Got It Covered?

Do you know what to expect from your insurance company if you experience a covered loss? Most small commercial property policies pay replacement cost coverage, which means the cost to replace the property without a deduction for depreciation, up to the policy limits and subject to the policy's deductible. "Be sure the limits on the policy reflect the replacement value," says Brian T. Kearney, assistant vice president of commercial lines product development for The Hartford in Hartford, Connecticut.

"Know the extent of your inventory and what it would cost to replace [it] in today's dollars," Kearney says. And review your policy annually to be sure you're covered.

Some policies automatically apply an increase in coverage to protect policyholders against increasing replacement costs. Also, many insurers offer endorsements for seasonal fluctuations in inventory, so documenting what you have is critical, says Kearney.

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Replacement cost is standard in most commercial property policies, but check yours to be sure that's what you have.