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How to Build Your Commercial Property Inventory for Insurance
It's not just your building you need to insure, but your contents as well. Tracking your property's inventory is essential for effective coverage. Here's what you do.
As a commercial property owner, you're well aware that your investment extends far beyond the building itself. The contents of your property, from office furniture to specialized equipment, represent a significant portion of your asset's worth. But have you considered what would happen if disaster struck? Without a comprehensive inventory, you might find yourself struggling to recall and prove the extent of your losses. This guide will help you create — and maintain — a thorough property inventory, an essential tool for protecting your investment.
The Power of a Property Inventory
A detailed inventory of your commercial property's contents is more than just a list — it's a powerful tool that serves multiple purposes. If something bad comes to pass, a comprehensive inventory can speed up the claims process and help ensure you receive fair compensation. It also assists in accurate property valuation, which is key for insurance coverage and potential sale scenarios.
Beyond these practical applications, a thorough inventory helps you identify potential risks and make informed decisions about your insurance coverage. It can even prove valuable for tax purposes, aiding in depreciation calculations and other financial matters.
Craft Your Inventory
Creating a comprehensive inventory might seem daunting, but with a systematic approach, it's entirely manageable. Start by deciding on a method for recording your inventory. While paper records can work, digital options like spreadsheet software or specialized inventory apps offer advantages in terms of easy updating and backup.
Once you've chosen your method, it's time to get to it. A room-by-room approach ensures you don't miss anything. As you go, document everything from furniture and fixtures to office equipment, specialized machinery, appliances, electronics, and even valuable decor or artwork. For retail or warehouse spaces, don't forget to include stock or inventory.
For each item, record key details such as a description, make and model (if applicable), serial number (for electronics and appliances), estimated value or original purchase price, date of purchase, and the item's condition. These details might seem excessive now, but they can prove invaluable if you need to file a claim.
While cataloging your possessions, don't overlook the power of visual records. Photos or videos can be invaluable in proving the existence and condition of items. For major purchases, keep digital copies of receipts linked to your inventory.
Remember to look beyond the interior of your building. Include items in outdoor spaces, storage sheds, or detached structures. And don't forget about fixed assets — while they might seem obvious, built-in features like custom lighting or security systems are important to document.
Keep Your Inventory Current
Creating your inventory is just the first step — keeping it updated is just as important. Set a regular schedule, maybe quarterly or twice a year, to review and update your inventory. When the reminder pops up, don't dismiss it out of hand: You never know what might happen in the future. So as you acquire new items, add them to your inventory immediately. Similarly, when you sell or get rid of items, remove them from your records.
It's also important to reassess values periodically. This is especially true for technology, which can depreciate quickly. Maybe you bought a server for $15,000 last year, but in a decade, it…won't be worth that. Sorry to break the news.
By keeping your inventory current, you ensure it remains a useful tool for insurance and financial planning purposes.
Safeguard Your Inventory
Your carefully crafted inventory won't help if it's lost in the same disaster that damages your property. Protect your hard work by keeping digital copies stored in the cloud or on secure off-site servers. Don't rely on a single copy — have at least one backup in a different location.
Share access to the inventory with trusted employees or partners in case you're unavailable when it's needed. It's also wise to inform your insurance provider that you have a detailed inventory and provide a copy if requested.
Harnessing Technology
Modern technology can simplify the inventory process considerably. Mobile apps allow you to catalog items, scan barcodes, and upload photos directly from your smartphone. For a quick visual record of entire rooms, consider using 360-degree cameras.
For large inventories, asset tagging with QR codes or RFID tags can make tracking items more efficient. And don't underestimate the value of secure cloud storage solutions — they ensure your inventory is always accessible and backed up.
A Worthwhile Investment
Building and maintaining a comprehensive property inventory requires time and effort, especially if you're starting from scratch. However, this investment can pay off significantly if you ever need to file an insurance claim. Moreover, the process often reveals insights about your property that can inform your risk management and insurance strategies.
Remember, your inventory is a living document that should evolve as your property does. Regular updates and smart use of available technology can make this ongoing task manageable and even straightforward.
Don't wait for disaster to strike before realizing the importance of a thorough property inventory. Start building yours today, and reach out to Janover Insurance Group for expert advice on how your inventory can inform and improve your insurance coverage (and bag a free quote, while you're at it). Your future self will thank you for it!