Property insurance can be purchased on:

" The basis of the property's actual value - replacement cost minus depreciation,
" The replacement value - the cost of replacing the item without depreciation, or
" An agreed upon amount - commonly seen with art and other unique items.

Basic property insurance covers your losses in the event of a fire or lightening strike. It will also pay for the cost of removing property to protect it from loss. A standard small business policy will protect your losses from windstorms, hail, explosions, riot and civil commotion, and damage caused by aircraft, autos or vandalism. Option coverage can be purchased that will protect your property losses from earthquakes, floods, building collapse and glass breakage.

The Independent Insurance Agents & Brokers of America offer a checklist of property to insure:

" Furniture
" Equipment
" Supplies
" Buildings and other structures, leased and owned
" Leased equipment
" Money and Securities
" Inventory
" Records of accounts receivable
" Improvements you make to the premises
" Machinery
" Boilers
" Data processing equipment
" Valuable papers, books and documents
" Mobile property
" Satellite dishes
" Signs, fences and outdoor property
" Intangible property, such as trademarks

Inventory of your property

You should have a complete inventory of your business property. Determine the value of each item you insure. If the items you want to cover are not provided for in a basic policy, you should purchase more coverage.

For example, even if your business rents a space, your lease may require you to carry certain types of insurance coverage. Just because the building owner has insurance on the building, that doesn't mean that your equipment is covered.

All-risk policies are sufficient for the average small business. These policies offer coverage for all perils except those specifically named in the policy. Consider your insurance needs when looking for coverage.

Small-business insurance should be the specialty

You want to find an insurance company that specializes in small-business insurance coverage. Coverages vary from company to company. It is important to remember that coverage isn't necessary standard. You need to read the small print to make sure that your needs will be met.

Deductibles for property insurance are calculated on a per-claim basis or an aggregate basis. You will pay less in out-of-pocket costs for per-claim deductibles, so if you have a low-risk of ever filing a claim, this might be the option for you. Companies that could suffer a lot of claims often are better off with an aggregate basis of calculating deductibles.

You need to make sure that the item is insured for its full value. Check the terms of the policy for reimbursement levels. You may have $1 million in total coverage, but there are often limits to different categories of property.

If your company has a variable growth pattern, you may not want your policy to automatically renew each year. You will need the opportunity to review your policy and adjust it as needed.