Property Insurance
What is Property Insurance?
Property insurance helps pay to repair or replace your business property when it’s damaged by a covered cause of loss, such as fire or wind. It applies to buildings/structures, fixtures and furniture, permanently-installed equipment, and similar items.
It may also apply to improvements or renovations you make to a rented space, depending on the specific policy.
Why it Matters for Beauty and Bodywork Professionals
- Without your space and equipment, you can’t do your job. Property insurance helps you get back to work sooner.
- Basic inland marine insurance (tools and supplies coverage) doesn’t cover buildings or items considered permanent fixtures (like styling chairs that are bolted to the floor)
- If you own or rent a building, landlords and banks/lenders may require it.
What Does Property Insurance Typically Cover? (+ Common Exclusions)
Property insurance is first-party coverage, meaning it protects your property, not other people’s. It typically covers:
- Damage: fire, vandalism, certain water damage, wind/hail, and theft
- Buildings: The physical structure you own, including walls, roofs, floors, and built-in fixtures
- Business personal property (BPP): Movable items owned by the business, such as furniture, computers, tools, signage, and supplies
- Inventory or stock: Goods you hold for sale, whether on shelves, in storage, or in back rooms
- Tenant improvements: Permanent upgrades you paid for in a rented space, such as shelving, counters, flooring, or lighting
- Certain outdoor property: Limited coverage for specific items like signs, fences, or detached structures
Note: Not every policy covers everything listed above. Exact coverage depends on the specific policy terms and endorsements.
What Does Property Insurance Typically Not Cover?
Property insurance typically doesn’t cover:
- Lawsuits or legal defense costs
- Unexplained or “mysterious” disappearances
- Wear and tear, gradual damage, or defective parts
- Damage due to negligence/failure to maintain equipment
- Damage due to floods and earthquakes (usually a separate coverage)
- Injury or property damage claims from others against you/your business
- Business property while it’s in transit or not in the building (usually requires inland marine coverage)
Property vs Tools and Supplies vs General Liability Coverage (Quick Comparison)
Depending on the claim, there are three types of coverage that may respond to a property damage accident: property insurance, tools and supplies coverage, and general liability.
Swipe →
| Coverage Type | Plain Meaning | Beauty and Bodywork Example |
|---|---|---|
|
Property Insurance |
Covers your business property at your premises |
A burst pipe ruins a facial bed and steamer |
|
Tools & Supplies (Inland Marine) |
Covers your movable gear off-premises and in transit |
Your massage table is stolen from your locked trunk after a convention |
|
General Liability (GL) |
Covers injuries and property damage to others |
A client trips on cord, falls, and breaks their phone |
How Are Property Damage Claims Paid Out?
Property damage claims are paid according to the set limits, deductibles, and valuation methods laid out in the specific policy.
- Limits are the maximum amounts the policy pays, both per claim and per policy period
- Deductibles are what you must pay before your policy does
- Valuation methods are how the policy decides what it pays for lost or damaged property; there are two main valuation methods insurance companies use
- Replacement Cost: Pays what it costs to replace items with new ones of like kind and quality
- Actual Cash Value (ACV): Pays the current market value of the lost items, meaning it pays either the original cost or the replacement cost of the item, minus depreciation
Related Terms
- Inland Marine Coverage (Tools & Supplies)
- Business Owners Policy (BOP)
- Replacement Cost
- Actual Cash Value
- Endorsement
- Exclusion
- Deductible
