Nobody likes to think about the worst case scenario. But if you’re running your own business, sometimes you need to plan for the worst. If the worst should happen, there are a number of different insurance policies available to protect your business. 

Here, we’ll be talking about contents insurance. Specifically:

  • What is contents insurance?
  • What is covered by Contents Insurance?
  • What is not covered by contents insurance?
  • How much does contents insurance cost?
  • What happens when I make a claim?
  • Do I need content insurance for my business?
  • What if I work from home?
  • Is Contents Insurance tax deductible?

What is contents insurance?

It’s also known as commercial contents, business property, or business assets insurance. A typical business contents insurance policy will cover damage or loss to furniture, tools and equipment as a result of a fire, flood or theft.

Contents insurance protects items within a certain premises. The contents are protected against loss, theft, or damage. 

Normally contents insurance is discussed alongside home insurance, but you can also take out a contents insurance policy for your business premises. So, if any equipment, plant, or machinery is lost, stolen, or damaged, you won’t have to pay out to replace it. 

What is covered by contents insurance?

Business contents insurance policies can protect your valuables from events that are outside your control that would cause you to need a replacement. 

Every insurance company is a little different. But generally speaking, most business contents insurance will protect you against:

  • fire
  • flooding
  • storms
  • malicious damage
  • earthquakes
  • explosions
  • theft

When you take out a policy, you will have to give details of any items in the property and value the items owned by the business. Business contents policies tend to offer cover for the following equipment, objects and materials as standard:

  • fixtures and fittings – this can include flooring, lighting, office equipment or kitchen utensils and appliances
  • furniture –  like desks, chairs, shelving units
  • office equipment: this might include computers, printers, scanners and modems
  • manufacturing equipment and tools:
  • the belongings of any staff or clients in the building

It’s worth knowing that you can insure intangible assets as well as physical objects. Examples of intangible assets could be intellectual property like patents, trademarks, or valuable business data you might have.

What is not covered by contents insurance?

Unfortunately, contents insurance doesn’t cover every scenario. We can’t speak on behalf of every insurance company, but contents insurance usually doesn’t cover damage caused by:

  • general wear and tear
  • faulty design and materials
  • storage conditions like dampness, dryness, mould, fungus, rot, rust, corrosion, or vermin and insects. 
  • mechanical or electrical breakdown 
  • theft if your premises aren’t properly secured 
  • loss or damage from dishonesty or fraud by an employee

How much does contents insurance cost?

The amount you pay for contents insurance (your monthly premiums) will be different depending on the total value of the contents you want to cover and the industry you work in. 

Most insurance sites will give you a specific quote after they have this information. But, generally speaking, most insurance companies will charge somewhere between £6-£10 per month for contents insurance. 

Here are some of the more popular sites, and their starting prices for contents insurance:

  • Simplybusiness – £6.79 per month
  • Insurance Octopus – £6.30 Per Month
  • Superscript – £9.33 per month

What happens when I make a claim?

This will vary depending on the policy you buy, so you should double check. In the event of a claim, insurers will do 1 of 3 things::

  • repair the damaged items
  • replace the damaged items
  • reimburse you the money that it costs to buy a new one

If you prefer one over the other, be sure to ask the insurance company what kind of protection they offer. 

Do I need contents insurance for my business?

If you run your own business, you’re not legally required to take out a content insurance policy. The only insurance policy you actually have to buy is employers liability insurance (if you have employees).

Even so, it’s definitely a worthwhile policy to take out, especially if you work with a lot of expensive equipment, or your business premises are easily accessible to the public.

For example, if you run a construction business, then the tools, materials, and machinery you use are incredibly valuable, and the site itself is in public view. 

Some insurance sites will offer ‘business insurance’ packages that are specifically tailored to your business needs, rather than having to take out different individual policies.

What if I work from home?

If you work from home, your regular home insurance probably won’t cover any business equipment and stock you have in your house, so you’ll need to take out a separate business contents insurance policy.

Even if you’re a small business that only keeps a few valuables for your business, it’s probably worth getting them insured. For example, if you have a computer you use for work, a business contents policy will allow you to get up and running much faster if it’s damaged or stolen. 

Is Contents Insurance tax deductible?

As long as it’s wholly and exclusively for business purposes, you can claim any insurance policies you take out as a business expense.

This means you can deduct any amount you spend on business contents insurance from your total taxable income. 

For example, if you make £30,000 in a year, and you spend £200 on insurance policies, you can deduct it before paying taxes. So you’d only pay taxes on £29,8000. This is called your taxable income. 

Keep track of your finances with Countingup

The Countingup business current account makes it easy to manage all your financial data in one simple app. The app comes with free built-in accounting software that automates the time-consuming aspects of bookkeeping and taxes. 

You’ll receive real-time insights into your cash flow, profit and loss reports, tax estimates, and the ability to create invoices in seconds. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward.

Find out more here.