Property can often make up a large portion of the value of assets owned by a company too. Your business offices, warehouses, factories, and other property may be at risk for damage due to fire, theft, or natural disasters. Should damage or sudden loss occur to your assets, whether products, stock, property, or equipment, asset insurance comes into play.

What Does Asset Insurance Cover?

Anything that is an economic resource and has value in the context of your business could be considered an asset. All your assets can be protected from possible risks to mitigate losses and damages to your business. Loss of key assets like a piece of machinery or a communications system can devastate your business operations, reputation, and bottom line.

Asset insurance provides cover for situations where assets are damaged, broken, or stolen. The cover provided will depend on the insurance provider you choose. Each provider has its own included benefits and insurable events. Some providers offer comprehensive plans that include other types of insurance, while others offer specialised asset insurance that caters to the unique risks of your industry.

What Type of Asset Insurance is Important for Businesses?

Assets can fall into four general categories: contents, buildings, vehicles, and intangible assets, for example data and intellectual property. Many people will be familiar with asset insurance in the context of personal insurance where home contents, home building, and movable and immovable objects insurance is often offered under one umbrella policy. Similarly, business insurance can encompass all these categories and more.

Business Asset Insurance for Fleet & Motor

Your industry will influence your need for different kinds of asset insurance, including whether you need asset insurance for vehicles. If your company owns any cars, trucks, or vehicles, they should be insured. Vehicle insurance in this context insures the actual vehicle itself, offering cover should it be damaged, broken, or stolen.

Asset insurance for vehicles will often be included in comprehensive business vehicle insurance plans. Sometimes it can be purchased as a standalone product for business fleet protection. Many plans will require the insured’s drivers have valid South African driver’s licenses and for vehicles to undergo a roadworthiness test. Most policies will also include roadside assistance as an added benefit.

The difference between vehicle asset insurance and third-party vehicle insurance is that asset insurance insures your car or vehicle should it sustain damage, but third-party insurance insures a third party’s assets when you are liable. Both are important and often combined in one insurance offer from providers.

Read more about Asset Insurance

Movable & Immovable Contents Insurance for Business Assets

Some businesses own things that stay in the office or on the operations floor, while others own valuables that are moved often. Both types of assets can be insured through asset insurance for contents, although policies will likely take different forms. You can get a combined insurance option for business assets, and many business owners opt for a comprehensive plan because of the convenience.

Other business owners may want the flexibility and specificity of choosing how each area of their business is insured. In each case, an asset register that is updated regularly will be vital. The value of each insured item must be provable at the time of the loss or damage. Keep receipts, licenses, and certificates relating to each asset in a physical file and digital space. Remember to send these to your insurance provider each time they are updated.

Some insurance providers allow the insured to choose umbrella cover, or a general contents insurance that will pay out a certain amount in the event of the loss of any asset. This type of insurance could save money, but it could also mean substantial loss if something happens to an object that is more valuable than the amount insurance will pay out. This is why specific contents insurance is recommended, where you insure each item for its replacement value.

Buildings & Structures Asset Insurance

Property, buildings, and structures remain one of the most costly and valuable assets a business can own. Insuring against possible damages or losses can protect you from extensive financial implications. In South Africa, the risks involved in property ownership are unique. Before you purchase buildings and structures asset insurance, ask your insurance provider of choice whether events you are at risk for are covered. Insured events can include fire, flood, and natural disasters. Some customisable or specialised insurance policies may encompass a broader scope of risks too.

Any business owner interested in long-term success should treat business asset insurance as an investment and not an expenditure. Consider its critical importance in unforeseen events and maintaining business feasibility if extensive damage and loss occurs. The cost of asset insurance does not outweigh the stability and peace of mind offered by a good policy.

DISCLAIMER: The information provided in this article is meant for informational purposes only and should not be construed as legal, medical, or financial advice. Facts stated in this article are correct at the time it was published.

Sources: santam; 1300insurance; policyx;