What Is Business Personal Property Insurance (BPP)?

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Business personal property (BPP) insurance provides coverage for items that your business uses, rents or owns within your building  — but not the building itself. BPP insurance can help cover the cost of repairs or replacement of damaged items, up to the limits of your policy. If your business involves inventory, machinery, furniture and other equipment, you will likely need property insurance as part of your business insurance coverage.

What Does Business Personal Property Insurance Cover?

Business personal property insurance covers movable property within your workspace or "tangible assets." Tangible assets are things you can physically touch or see, like your computer or chair.

Business personal property insurance can cover the following:

  • Inventory: Any goods or supplies that your business sells
  • Furniture: Desks, chairs, and conference tables
  • Furnishings: Rugs, blinds, and carpets
  • Fixtures that are permanently attached: Cabinets and built-in bookcases
  • Appliances: Dishwashers, fire extinguishers and refrigerators
  • Heavy equipment: Forklifts, excavation equipment and machinery
  • Electronics: Computers, televisions, printers, smartphones and tablets
  • Office supplies: Notebooks, pens, staplers and highlighter pens
  • Upgrades: Additions and improvements you have made to the building
  • Personal property: Other people's personal property that is temporarily stored in the building
  • Outdoor landscaping: Fences and lights
  • Loss of income: If you can't work due to property damage

On average, BPP insurance costs around $63 monthly, but any number of factors can raise or lower that rate.

Depending on what caused your business personal property to be damaged, your insurance may or may not be able to provide coverage. BPP insurance covers replacing or repairing personal property in case of:

  • Fire
  • Explosion
  • Lighting
  • Smoke
  • Windstorm
  • Hail
  • Vandalism
  • Sinkholes
  • Riots
  • Aircraft
  • Vehicles
  • Sprinkler leakage
  • Volcanic activity

Some business property insurance policies may also cover:

  • Collapse
  • Water damage
  • Falling objects
  • The weight of ice, sleet or snow

What Doesn't BPP Cover?

Most insurance policies exclude certain causes like earthquakes, normal wear-and-tear, vermin and floods, so it's always good to go over your policy carefully to understand what it covers and what is excluded. Remember that BPP covers moveable property; it won't protect the building that you lease or own; you will need a separate property insurance policy if you want extra coverage. BPP won't cover intangible items your business owns, which includes intellectual property like trademarks, ideas, patents, copyrights and more.

BPP Insurance also excludes claims for the following damages or losses:

  • Land, bridges, roads, drains, underground pipes and bridges
  • Crops, plants, trees and shrubs
  • Certain types of personal property like money, precious metals, vehicles, accounts, bills and instruments
  • Aircraft (unless named as insured property)
  • Watercraft and its motors, equipment and trailers
  • Disks, tapes, antennas, records and other types of media
  • Business data like documents, securities, stamps, and records
  • Animals, birds or fish

Business personal property insurance covers movable property within your workspace.

Why Is Business Personal Property Insurance Important?

Businesses need inventory, equipment and other business-related items to run a business. If an unexpected accident or covered event happens, BPP can help you recover everything.

It keeps your business running

BPP allows your business to keep running, even if your business gets vandalized or a burst pipe destroys your inventory. Without being properly covered, business personal property losses can easily cause your business to fail. By insuring your business, you can get critical financial assistance in the event of a covered loss, so your business can keep running as smoothly as possible.

It saves you money

When a critical piece of property in your business is damaged or stolen, your business could potentially come to a halt until it is repaired or replaced. Without BPP, you would need to pay out of pocket to replace inventory or equipment. You could even potentially lose clients if your business has to shut down temporarily. Plus, just as personal property is a tax-deductible business expense, so is BPP insurance. To capitalize on this tax deduction, make sure to keep detailed financial records to provide to the IRS.

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How Much Does Business Personal Property Cost?

