With goods insurance you are insured against damage to your goods. Inventory insurance covers you against damage to your inventory, usually including electronics and computers. These insurances cover you, for example, in the event of fire, water damage, vandalism, or theft.
What are goods?
Goods means your trading stock. Including the raw and auxiliary materials you use to make your products. For example, semi-finished products, end products, cleaning agents, fuels, and packaging.
When is goods insurance useful?
Not every company runs the same risks. For example, if you have a factory with a lot of trading stock and raw materials to make your products, goods insurance could be a good choice. Keep in mind that an insurer usually does not pay your sales price. Your purchase price will be reimbursed. This is also known as the replacement value, which is the amount you need to replace your stock.
What is an inventory?
An inventory is everything your business uses to get the job done. For example, computers, desks, chairs, or tools. So these assets are not intended for sale. Checks and other security papers (such as postage stamps), motor vehicles, trailers, caravans, ships, and aircrafts are not included in an inventory.
For whom is inventory insurance useful?
Inventory insurance is particularly interesting when your business assets are valuable. Or if you cannot do your job without those company resources.
Is goods insurance or inventory insurance mandatory?
Both goods insurance and inventory insurance are not mandatory.
What is usually covered by goods insurance?
- Damage to your trading stock
- Damage to raw and auxiliary materials
What is usually covered by inventory Insurance?
- Damage to your entire inventory
When do the goods insurance and inventory insurance pay out?
If your policy states that you are covered for what happened to you. Common causes are: fire, water damage, vandalism, or theft
What is usually not insured?
- the damage to your property. You need a buildings insurance for this, or home insurance if you work from a home office
- damage while transporting your goods. For this, you need cargo insurance
- damage due to the temporary interruption of your company’s activities. You need consequential loss insurance for this
- damage caused by intent
- damage caused by poor maintenance
- damage caused by illegal activities
- damage caused by natural disasters, such as earthquakes and floods
Goods and inventory both insured
Some insurance companies combine goods insurance with inventory insurance. Then both the goods in your inventory and your assets are insured. However, you often have to take out separate insurance for certain inventory assets. For example, for equipment and electronics. Always ask your insurance company which assets are insured with inventory insurance and which are not.
How do you insure a home office?
If you have an office or other workspace at home, you should separate private and business use of inventory as much as possible. If you have equipment in your home that you use for business, such as a laptop, printer, or photo camera, check with your insurer. They can tell you what the consequences are for your private insurance and whether you need additional business insurance. In general, your household insurance covers your private belongings. Your home insurance covers the building itself. Those insurances do not cover any damage to business assets or workspaces.