Often denoted as 'BPP', Business Personal Property refers to non-real property owned by a business. This article will answer questions such as, 'what does business personal property cover?', 'when should business personal property coverage be purchased?', 'what isn't covered by business personal property?', 'what endorsements can be used with business personal property coverage?', 'what are some limitations of business personal property coverage?'.
Business Personal Property (BPP) coverage is the most basic property coverage offered for businesses and organizations. Similar to Personal Property coverage in a Homeowner's policy, Business Personal Property covers nearly all items of value that aren't considered a structure, fixture, automobile, watercraft, or aircraft. This would include items such as desks, chairs, tools, equipment, appliances, furniture, etc. BPP also covers Mobile Equipment, which includes items such as Bobcats, forklifts, and other mobile pieces of equipment that aren't meant for use on public roads and are not required to be licensed with the Department of Motor Vehicles.
BPP coverage is usually subject to Coinsurance, and it will usually have a Deductible. The rates used in determining BPP premium depends on what the property is being used for. To easily illustrate this, think about the exposures and types of property an office would have versus the property of a lawn maintenance contractor—the risk is most certainly higher for the contractor. Additionally, BPP coverage will also be subject to one of the Cause of Loss forms.
One of the biggest limitations of the Business Personal Property coverage is that the items are only covered if the loss happens when the items are on/in an insured location. Most policies have a certain radius around a specified location that would also be covered. Consequently, any BPP items taken away from the insured location may not have any coverage, or may have severely restricted coverage.
There are many ways to broaden the coverage provided by BPP coverage. Below are some of the most common coverages that are similar and/or intertwined with BPP:
Electronic Data Processing (EDP): This coverage would insure computers and other electronic devices that transmit and process data. Depending on the language used in the policy, these items might not be covered or might be subject to a sublimit.
Inland Marine: BPP coverage only applies for the locations listed on the policy. To have coverage for BPP items when they're away from the insured locations, an Inland Marine policy would be required. Many different versions of Inland Marine exist, and they are used to provide specialized coverage.
Tenant's Improvements & Betterments: When a business rents the space they use, discrepancies might occur when determining if items are part of the structure or part of the tenant's BPP. This endorsement clarifies which items are covered by BPP.
Stock: Stock, as in inventory or wares held for sale, is not normally covered by BPP. However, endorsements are available to add coverage for stock. Most commonly, the stock would be added to the overall BPP limit.