Property insurance: covering equipment, but above all preserving the business

Good choices are based on value, scenarios, and evidence.

SME property insurance covers, in principle, material damage suffered by the contents of the company: goods, stocks, machines, tools, furniture, IT equipment, sometimes mobile installations, according to the definition of the contract.

It is aimed at both tenant SMEs and owner SMEs, and it becomes strategic when content represents a lever for production or sales.

In practice, the contract is often structured by event: fire, natural disasters, water damage, burglary, vandalism, machinery breakdown, or damage to property, depending on the options chosen. The exact coverage depends on the selected guarantees, the declared value, and any specific clauses related to your business.

What the policy usually covers includes the replacement or repair of insured property, on a defined basis (new for old or current value) and within contractual limits.

The question of value is crucial. Underinsurance can reduce compensation, and over-insurance offers no advantage. For inventory, the difficulty lies in fluctuation: seasonality, volume peaks, and products with high unit value.

Some contracts include suitable mechanisms, but these must be chosen consciously. Another sensitive point: leased, loaned, or deposited goods. Depending on the circumstances, they are not automatically covered, or they must be declared.

Points to watch out for include common exclusions: wear and tear, lack of maintenance, progressive damage, software failure without hardware damage, or events not covered by the warranty.

Theft is a typical case where the conditions are strict: protective measures, type of closure, night storage, alarms, and evidence of forced entry.

Water damage is also a sensitive issue, with possible exclusions for slow-moving leaks or lack of maintenance. Deductibles vary by event, and sub-limits may apply to certain assets (valuables, cash, prototypes) or certain expenses (debris removal, leak detection, emergency measures).

For an SME, the most costly mistake is to focus solely on material damage and neglect business continuity. That's why business interruption insurance, often linked to property insurance, deserves careful consideration.

According to the contract, it may compensate for lost profit margins, certain fixed costs, or additional expenses incurred to continue serving customers (equipment rental, subcontracting, temporary site). Here too, waiting periods, maximum durations, and sub-limits may apply.

Choosing the right level of coverage is done with a simple decision-making framework. First, establish a realistic inventory: average and peak stock value, value of critical machines, value of the IT infrastructure, and dependence on a few pieces of equipment.

Secondly, define your shutdown scenarios: how many days can you absorb without producing or delivering, what are the alternatives, and what would the cost of the interruption be.

Thirdly, select the relevant coverages: theft, water, breakage, internal transport, and business interruption, depending on your business.

A useful mini-list includes checking the value basis (new or current), stock variation mechanisms, security requirements against theft, deductibles and sub-limits, and documentation expected in the event of a claim (invoices, inventories, photos, reports).

Mage & Associates can help you define the value and scenarios, then structure a clear and workable policy. A policy review and risk analysis ensure that the coverage matches your actual assets, and that you can quickly prove your worth and rebuild in the event of a loss.