Property insurance for businesses

Property insurance can cover your business property if it is damaged or stolen. This can include furniture, computers, machinery, tools and stock, as well as buildings owned by the business. Common covered losses are fire, water leaks, burglary and theft. Property is one of the core parts of business insurance.

How property insurance works

1. Business property is damaged or stolen. A pipe bursts overnight, or someone breaks in and takes the computers.
2. You limit the damage and report it. Turn off the water, report a break-in to the police and notify the insurer as soon as you can. Keep receipts and take photos.
3. The insurer assesses the damage. It goes through what happened, what was damaged and the value of the property.
4. Compensation is assessed. If the loss is covered, the insurer may pay for repair or replacement, subject to the policy limits and deductible.

What it covers

The exact scope is in your försäkringsbrev (the policy document) and your policy terms. These are the most common parts.

What is insured

• Equipment and contents: furniture, computers, phones, tools and machinery.
• Stock: raw materials and finished goods.
• The building, if the company owns the property. If you rent your premises, the landlord's insurance usually covers the building, while yours covers what you keep in it.

The usual kinds of damage

• Fire, and often smoke and soot after a fire.
• Water escaping from pipes and appliances, such as a burst pipe or a broken dishwasher.
• Burglary and theft, when someone has broken into locked premises.
• Storms and natural events, such as high winds or lightning.

The insured amount

The insured amount sets the insured value or limit for the property. How compensation is calculated depends on the policy. It should match what it would actually cost to replace your things. If the amount is lower than what the property is worth, that is called underinsurance. The payout can then be reduced in the same proportion, even for a smaller loss: if the property is insured for half its value, you may get half the loss paid. The policy terms can have other rules. Review the insured amount when you buy new equipment or your stock grows.

What is not usually covered

• Wear and tear and poor maintenance. Gradual deterioration is generally excluded.
• Theft without a break-in. Things that go missing from unlocked premises or an unlocked car are often not covered, or only up to a lower amount.
• Vehicles. Cars and other vehicles are insured with separate motor insurance.
• Lost income. Losses caused by a temporary closure may be covered by business interruption insurance, not by the property part.
• Damage inside your IT systems. Data destroyed in a breach usually belongs to cyber insurance.

Who might need property insurance?

Property insurance can be useful for any business that owns valuable equipment or stock. It matters most to companies with stock, machinery or expensive equipment, such as retail, manufacturing and construction and trades. Even a consultancy with a few computers and an office has property to protect. It can be relevant to consultants, IT consultants, accounting firms and advertising and communications agencies.

If you keep business equipment at home or take it to client sites, that often needs to be stated in the policy. Check which addresses are listed in your policy document.

How much does it cost?

The premium mainly depends on how much property is insured, what the company does, where the premises are and how they are protected, with locks and alarms for example. The deductible matters too: a higher deductible may reduce the premium. For more on pricing, see how much business insurance costs.

Example: The burst pipe. A small design studio arrives at the office one Monday to find water on the floor. A pipe burst over the weekend, and two computers, a printer and the office furniture are ruined. If the loss is covered, property insurance can help pay for the damaged equipment and furniture, subject to the policy limits and deductible.

Frequently asked questions

Is machinery breakdown included in property insurance?

It varies. Some policies include machinery breakdown in the property part, others offer it as an add-on. If the company depends on machinery or technical equipment, check your policy document. There is more on what is usually included in the guide what does business insurance include.

Does property insurance apply when I work from home?

It depends on the policy terms. Many policies can cover property at several locations, but each location often has to be named. Your own home insurance usually does not cover the company's things.

What happens if the insured amount is too low?

Then the payout can be reduced. If your things are worth more than the insured amount, you will not get full compensation, and under some policy terms even smaller losses can be paid at a lower rate.