Preparation for a hurricane means more than preventative maintenance and stocking up on emergency supplies. Preparation also means mitigating your financial risk through the right kinds of insurance policies.
The cost of hurricane damage restoration could wreak financial havoc on your business without proper insurance coverage. Hurricanes are the most costly and destructive type of weather disaster. Since 1980, hurricanes in the United States have caused damage totaling “over $1.3 trillion total, with an average cost of $22.8 billion per event” according to the National Oceanic and Atmospheric Administration (NOAA). Insuring your buildings against a storm’s winds and floods can help mitigate your financial risk if your commercial property sustains hurricane damage. Equipped with the right insurance policies, you can lift your business to higher ground ahead of hurricane season.
BUILDING “HURRICANE INSURANCE” TO PROTECT YOUR COMMERCIAL PROPERTY
There is not an individual, cure-all “hurricane insurance” policy that covers all hurricane-related damages for your business. Instead, you may need to insure your commercial property first and then add additional policies to cover the breadth of hurricane damage.
If your business owns a physical facility, you likely already hold commercial property insurance. Commercial property insurance can cover your building and assets in the event of certain accidents and damage. However, depending on your location in the United States, property insurance may exclude some weather-related damages. The types of damage likely to occur during hurricanes, like damages from flooding, storm surge or wind, may be omitted. Adding additional insurance policies for these specific perils can help fortify your business.
FLOOD INSURANCE
Adding a flood insurance policy can help fill the gap left by your commercial property insurance. Hurricanes bring heavy rains and the possibility of a rising sea level (known as storm surge), both of which could lead to severe flooding. Commercial property owners can prepare for such events by purchasing public or private flood insurance. Backed by the federal government, the National Flood Insurance Program (NFIP) provides public flood insurance and is managed by the Federal Emergency Management Agency (FEMA). The NFIP offers building coverage and building contents coverage for items damaged by flooding. Alternatively, property owners can purchase coverage through private insurance companies. Private flood insurance may offer wider coverage options and more flexible premiums. You can evaluate the cost of public and private flood insurance options to help determine the best choice for your business.
WINDSTORM INSURANCE
Windstorm insurance can cover damage to commercial property from high winds and hail. Such coverage can offset wind-related damage from wind events like tornadoes and severe storms. This type of insurance is valuable going into hurricane season because the destructive winds from hurricanes can cause major structural damage. Some property owners’ commercial property insurance may already include windstorm coverage. However, those who live in high-risk areas, such as along the coast in states like Texas and Florida, may have to purchase windstorm insurance separately.
OTHER INSURANCE POLICIES TO CONSIDER
Insurance companies also provide additional policies that can give you further coverage heading into hurricane season. Business interruption insurance can help cover financial losses due to business closure after a hurricane. Lost income, employee wages and other expenses may be covered under such insurance, likely for a specified period following a covered disruptive event.
You may also consider obtaining sewer backup insurance. If a hurricane causes disruptions to your facility’s sewer system from severe flooding, sewer backup insurance can help cover the cost of repair and recovery.
Lastly, you should verify if your existing property insurance addresses debris removal and clean-up cost coverage. Some property insurance policies may limit or exclude debris removal costs. Even with an experienced and efficient hurricane cleanup company at work, you may want peace of mind knowing your insurance will handle such cleanup expenses.
TIPS FOR INSURING YOUR COMMERCIAL PROPERTY AGAINST A HURRICANE
No matter what types of insurance you elect for your business, bear in mind a few important tips ahead of the hurricane season:
Some vehicles and machinery may still lack complete insurance coverage for hurricane-related damages. You can review your insurance policies to check that these assets are covered.
The NFIP requires a 30-day waiting period before their flood insurance is effective in most cases. The Atlantic hurricane season begins June 1, so secure your insurance before the storms begin brewing.
Consult your policy to see the deductibles you will owe before your insurance pays. Insurance companies may require different deductibles depending on whether the hurricane becomes a named storm or if other thresholds are crossed.
You can take other steps to prepare your business for hurricanes and help mitigate damages by using Cotton Global Disaster Solutions’ (GDS) free Hurricane Preparedness Checklist.
HURRICANE DAMAGE RESTORATION AFTER THE STORM
If a hurricane devastates your commercial property, your insurance policies can help pay for the specific covered costs after you meet your deductibles. However, even with the best insurance coverage, you will still need a hurricane cleanup company that can manage the hurricane damage restoration. You should ensure the company is ready to work with your insurance agents and can quickly get you back to business.
To expedite your commercial property restoration, partner with Cotton Global Disaster Solutions (GDS) for turnkey hurricane restoration services. Cotton GDS works directly with your insurance agents, adjusters and risk managers to ensure alignment and efficiency during the recovery. With water damage mitigation services, disaster emergency response, construction services and commercial roofing, Cotton GDS has the resources and knowledge to provide your business with total recovery following a hurricane.
Contact a GDS representative to learn how Cotton can help your business develop a full hurricane preparedness plan. Fill out a contact form to begin working with a Cotton GDS representative today, or call us at (877) 511-2962.
With the proper insurance policies selected and a trusted hurricane restoration company in place following a hurricane, you can keep your business above water if nature’s costliest disaster hits.