Fixed Asset

What Does Fixed Asset Mean?

Fixed assets are items of property that a business owns and uses to generate profits, but that are not consumed in the process. Examples of fixed assets include land, machinery, and real estate. In the context of insurance, business owners often purchase fixed asset insurance, which provides coverage for these assets in case of damage, theft, or other risks. For machinery and equipment specifically, many businesses look into tools and equipment insurance, which covers physical damage and theft of the gear used to run daily operations.

Insuranceopedia Explains Fixed Asset

Fixed assets are often worth a significant amount of money and are crucial for the successful operation of a business. This is why business owners typically purchase insurance to protect these assets. Smaller companies often cover their fixed assets through a business owner’s policy, which combines property protection and general liability into a single plan. Fixed assets can also be sold to generate cash for the business, but in order to qualify as a fixed asset, the item must not be scheduled for sale within the next year. Fixed assets are tangible, in contrast to intangible assets like intellectual property.