Property Insurance and Natural Disasters

My small business property insurance covers a natural disaster, right?

In today’s small business insurance market, it is possible to get some disaster coverage in your small business property insurance coverage.  However, as a business owner, it is up to you to understand what is covered and what’s not.  In many cases, certain disasters and types of storm damage are not covered.

Your property insurance covers property from the every day risks for things like theft or damage from an accident.  Disaster insurance will cover the immediate loss and impact to your business and property from a specific occurrence like a flood.

As noted above, it is now possible to add coverage to your existing policy for specific disasters like flood, earthquakes, and acts of terrorism.  It is important to review your present coverage and look for any specific exclusion written into your existing business property policy.

Depending on where your business is located and what types of natural disasters may occur will generally help you understand any exclusion in your property coverage and gaps you may need to fill with a separate policy.

Typically, disaster coverage deductibles are a percentage of the loss unlike your business property coverage which will have a set deductible.  Depending on the amount of the loss, that can be a significant number.  Work with your licensed insurance professional to determine what risk exposure your business has, and how to best manage the risk with a combination of business insurance and separate disaster coverage.

Don’t be afraid to ask questions and get a clear understanding of how your coverage will work in the event it is needed.  If you have business interruption insurance or mechanical breakdown, review that coverage and any exclusion as well.

Talking with your licensed insurance professional is important before determining what coverage is necessary and how it works in conjunction with your existing property insurance.  What you are trying to accomplish is a combination of coverage and policies which reduces your risk and doesn’t duplicate coverage.  You want your premium dollars working for you for the maximum coverage.

Leave a Reply