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In order for your business insurance policy to work—and by work, we mean help you get back up and running after an insurable incident—you must understand what your business owns and about how much each item is worth. The most comprehensive way to do this is to create a business inventory. 

A business inventory ensures that you will not forget to put in a claim for under-utilized, but necessary, piece of business equipment or stock. Why does this matter so much? Because once you make your claim, that’s it. You are not given the leeway to suddenly remember that you forgot to claim an item that your business only uses once a year. You will not be allowed submit another claim to your insurance company, months after the insurable event occurred.

Business inventories supply you with proof of the condition of your items prior to the insurable incident. They also help ensure that you will be more likely to get everything you deserve from your insurance company after a claim resulting from property damage or theft.

Steps to Creating a Business Inventory

A business inventory is an important component of disaster planning. These following tips will help you to create your comprehensive business inventory. 
  1. List all the rooms within your business location on a separate sheet of paper or spreadsheet on your computer. This includes your office, storeroom, bathroom and all other rooms.
  2. Go into each room with the paper (or spreadsheet) for that room and start listing all the items you see. Include artwork, equipment, stock, etc.
  3. Under each item, add all of its pertinent and identifying information. Include (when possible) model numbers, original purchase price, a description of the condition of the item, the date purchased, and any other distinguishing characteristics. If possible, staple a copy of each item’s purchase receipt to the individual sheets.
  4. Add pictures: While this is not a required step in creating a business inventory, pictures of the rooms and some of the more valuable contents will serve as a useful tool in determining the condition of your property should you have a claim. If the commercial property policy you purchased reimburses actual cash value for damaged or stolen property, the more proof you have of the condition of your property the more likely you will get reimbursed an amount that you consider fair.
  5. For items that require routine maintenance, such as factory machinery, keep track of the maintenance as it is done and attach copies of receipts. This will help your insurance company and adjuster identify the condition the items were in at the time of the claim.
  6. Keep the list updated. It’s a good idea to mark your calendar with a semi-annual date to take the lists around the office and update them. If you can update them as soon as changes are made in your office, that is even better.
  7. Include “outside” information. If you have any company vehicles or items kept outside your main business building, create a separate list for them and take the same steps.
Storing Your Inventory

A copy of your inventory should be sent to your insurer. You should also keep a copy handy. Make sure you keep it in a safe, fire resistant location that you will be able to access after an insurable incident. Make sure you regularly update the copy given to the insurer. 

While your business inventory is a must-have for potential insurance claims, it has other uses too. The inventory can help you determine depreciation when tax time rolls around, can help you work out a regular maintenance schedule for your expensive and valuable equipment and can keep you in touch with the true value and liabilities of your company. 

The Insurance Information Institute also offers the Know Your Stuff: Business Inventory program that offers instructions on how to create a business inventory and provides online storage so that you can access your inventory anywhere, anytime. Keep in mind, there is a monthly fee associated with that application. 

We at Donahue-Stangle-Brown and Cope Insurance Agency are an independent insurance agency that represents several insurance companies here in Ohio.  Let us do your insurance shopping for you.  We offer a wide range from auto insurance,home insurancebusiness insurancebusiness auto insurancelife insurance andfarm insurance.  Please contact one of our professionals today at 740-998-5544 in Frankfort or 937-981-2272 in Greenfield.  You are also welcome to contact us via EMAIL.
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