Comstock's magazine 0118 - January 2018 | Seite 71

SPECIAL PROMOTIONAL SECTION
“moderate magnitude earthquakes have
occurred in the high Sierra, the foot-
hills and in the Central Valley” on active
faults found in wide zones. And distant
but large quakes could cause significant
damage here, the authority says.
Natural catastrophes are the night-
mare insurance scenario for a reason
— they put pressure on the availability
of materials and labor across a region.
That’s why they’re harder to financial-
ly plan for than an accident involving
an individual business. So companies
that want to insure their well-being in
the worst of all cases need an insur-
ance portfolio tailored to their situation,
and should revisit the plan annually in a
meeting with their broker.
The aftermath of the northern Cal-
ifornia wildfires illustrates systemic
price pressure. Stuart Nelson, presi-
dent of Point West Insurance in Sacra-
mento, has talked to insurance-claims
adjusters in Santa Rosa. On a structure
for which rebuilding might have run
$200 a square foot in normal times,
it’s now 2.5 times that, he says. “Right
now, the price of building materials is
going through the roof because we’ve
had such cataclysms,” says Leo Grover,
president of Pinnacle Emergency Man-
agement, regarding the considerations
a business should take into account
when approaching these annual insur-
ance plan evaluations.
That means to plan for disaster, you
may need to increase your property cov-
erage. Both commercial property and
homeowners insurance typically say they
cover the cost of rebuilding the insured
structure, says Nelson. Homeowners’ pol-
icies often cover up to 150 percent of the
estimated replacement cost to account for
unusual price spikes. Not so for commer-
cial property insurance, which covers only
100 percent of cost, he says. That means
you should consider paying more: if you
want to double your property plan from
$100,000 to $200,000, your premium
might go from $2,000 to $4,000, he says.
“So many people look for insurance
to find the least expensive policy, but the
purpose of insurance is so that, when
you have a disaster, you have enough
coverage to be out of business and
sustain a loss,” says Grover. “Are you
covered to keep your key employees?
Otherwise your employees could find
employment elsewhere, which is a cat-
aclysm unto itself. Do you have enough
insurance to rebuild your building to the
state it was prior to the disaster?”
Business interruption insurance pro-
vides another example of why business
plans need to be individually tailored.
It pays you during the months or years
“So many people look for insurance to find
the least expensive policy, but the purpose of
insurance is so that, when you have a disaster, you
have enough coverage to be out of business and
sustain a loss.”
-Leo Grover, president, Pinnacle Emergency Management
you’re closed. But the amount you’ll
need is highly specific, says Donna Ab-
bott, director of marketing at Warren G.
Bender Co. in Sacramento. Businesses
that have many locations may decide
that they’re spread out enough that
they’ll be fine if one goes down — such
companies may not need much inter-
ruption insurance, she says. It comes
down to your situation: “What will you
need to fund a recovery?” she asks.
Happily, interruption coverage is
built into regular commercial property
insurance policies against normal per-
January 2018 | comstocksmag.com
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