Being a responsible business owner means protecting your business from unfortunate events. And for this reason, you need to acquire commercial property insurance, regardless if you lease, own, or use it from a private residence. This protection will cover the building and its belongings from theft, destruction, explosions, fires, and broken pipes.
While it can significantly take off the financial weight on your part, it’s also crucial to consider the exclusions.
This article will discuss what natural disasters your commercial property insurance won’t cover, the essential coverage, and how to protect your property. We’ll also tackle insurance for tenants and landlords.
Which Disasters Won’t Your Insurance Cover?
Businesses must purchase additional commercial property insurance coverage to supplement their current policies and cover all losses, especially in disaster-prone areas. This section will enumerate the three natural disasters your existing coverage may not cover.
1. Floods
While flood insurance is essential for businesses in flood zones, it can also benefit commercial properties outside those areas. It’s because they can still suffer from flood damage from heavy rainfall, broken dams, and new equipment that can alter the area’s normal water flow.
This commercial property insurance can protect buildings and other business properties inside them, such as furniture, fixtures, and equipment, from flood damage. Contents coverage includes personal property like clothes, carpets, currency, precious metals, and air conditioners.
Tips on mitigating the damage: Businesses can reduce flood damage by creating an evacuation plan. They should also have a survival kit with necessary supplies like medication, water, batteries, flashlights, radios, and nonperishable food. Moreover, commercial property owners must acquire the required insurance and securely store or back up all essential documents in the cloud.
2. Hurricanes
Hurricanes can bring extreme property damage and can affect your regular business operations. For this reason, purchasing the right commercial property insurance coverage is always wise to ensure your business can remain open.
Businesses must also know commercial property insurance’s limitations and secure business interruption insurance, especially if they have establishments in hurricane zones.
3. Earthquakes
Regardless of your business’s location in the United States, there will always be a risk of earthquake damage. For this reason, it’s always a wise choice to secure a commercial property insurance policy covering earthquake damage to your business’s building and inventory. These policies usually use a percentage of coverage as a deductible instead of a straight dollar amount.
What Should My Insurance Policy Cover?
Commercial property owners must never neglect fire risks in any insurance policy. Many small business owners have recently suffered a fire’s costly consequences. On average, the claim for damages was close to $35,000, which could spell the difference between a business staying open or closing its doors.
As devastating wildfires ravaged the country, the importance of having fire coverage in a commercial property insurance policy is more evident than ever.
What Else Can I Do?
If a catastrophic event strikes, a force majeure clause in a commercial real estate lease can buffer the disaster’s events. It can temporarily suspend a landlord’s responsibility to fulfill its obligations until it’s safe and feasible.
Insurance for Tenants and Land Owners
Landlords must require tenants to acquire adequate insurance policies to protect the establishment against property damage during natural disasters. It can save both parties from costly losses and ensure rental income stability.
Ensuring a Safer Property
As our world faces more devastating natural disasters, we must always prepare ourselves for the worst-case scenarios. Acquiring the right commercial property insurance policies and becoming disaster-ready is crucial for a business’s successful risk management plan.
Pascal Burke Insurance Brokerage Inc. offers commercial property insurance in Philadelphia to protect businesses from damage. We have a team of professional brokers who can help you find the right coverage for your needs. Call us at 877-893-7629, or visit our website to get a quote!