Many business owners think they have a solid grasp on their insurance policy. However, just when business owners get comfortable and feel that everything is running smoothly, the unthinkable can happen.
With rising ocean temperatures, hurricanes pose a serious threat to business owners on all coastlines. Remaining educated on these five additional ways to insure your business in the event of a hurricane will help you be better prepared to protect your livelihood, assets, and property.
Business Interruption Coverage
The first thought after any natural disaster for a business owner is, “When can I reopen?” Unfortunately, many factors come into play including safety and accessibility. Depending on how severely damaged your business is, it could take months to rebuild and reopen.
With business interruption coverage, you will be covered for profits you would have earned had the natural disaster not occurred. This provides you with coverage to assist you with the rebuilding process. Business interruption coverage also helps with expenses that don’t come to a halt, such as payroll, therefore protecting your employees that are also affected by stoppage of business.
Extra Expense Insurance
After a hurricane, there are many expenses that business owners accrue that wouldn’t be factored in if operations were normal. Rental equipment, relocating assets, and finding a new operable location in the interim, are all unexpected challenges that a business owner may have to overcome.
Extra Expense Insurance is a commercial insurance that helps business owners cover unexpected costs when recovering from a hurricane or any other major disturbance. This coverage takes effect immediately when the disaster strikes until your business is back to functioning normally. This coverage has helped many business owners avoid closing down permanently.
Civil Authority Coverage
This is an area that can actually benefit a business owner. Depending on the severity of the hurricane, it can sometimes be weeks before a business owner can return to their property due to safety concerns. All policies have language that discusses Civil Authority, but what policyholders don’t often realize is that there are ways that business owners can be covered in this event.
Civil Authority Coverage covers a business for a specified period of time in the event of this form of shut down. Most policy language specifies that this situation must be active for more than 72 hours before coverage can begin to take place.
Utility Service Interruptions
Often times during and after a hurricane, one of more forms of utility loss occurs. The loss of gas, electricity, telecommunications, water, or any combination of thereof can halt a business’s operations.
Businesses that may be susceptible to these inconveniences can buy insurance that protects them from these forms of service interruptions. In the event of a power outage, deductibles can vary from four hours to up to 72 hours after service is interrupted before coverage kicks in. It is best to take a look at your current coverage to see if you are covered during one of these instances.
Contingent Business Interruptions
As a business owner, you sometimes depend on other businesses to keep the flow of your operation in tact. In the event that your business in affected by a shut down of a major component that contributes to your success, contingent business interruption insurance reimburses you for extra expenses or lost profits directly related to that lapse in business.
Common instances when this coverage is used includes:
- When a business depends on a supplier for products or supplies
- When a supplier depends on few key businesses to move a large portion respected inventories
- When a business relies heavily on another business to draw a crowd to an area (Example: A restaurant or gift shop located near a ferry terminal)
As climate change continues to increase ocean temperatures, hurricanes have a larger radius of places they can impact. Storms are becoming stronger and more frequent. All too often, many business owners have not been prepared to the extent they should have to ensure their business’ survival. Put your business in a position to survive the next major hurricane.
Have questions about your hurricane damage claim? Feel free to contact Stark Loss Consultants for more information about how a Public Adjuster can help.