When considering insurance premiums, businesses and homeowners sometimes lose sight of the fact that a deductible is not the only factor determining cost. More often than not, the cost of insuring property, whether for a business or an individual, is driven by vulnerabilities to loss. Or, in the very specific language of the insurance industry, “property exposures.”
Property exposures are any assets that are susceptible to loss. Loss can be defined as instances that cause property to be damaged, destroyed or to disappear. These exposures combine to provide an overall assessment of the risk entailed in insuring property. Simply put, property exposures are all the factors that can impact property owned by your family or your business.
Let’s look at property exposure for both businesses and homeowners:
Business Property Exposures
Most businesses are complex operations that involve the interaction of employees, customers, equipment and facilities. There are many kinds of exposures that are inherent to particular types of businesses. The top business exposures are property, business interruption and liability. Other areas that leave a business exposed are employee injuries, environmental factors, key personnel loss and contracts.
Personal Property Exposures
Homeowners generally have two types of property loss exposures, real property and valuable personal property. Real property includes land, buildings, attached structures, plants growing on the land, and anything embedded in the land, such as minerals. Personal property includes all other items owned by a policy holder, such as computers, clothing, furniture or artwork. Most homeowners have exposures in both categories. All of these things can be exposed to loss and are therefore considered when determining policy structure and pricing.
How, then, to adequately protect your home or business? It’s a good idea to conduct a review of your coverage on an annual basis. Begin with an analysis of what you own. For homeowners, this means taking stock of newly purchased items like boats, computers, high-end bicycles as well as jewelry and watches. Also include additions to your home such as decks, patios and outbuildings. All of these property types increase your exposure to loss.
Business owners have a bit more complexity in their annual insurance review. Inventory on hand is a crucial exposure and should be tracked more frequently. Changes to a business’ physical footprint and number of facilities are also important. If you’ve purchased or sold equipment or are leasing new vehicles, your business’ property exposure is impacted.
Confused about how best to proceed? Let your insurance broker know you’d like to review your property exposures. They can then begin an analysis of your holdings and property and determine what is exposing you to the greatest degree of loss. This will most likely change over time so it’s important to conduct a regular review.
Oakbridge has been helping neighbors protect against loss by examining property exposures at both the home and business. Our qualified teams of risk experts can help you determine any changes that will need coverage or need to come off your policy.
Oakbridge is a top 100 Independent Insurance Agency. We’re deeply rooted in communities across the Southeast and have been protecting our neighbors for nearly 100 years.