Your Business Floor Plan Affects Your Insurance

In the world of business insurance, there are many factors that are taken into consideration when drafting a policy. Some of them are related to intangibles such as risk. Others apply to specific business assets. One of the physical assets of a business is its real estate -- the buildings that house business operations. Business insurance policies have to include accurate coverage for all of the physical locations that serve the business’ purposes.

With that in mind, one of the factors used to determine coverage under a business insurance policy will be the square footage or floor plan of business spaces. Whether they are rented or owned, larger business spaces will require more coverage. Business owners should think about this when they craft their policies in negotiations with business insurance companies, and think about whether their coverage is accurate, and how they could trim premiums by trimming their floor plan. It’s important to keep in mind that talking about the total square footage of a business, or its floor plan space, is different than discussing specific “floor plan insurance,” which is insurance industry jargon for a plan to cover spaces filled with high-end merchandise, such as a vehicle dealer’s showroom. In contrast, figuring floor plan square footage is a relatively simple calculation that adds or subtracts from the amount of asset coverage needed in a policy.

Lean Inventory Models

One way that businesses can cut down on their physical space requirements is to put together a better plan for sourcing materials and holding inventory. Any business that deals in physical products has to figure out how to keep those products on hand for delivery to customers. Inventory models based on specifically designed software and technology can help businesses to order only what they need at a particular time and to shrink warehouse facilities and other storage areas dramatically. This can have a big impact on business insurance policy premiums.

Outsourcing Technology

Many businesses in many different industries are also able to shrink their floor plans by utilizing new types of tech services such as cloud hosting, software as a service, and sophisticated web vendor systems that are sourced and supported off-site. By outsourcing technology in this way, businesses avoid the need to maintain separate rooms for servers or other hardware. By using digital archives, businesses can do away with the physical space previously used to store boxes of paper documents. These strategies can help lower the amount of square footage a business needs, and, therefore, the amount that the business must pay on insurance premiums.

For more information on Mississauga business insurance, give Excalibur Insurance Group a call at 519-348-9150. We can help figure out the best insurance coverage for any specific small business or company.