As business owners on the East Coast dig out from this past week's severe winter weather, the
Insurance Information Institute (I.I.I.). reminds them that standard business insurance policies provide coverage for a wide range of winter-related disasters such as losses incurred by burst pipes, ice dams and wind damage, as well as building collapse caused by the weight of ice or snow.
Business owners who are affected by power outages may also look to their property insurance or boiler and machinery insurance policies to recover losses. Coverage for the personal effects of officers, partners, employees and others will also be covered, up to the policy limit, which is usually about $2,500.
Business income (also known as business interruption) insurance will come into play if there is physical damage done to the structure.
"Hopefully business owners have sufficient policy limits to cover the company for more than a few days," said Loretta Worters, vice president with the I.I.I. "After a major disaster, it can take more time than many people anticipate to get a business back on track. There is generally a 48-hour waiting period before business interruption coverage kicks in," she added. "Too many business owners fail to think about how they would manage if a disaster damaged their business premises so that it was temporarily unusable."
If a business has extra income coverage, the policy will reimburse the sum of money the business spends, over and above normal operating expenses, in order to avoid having to shut down during the restoration period.
Worters noted that those businesses that were not physically affected by the winter storm, but whose suppliers or customers were affected, will be protected if they have contingent business interruption insurance. "Companies today are heavily dependent on raw materials from key suppliers to make the products they sell. If the supplier suffered a loss and could not deliver the product, their contingent business interruption insurance will help."
Automobile accidents resulting from slippery weather are covered under a commercial auto insurance policy. Damage to vehicles from falling branches or other debris is covered under the optional comprehensive portion of the policy.
Flooding is not covered under standard business owners policies. It is, however, available from the federal government's National Flood Insurance Program and a few private insurance companies.
"Business owners who have suffered losses need to contact their insurance company or agent as soon as possible to start the claims filing process," urged Worters.
-Insurance Information Institute
