Commercial Property Insurance for Intangible Assets
This type of commercial property for intangible assets while very valuable can sometimes be thought of as out of sight and out of mine as far as insurance purposes. It is rarely considered in the risk management process but is common to all businesses no matter how large or small is that of “Goodwill”. It is an intangible asset that can be damaged by a bad reputation within the community and marketplace. Your bottom-line and long term viability can ultimately depend upon this Goodwill.
Sometimes this Goodwill can be of very real value and sometimes it can just be another ploy for income tax purposes. Regardless of your specific use of this intangible asset it would be prudent to ascertain whether a loss or damage to your reputation or goodwill is worth insuring.
Nowadays it doesn’t take but one Twitter text message to go viral and the company’s reputation can go in the garbage heap within a 24 hour period. Your general liability policy usually provides coverage for personal injury to third parties for damage to their goodwill and reputation but normally that type of protection for your business needs to be specifically purchased or enhanced in your insurance portfolio.
Trademarks, slogans, and symbols can also be a valuable intangible asset that if stolen or defaced can cause damage and loss of income to your organization. Protecting your trademarks, slogans, and symbolism can be a daunting task in this global economy. Foreign entities and competition from abroad can make it difficult to ascertain who or what is attacking your “brand”. Since these coverages are typically excluded under the commercial property section you need to specify a dollar amount and pay the appropriate premium based upon the limits that you choose. Another intangible item that might be considered for insuring would be patents and copy writes. If you have a unique process or manufactured product, patents protect your invention or unique process that you have. This is a specialized coverage and a specific coverage limit amount needs to be ascertained with regards to your patent infringement from other parties. Contracts can also be a valuable intangible asset that can represent hidden value within the provisions of the agreement. Just having favorable long term lease provisions in your renting of space, equipment, etc. can be of great value of market conditions change. If rents go up substantially in nearby properties the value of your contract will increase. If your building that you are renting suffers a total loss and you have to go rent somewhere else at the much more higher prevailing rents is when you will come to realize the value of you intangible lease contract.
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