On average, BPP insurance costs around $63 monthly, but any number of factors can raise or lower that rate, depending on how much coverage you need and how much property you need to insure. The cost of business personal property insurance is generally based on a few factors:

  • Construction: The construction of your building plays a large role in how expensive BPP premiums may be because it may pose a risk to your business personal property. Is it constructed with fireproof materials or with combustible materials like wood? Does it have old or new wiring, HVAC systems and plumbing?
  • Location: Is your building located in a flood-prone area or along the coast? Do natural disasters like hurricanes occur frequently in that location?
  • Occupation: Depending on the type of business you have, it may carry more risk than other industries. For example, a notary's office typically carries less risk and is less prone to injuries than a mechanic's shop.
  • Assets: What is the value of all your business assets, including the building?
  • Fire and vandalism: Does the building have a sprinkler system and fire alarms? Does it have a good security system to prevent theft?
  • Inventory: Some businesses — like construction companies or restaurants — have expensive equipment or inventory that is necessary to run the business.

BPP allows your business to keep running, even if your business gets vandalized or a burst pipe destroys your inventory.

As with any insurance, the higher-risk a policyholder is, the higher their premiums will be. If your industry involves a lot of heavy machinery or goes through a high number of visitors, you are more likely to be exposed to risk or injury than a writer working remotely in their home office. For this reason, construction companies, restaurants and retail stores likely pay more in BPP premiums since they require higher coverage costs to protect valuable and expensive inventory or equipment in the event of a covered-disaster. Below is a graph that demonstrates how the type of business you have can affect your BPP.

Median BPP Premium Rates by Industry bargraph

What's the Difference Between Tangible and Intangible Personal Property?

Tangible personal property is a physical, movable thing you can see or touch. This can include:

  • Tools
  • Desks
  • Rugs
  • Blinds
  • Inventory
  • Chairs
  • Laptops
  • Conference Tables
  • Refrigerators
  • Computers

Professions with tangible property may include:

  • Bakers
  • Coffee shops
  • Restaurants
  • E-commerce and retail shops
  • Accountants
  • Plumbers and electricians
  • Barbershops and hairstylists
  • Florists
  • Graphic designers and advertisers
  • Consultants
  • Photo studios
  • Janitorial services

Intangible personal property includes things your business owns or rents that don't have physical property. This can include:

  • Patents
  • Contracts
  • Investments
  • Intellectual property rights (i.e. copyrights)

How To Get BPP Insurance

Most businesses can add business personal property insurance to their general liability policy or it can also be included in your business owner's policy (BOP). You can also shop around for the perfect BPP coverage for your business by having the following information ready and available:

  1. What your business does
  2. The location of your business
  3. How many employees do you have
  4. Your business' annual revenue
  5. Your inventory, equipment and property that you use, rent or own
  6. How long you've owned your business

How Much BPP Coverage Do You Need?

Generally, business property insurance contains a coinsurance clause that guarantees that you have adequate coverage to protect your valuables and possessions. Typically, BPP policy holders need a coinsurance provision of 80, 90 or 100% of the value of the covered property and its contents, which is equal to the amount the insurer will pay after the applicable deductible. For example, if you have an 80% coinsurance provision, your insurer would be expected to pay 80% of the claimed value of your business personal property.

If your insurance limit is lower than the coinsurance provision, your insurer may not completely compensate you for your losses. For example, if your inventory and equipment cost $50,000 to replace and your BPP insurance limit is set at 50%, or $25,000, and your inventory becomes damaged and needs to be replaced, your BPP would then pay your total limit of $25,000. You would have to pay for the rest yourself. If your coinsurance provision requires a limit of 80% of your property but your limit amount is less than that, your insurance company could limit the payout to the percentage you specified.

Most policies exclude certain causes like earthquakes, normal wear-and-tear, vermin and floods.


Who needs business property insurance?

Any business with tangible assets should have business personal property insurance, especially if your business could be significantly impacted in the event of a loss of property.

How is BPP different from a business owners policy (BOP)?

BPP covers property belonging to the business that is movable and not associated with the land, including anything from calculators to heavy machinery. A BOP combines general liability, business income and commercial property protection in one insurance package and costs less than if you bought each insurance separately.

Is business income included in BPP?

Business income is included when you buy business personal property insurance and can cover lost income if your business needs to temporarily close due to being lost or damaged by an unexpected covered event, like a fire or theft.

Shop Around for Affordable Insurance Rates in Florida

Business personal property insurance provides financial protection if you need to repair or replace damaged, stolen or lost business property. Keep in mind that the cost will depend on the amount of coverage you choose. If you are interested in protecting your business and its assets, SmartFinancial can help you choose the right coverage. Just enter your zip code below and answer a brief questionnaire to get free BPP quotes at the lowest rates in your local area.

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