Hurricanes and Business Insurance

June kicks off hurricane season and that means intense flooding and wind damage to your home. But, businesses suffer, too. A case that represented this was the devastation of Hurricane Harvey.

 

People were shocked by the extensive damage and the relation to insurance. There was an estimated $125 billion in damage, only $19.4 billion of which was insured. Advocates would like to use this opportunity to spread awareness about how important business insurance is. Additionally, how it is necessary to minimize or prevent the need for Federal Insurance coverage.

 

There are also some other preventative steps that businesses can take this hurricane season. Experts recommend companies should try to store key parts for operation above ground level when possible to reduce losses. Also, once a structure is destroyed, rebuild, but in a new area away from the flooding zones. One of the major problems is that property is being rebuilt the same way which only sees repetitive damage from the storms. Another issue with the rebuilding of these structures is that they are only being patched up, a temporary fix which also leads to repetitive damage. This means that there is constantly money being poured into a piece of property that is not really worth it anymore. Critics say that at that point the commercial property should just be retired.

 

Power loss is another major issue seen with these tropical storms. Even if the property is not really damaged, power loss or other obstacles may limit how the business runs resulting in significant losses. Business interruption costs often tops losses, especially seen with Harvey and they are often later to be realized.

 

Here are a few other important things for business owners to know about business insurance, especially during the months of hurricane season.

 

Know What You Are Covered For

Standard commercial building insurance is essential, but it typically covers fires, theft, vandalism, and windstorms. However, standard building insurance typically does not cover hurricanes, earthquakes, or flood damage, so be sure to speak with you insurance agent to see what your policy limitations actually are and then go from there.

 

Renting vs Owning

You must get property insurance no matter if you rent or own. It protects an office you own and all of your belongings, equipment, etc. But again, there are limitations to the cause of damage and there may be highly specialized equipment or something more valuable that you may need more extensive insurance for.

 

Replacement vs Cash Value

Replacement-value covers the current cost of your property in contrast to cash-value that considers depreciation. Replacement is more expensive than cash-value, but deciding which to get really depends on your needs.

 

Insurance Rider

There are many rider options that can be confusing, but this is how you can add hurricane and flood damage coverage. This is also, where you can add Business Interruption Insurance, so be sure to talk to your insurance agent about this if your area is prone to hurricanes and flooding.

 

So, be sure to carefully assess your business and take additional preventative steps, if you are not already to minimize your losses and maximize your coverage.

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