Business contents insurance

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Page written by Chris Godfrey. Last reviewed on September 24, 2024. Next review due October 1, 2025.

Business contents cover is designed to replace the contents of shops, offices, restaurants, surgeries, garages, workshops and almost every other type of business in the event of fire, flood, theft, vandalism and accident. Use business contents insurance to replace cash, and pay for new fixtures and fittings, equipment, stock and samples, raw materials, and employees’ personal belongings if they’re damaged, lost, or stolen.

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What is stock insurance?

Stock insurance is a specific type of business insurance known as contents cover. It pays the cost of replacing or repairing your stock or inventory in the event that it is partially or totally lost, destroyed or damaged due to fire, theft, flood or malicious damage.

Why is business stock insurance important?

For many US SMEs and sole traders, the bulk of their business worth is tied up in the stock they have on-site or in a warehouse. Often, the value of these goods and materials can run into the hundreds of thousands or even millions of pounds. If the stock was uninsured and it was suddenly lost due to any of the circumstances listed above, the impact on the business could be catastrophic. Instead, stock insurance eliminates this type of risk, allowing your business to continue trading even if the worst should ever happen.

Use stock insurance to protect:

Raw materials
Finished goods
Work in progress
Office supplies
Goods in transit

Does your business need stock insurance?

If you keep stock and inventory on your business premises, or in a warehouse, then yes you do. Some general business insurance policies may exclude stock and inventory, or only provide protection up to a very low limit. Additionally, some stock, such as frozen foods, inflammable products, paints and chemicals and valuable machinery will require special stock cover due to higher risk.

What's covered by a stock insurance policy?

Stock insurance will pay to repair or replace your stock if it is destroyed, damaged or stolen via these types of incidents:

Theft

Stock insurance will cover the cost of replacing your stolen stock up to the limit of your policy.

When would I claim? Example:

Your shop is broken into, and your entire stock of consumer electronics are stolen, leaving you unable to fulfill current or future sales.

Fire

Covers your stock and inventory if it is damaged or destroyed in a fire at your premises.

When would I claim? Example:

A short circuit causes an electrical fire that spreads to your stockroom, destroying everything within.

Flood

Covers your stock and inventory if it is damaged or destroyed by flooding, either through manmade or natural causes.

When would I claim? Example:

Heavy rain floods your store room, damaging the fashion goods you were intending to sell.

Malicious damage

Protects you from loss if your stock if damaged or destroyed by vandalism or an act of malicious damage.

When would I claim? Example:

Someone breaks into your gift shop and pulls down a rack of expensive glassware.

Are there any limits and exclusions on stock insurance?

All insurance policies have some exclusions and special terms and conditions, and stock insurance is no different.

Here are some common exclusions to be aware of:

Stock insurance will typically exclude deterioration of goods due to a change in temperature or as a result of electrical or mechanical breakdown—in other words, frozen food wouldn’t be covered as standard.
Stock insurance will not protect you if your premises are not secured in the way you specified when you took out the policy.
There may be a financial limits on wines, spirits and tobacco products.
Stock stored in a basement is typically not covered unless it is on a rack at least a minimum distance off the floor.
Insurance will not pay out for damage due to wear and tear, light, moths, vermin, insects, damp, deterioration.
Stock insurance does not cover stock shortages or damage identified only whilst taking inventory.
Nor will it cover stock loss or damage resulting from dishonesty or fraud by an employee or a person lawfully on your premises.

How much does contents insurance cost?

Premiums for stock insurance can start at less than $20 per month, but actual costs will depend on your business type, your location, the security of your premises, the value of your stock, and the level of excess you agree to pay.

How Swoop can help

All business involves risk, but that doesn’t mean you have to suffer the consequences if things go wrong. Don’t let the loss or damage of your stock call time on your business. Contact Swoop today to compare top-quality stock insurance from different providers and to discuss all your business insurance needs.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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