Commercial Buildings

Hurricane Insurance Claims For Commercial Buildings

Louisianians have already faced catastrophic destruction this fall from Hurricane Ida. The news coverage showed the severe effects of the wind, which tore off many roofs off of homes and businesses, exposing them to nature’s elements. In the coastal parishes of Louisiana, some businesses are still inhabitable and may be for some time. Disaster relief and restoration efforts have begun and many businesses and other commercial property owners are beginning the process of filing their claims.

Commercial properties include offices, hospitals, apartments, condominiums, restaurants, banks, gas stations, hotels, and other retail properties. Unfortunately, many insurance companies will not issue a policy in the wake of hurricane season, so you will want to take the time to evaluate your insurance coverage for your business or commercial building. There is a variety of different coverages for businesses, some which are tailored to damages you may encounter in your area. 

Types of Hurricane Insurance Coverage 

Before the approach of hurricane season, you should always assess your coverage to assure your commercial property is properly covered. Having a good understanding of your insurance coverage will provide some peace of mind if losses result to your covered properties. Important to keep in mind is that most businesses in the South, and especially within the coastal areas which are subject to a high risk of flooding, will be required to purchase additional flood or wind insurance. 

Additionally, damages brought on by severe storms are not limited to property damages and can even be catastrophic to a business’s financial interests outside of their physical properties. For instance, evacuation orders and curfews may limit the hours of operation for your business, if your city itself is even fully operational following a storm. Additionally, the  delivery of necessary products to run your business may be halted or delayed. This is why it is important to take the time to evaluate your property and its coverage. 

Generally, commercial insurance will provide a range of coverage for a business’s building and inventories. However, to be fully covered, purchasing additional coverage may be necessary. 

The following are the different types of insurance coverage which Louisiana business owners should consider:

• Flood and Windstorm: Some commercial property policies include flood and wind insurance, but a majority of commercial property insurance policies will exclude excessive damages for flood and wind. Thus, you should always consider purchasing an additional policy for damages like these, especially if your business is located in a lower-lying area. 
• Physical Loss or Property Damage: Most commercial property policies provide coverage for repair and rebuilding efforts. Typically, the premises which are covered under the policy are listed, as well as, any equipment, machinery, furniture, or any other business personal property. 
• Debris Removal Expense: Debris removal is often underestimated as an expense following a severe storm. However, the costs which can be incurred from debris removal are great. Having coverage for debris removal might be something a business owner would want to consider if there are a number of trees or poles on or surrounding their business property. 
• Business Income (including business interruption): Business interruption coverage covers any lost income which resulted from a suspension of operations, either entirely or partially, because of damages to your business’s property.
• Contingent Business Interruption Coverage (CBI): Different from business income coverage, contingent business interruption coverage provides reimbursement for lost income and any extra expense coverage when a separate, non-insured property is damaged but is a part of the insured’s supply chain (i.e. in the hands of a distributor, transporter, wholesaler, or retailer).
• Extra Expense: Extra expense coverage is usually found in a business-interruption form, but such coverage will indemnify a business for “actual and necessary ‘extra expense’” which are incurred from the business’s direct physical loss or damage. The extra expenses are expenses that were sustained in order to minimize the suspension of the business and permit the continuance of its operations. This would include items like a generator to provide electricity to a business establishment. 
• Service and Utility Interruptions: There are some insurance policies that will provide businesses with coverage for interruption and extra expenses due to the loss of electricity, water, or electronic communication services which resulted from a covered event. 
• Electronic Data Processing (EDP): Policies which cover EDP provide separate property coverage to computer and technology equipment. There are some commercial property policies which provide this coverage, but it is usually limited. Therefore, EDP coverage can be used to supplement and expand the coverage to events like power surges. 
• Spoilage: Spoilage coverage is usually afforded to food and hospitality businesses who, due to a covered event, lose their products and stock. 
• Civil Authority: When a business is prevented access to their establishment because of a government directive (such as an evacuation order or city curfew), their losses may be recoverable due to their loss of access and operation of their business.
• Ingress/ Egress: Ingress and egress coverage relates to civil authority covered in that it will cover losses that result from property damage which has precluded the entry or exit to your business. 

Evaluating Your Coverage 

As a Louisiana business owner, you do not want to be scrambling before a hurricane or severe named-storm to be sure that your property is adequately protected. You may be preparing to evacuate with your family or need to prepare your home for impact. This is why many attorneys stress the importance of verifying your coverage ahead of time, well before hurricane season. If you are unsure of your coverage under your policies or would like assistance in assessing the adequacy of your coverage, call our office today. Our experienced attorneys have experience in filing claims following a hurricane and can provide insight regarding your business’s insurance coverage.