Randy owns a hardware store in Waco. Every spring, the front of his store starts to look like a project list for every homeowner in McLennan County. There are grills near the entrance, pallets of mulch along the sidewalk, bags of soil stacked under the awning, patio furniture on display, and a row of wheelbarrows lined up like they are waiting for a parade.
It looks great, and it sells. Customers like seeing what they need before they ever walk through the front door. A good outdoor display can turn a quick trip for screws into a cart full of weekend projects.
But one afternoon, Randy watched dark clouds build west of town. The weather alert said hail was possible. That is not exactly breaking news in Texas, but it got Randy thinking. He had thousands of dollars of inventory sitting outside. He knew he had commercial property insurance and that it included business personal property coverage. But he did not know whether that coverage applied to inventory outside the building.
This is a problem that we see all too often. Too many business owners start asking policy questions when the weather sirens start going off. Reviewing your property policy needs to happen when you are discussing your coverage with your insurance agent long before any bad weather rolls through town. You shouldn’t wait to look at it while your outdoor inventory is sitting in the path of destruction.
Outdoor Inventory Is Part of the Hardware Store Business
Hardware stores use outdoor space differently than most retail businesses. Outdoor displays can help customers see what you sell, move seasonal inventory, and make better use of the property around your building. Keeping some inventory outside is not necessarily a problem, but you need to know how your commercial insurance covers this type of property.
The insurance question is whether your property insurance treats that outdoor inventory the same way it treats inventory inside the store.
Some commercial property policies provide coverage for business personal property only when it is inside the building. Others may cover property outside, but only up to a smaller limit or only within a certain distance from the building. This is where you need to slow down and read the policy.
If your store keeps inventory under an awning, along the sidewalk, in a fenced yard, or near the loading area, you need to know how the policy defines that property and what limits apply. The mistake is assuming business personal property means everything your business owns, no matter where it is located.
That assumption can get expensive after a storm, theft, or other loss.
What Is Business Personal Property Coverage?
Business Personal Property coverage, often called BPP, is the part of a commercial property policy that helps cover property your business owns that is not part of the building itself. For a hardware store, this can include inventory, shelving, office equipment, computers, displays, tools, and other business property. That sounds simple enough.
But BPP is usually built around a location, a coverage limit, and specific policy language. The policy may cover property inside the building differently than property outside the building. This is why Randy cannot stop at seeing his business personal property limit on the declarations page. He has to know what the policy says about property in the open.
What Is Property in the Open?
Property in the open generally refers to business property located outside a building. That may include inventory on a sidewalk, items in a yard, materials under an awning, or equipment stored behind the building.
Some policies include limited coverage for property in the open. Some restrict it. Some exclude certain causes of loss. Some require the property to be within a certain distance of the building. Some may treat outdoor property differently when wind, hail, theft, or water damage is involved.
You need to understand your specific commercial property policy and how it handles property in the open.
If Randy has $40,000 of grills, mulch, and patio furniture outside during a spring storm, he needs to know how those things are covered before hail starts bouncing across the parking lot.
Why Wind and Hail Make This Even More Important
Texas weather is not gentle with outdoor inventory.
Hail can dent grills and smokers. Wind can throw patio furniture across the lot. Rain can ruin bags of soil, fertilizer, mulch, and other products. A strong storm can turn a clean seasonal display into a pile of damaged goods in a few minutes. The damage may not stop there.
If outdoor materials become debris, they can damage customer vehicles, break windows, or create safety issues after the storm. That is why outdoor inventory is not just a property question.
It can become a liability question too.
Does Theft Coverage Apply Outside?
Theft is another place where outdoor inventory can get tricky. Hardware stores often sell items that are easy to carry off and easy to resell. If those items are stolen from inside the building after a break-in, the policy may treat the claim one way. If they disappear from an outdoor display, fenced yard, or loading area, the policy may treat them differently
This is where you want to look for policy language about property in the open, theft from outdoor areas, and any special limits or exclusions for property kept outside the building.
You also need to know whether certain items must be locked, fenced, scheduled separately, or stored in a specific way for theft coverage to apply.
That is not something you want to figure out after the police report is filed.
What Should Hardware Store Owners Review?
If your hardware store keeps inventory outside, you should review the policy with a few direct questions.
- How much Business Personal Property coverage do I have?
- Does that limit include outdoor inventory?
- Does the policy cover property in the open?
- Is there a distance limitation from the building?
- Are wind and hail losses covered for outdoor property?
- Are theft claims covered for outdoor inventory?
- Are certain types of stock excluded?
- Does the policy treat rental equipment differently?
- Do I need to schedule any high-value items separately?
These questions are not complicated, but they are important.
You are a hardware store owner, not an insurance expert. Don’t try to figure these things out on your own. Consult with an agent who specializes in helping Texas hardware store owners cover their store for the way that it actually operates.
True Texas Hardware Insurance
Outdoor inventory can help your hardware store sell more.
It can also create a coverage gap if your policy is not built for it.
At Insurance For Texans, we help Texas hardware store owners look past the premium and understand the actual risk. Through our True Texas Hardware Store Insurance program, we review your building, inventory, outdoor storage, seasonal displays, rental equipment, theft exposure, wind and hail concerns, and the policy language that determines how a claim gets paid.
That is the point of the Built Right Protection Plan.
Your store does not operate only inside four walls. Your insurance should be built for that.
Click the button below to schedule a review of your current policy.