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Hurricane Insurance Coverage Considerations
Hurricanes are some of the costliest natural weather disasters, with some causing well over $30 billion in damage. For businesses in coastal regions, hurricanes are a potentially devastating risk. However, as hurricanes become frequent and severe, some private insurers may not provide coverage to companies located in high-risk areas.
Potential Losses
Commercial properties suffer significant losses as a result of hurricanes every year. According to government researchers at the Congressional Budget Office, annual commercial business losses caused by hurricane winds and storm-related flooding cost around $9 billion. In particular, hurricane-related property damage and loss can stem from:
- Wind damage—Hurricane winds can exceed 100 mph and result in extensive property damage.
- Water damage—Rain and storm surges—tidal waves that are pushed toward the shore during a storm—can cause damage to property and equipment and jeopardize the health and safety of occupants.
- Business disruptions—A hurricane’s short- and long-term physical and economic impacts can make it difficult for businesses to resume operations.
Hurricane Related Coverage
Hurricanes can cause devastating damage to commercial properties, and it’s essential to have adequate insurance coverage before a storm hits. Since hurricanes aren’t generally a named peril in standard commercial property insurance policies, commercial property owners will typically need to purchase supplemental insurance policies to cover hurricane damage, including:
- Flood insurance—Flood insurance covers losses directly caused by flooding and can include building and contents coverage.
- Windstorm insurance—Windstorm insurance protects policyholders from property damage caused by gales, winds and hail.
- Sewer backup insurance—Hurricanes can wreak havoc on sewer systems. Sewer backup coverage can protect properties from losses caused by a discharge of water or waterborne material from a sewer, drain or sump.
While most commercial property policies cover debris removal costs, there may be limitations. Commercial property owners should work with a qualified insurance professional to ensure they have coverage for debris removal and pollution cleanup.
More Information
Commercial property owners shouldn’t assume their policy includes hurricane coverage. Instead, they should work with their insurance partners to ensure that proper coverage is in place to protect their property in the event of a hurricane. For more information, contact us today.
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