Business Contents Insurance: What It Covers and How to Calculate the Right Sum Insured

Business contents insurance covers your commercial equipment, stock, fixtures, and fittings against loss or damage. Getting the sum insured right — and understanding what is and is not covered — prevents significant underinsurance at claim time.

What business contents insurance covers

Business contents insurance covers physical assets at your business premises against the main perils — fire, theft, flood, and accidental damage (if included). The main categories:

Office and IT equipment

Computers, printers, servers, phones, audiovisual equipment. Cover is typically for replacement at current market value, not original purchase price.

Fixtures and fittings

Fitted furniture, shelving, displays, shop fittings. These are often underinsured — account for the full replacement cost of all fitted items, not just loose furniture.

Stock

Raw materials, work in progress, finished goods. Insure at replacement cost. Consider seasonal fluctuations in stock value and ensure the policy allows for declared increases.

Trade equipment and tools

Equipment specific to your trade — machinery, specialist tools, instruments. High-value items should be specified individually to avoid sub-limit restrictions.

Calculating the right sum insured

Business contents under-insurance is extremely common — often because the sum insured was set at inception and never updated as the business grew. The sum insured should represent the full replacement cost of all insured items simultaneously — not a best guess or a figure based on what was paid originally.

A working approach:

Office/IT equipmentList and value every item at current replacement cost
Fixtures and fittingsGet a current replacement estimate; original cost often understates
Maximum stock valueUse peak value, not average; allow for seasonal highs
Total sum insuredSum of all above — review annually

For the consequences of under-insuring, see under-insurance and averaging. For the liability side of business insurance, see business liability explained. To understand the full picture of what business cover entails, including business interruption, see our business interruption guide.

Business contents FAQ

Frequently asked questions