Commercial

Visit the “Structure” section of this Resource Centre to learn more about the repair or rebuild portion of your claim.

Generally, if your business created it, modified it, or combined it and you then sell it (either direct to customers or to another link in your supply chain): that item will be considered inventory. If it’s a fixed asset such as a machine, container, or fixture: that item will generally be considered equipment. Most of the rest of the contents in your building will be business contents: things that are used to run the business from day-to-day.

Tools are a common feature of many different businesses, and they might even hold a special place in your policy of insurance. Some policies treat tools as their own category of content, or they might create an extra pool of money just for tools. Other policies will treat tools as equipment: something substantially “permanent” that is used to do the work you do. Look at your declaration page to see if you have a separate “tool” coverage heading, or a “tool floater” that provides extended coverage. Otherwise, consult the wording of your policy to see how tools should be categorized.

Most policies consider point-of-sale systems to be business content. These systems don’t actually create or modify anything, they simply keep track of what is coming in and what is going out.

Similarly, at a restaurant: ovens and kitchen items will likely be equipment because you use them to create and transform the food, but tables and chairs will probably be business contents.  Even though they are necessary, they do not actually perform any function in creating or modifying the product.

Visit the “Contents” section of this Resource Centre to learn more about content coverage generally, and how to identify and avoid valuation pitfalls.