Hurricane Michael was the third-most intense Atlantic hurricane to make landfall in the United States in terms of pressure, behind the 1935 Labor Day hurricane and Hurricane Camille of 1969. It was also the strongest in terms of maximum sustained wind speed to strike the contiguous United States since Andrew in 1992. In addition, it was the strongest on record in the Florida Panhandle, and was the fourth-strongest landfalling hurricane in the contiguous United States, in terms of wind speed.(Wikipedia Hurricane Michael)
Hurricane Claims can be very complex. Businesses affected by Hurricane Michael should immediately start the claim process for the loss. Commercial Property Insurance Claims require the need for a professional to protect the rights of the business and business owners.
When a catastrophic/hurricane loss occurs, a business owner’s first impulse is to do whatever is needed to mitigate the loss and restart operations as soon as possible. However, settling a commercial property insurance claim is a complex business transaction, and business owners should treat it with the same diligence and with professional assistance as when negotiating a critical business contract. Accepting the insurance company adjuster’s opinions or the insurance company’s offer of settlement without investigation or review of all policies for available coverages will likely result in a settlement which is far less than the business is owed.
A commercial property claim includes the cost of restoring the businesses’ property to pre-loss conditions within the limits of insurance purchased, while maintaining the business during the time needed to rebuild or repair damaged property. The business owner is faced with investigating and documenting losses, tangible and not, and becoming familiar with the insurance policies which include the coverages available, limitations on those coverages, deductibles, conditions precedent, as well as the specific requirements necessary to make a claim.
Commercial Insurance Policies Cover:
- “Property Damage,” including the buildings, fixtures, machines, furnishings, raw materials, and inventory.
- “Business Interruption,” which is intended to place an insured business in the position it would have attained, had the loss that caused the interruption not occurred. It should provide funds necessary to sustain the insured business while its operations are suspended as a result of damage caused by a covered peril. It typically pays a business’s profit and continuing operating expenses, including payroll, for a specific time period.
- “Extra Expense,” which covers expenses incurred in mitigating the business loss, or increased costs in continuing a business in the wake of a catastrophe. It can reimburse a policyholder for money spent moving a covered business to a different location while the covered property is restored. It is intended to offset expenses associated with returning to normal operations. Equipment breakdown coverage is often available with this coverage and should be purchased if a customer’s business is dependent upon certain equipment.
- “Contingent Business Interruption” is usually an extension of the business interruption coverage available in most commercial property policies. Contingent Business Interruption provides the insured with benefits to cover lost profits and extra expenses resulting from damage to a third party’s property, typically in four situations: (1) when the insured business relies on a third party to deliver materials or product; (2) when the insured business depends upon a third party to manufacture products; 3) when the insured business depends on a third party to purchase its products; and 4) when the insured business depends on a third party leader location to attract customers.
- “Ordinary Payroll Coverage” provides for salaries as a continued expense, and a policy may provide coverage for a business to pay hourly employees for a specified period of time while the business is closed.
- “Loss of Rents” pays for lost income when a covered rental property is made uninhabitable by a covered event and renters need not make rental payments. A lease or a rental agreement is helpful in estimating the amount of coverage needed.
- “Extended Period of Indemnity” provides business interruption and extra expense benefits beyond the period of restoration defined in the standard business interruption policy.
- “Civil Authority” coverage provides business income benefits when a civil authority prohibits access to the insured property due to direct physical loss or damage to other property. It is most commonly triggered during mandatory evacuations.
- “Utility Services – Time Element” extends business income and extra expense insurance to protect against losses caused by interruption of services from a specified utility that provides a business with water, power, or communications.
- “Loss of Ingress or Egress” provides benefits when, as a direct result of a covered peril, ingress to or egress from real and personal property is prevented.
The insurance policy benefits will sustain a business through the disaster and the following recovery. It is important to know which coverages the policy you purchased contains, and claim the benefits you are entitled.
When a business is damaged as the result of a hurricane, the business owner has current insurance, an experienced insurance lawyer can help. If you have been adversely affected by a hurricane and want to know your rights as a policyholder, call us to see how we can assist you in evaluating your case. By filing a hurricane damage claim, you can start recovering from this unexpected disaster.
Max Factor is an experienced insurance attorney who can assist you with this process. For more information contact Max Factor.