HURRICANE COVERAGE
Hurricane Coverage:
10 Important Issues That Can Impact Coverage
H
urricane season is rapidly
approaching. Anyone who has
followed the news over the last
few years likely remembers the
numerous storms which have
caused millions (or billions) of dollars in
damages and left wreckage in their wake.
Protecting property and business assets is
a priority for businesses at risk of suffering
damage in these storms, and understanding
what insurance to have and what issues
affect that insurance coverage is an
essential aspect of that protection.
Here are 10 things which can have an effect
on hurricane insurance coverage:
1) FLOOD DEDUCTIBLES – These need to
be reviewed in terms of their relationship to
the policy as a whole. That is the only way
to determine the out-of-pocket exposure a
business may face.
2) NAMED STORM DEDUCTIBLES – The
language in the policy needs to be fully
understood, especially when it comes to
named storms. The deductibles often carry
wording about percentage deductibles,
which can often be confusing and vary
wildly from insurer to insurer.
3) OFF-PREMISE POWER FAILURE – This
issue can lead to business interruption but
is not always covered in a typical policy.
Many policies have exclusionary wording
which leaves these types of expenses out of
coverage.
BY: GWENYTH P. LUU, CLCS
DIRECTOR - COMMERCIAL LINES
JGS INSURANCE
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4) MOLD, FUNGI, AND BACTERIA
EXCLUSIONS – Sometimes, simply having
moisture in the air is enough to promote
mold or bacteria growth. Unfortunately,
this type of damage may not be covered
if water from the storm did not physically
touch the things that were affected. So
while a painting may not have been
damaged by storm water, it may be
destroyed by mold caused by moisture from
it.
5) WIND-DRIVEN RAIN – Many policies
have exclusions for damage caused by
water or rain that is blown into an interior
without clear exterior damage from the
wind.
6) BUSINESS INTERRUPTION AND
PERIOD OF RESTORATION – The period
of restoration begins when the physical
loss or damage occurs; it ends when the
property, with reasonable speed, is repaired
or replaced. There are many challenges that
can play a role in the period of restoration,
such as delays in rebuilding or repairing,
contract or lease issues, change in designs
or upgrades and compliance with building
codes.
7) CIVIL AUTHORITY – Prior to potential
natural disasters, residents are often
asked to evacuate the area. This can lead
to business interruption both before and
after the event. It is essential to understand
exactly how this coverage is triggered and
any policy limitations.
8) DEPENDENT PROPERTY OR
INTERDEPENDENCY CLAIMS – These
two are often confused. Dependent
property is property owned by others
which is depended upon by the insured.
Interdependency is when an issue at one
insured property affects another insured
property.
9) REPAIR OR REPLACE – Determining
whether a piece of property should be
repaired or replaced is not always as easy as
it seems to be at first glance.
10) CONTINGENT BUSINESS
INTERRUPTION – This is meant to cover
business interruption when essential
suppliers or product chains are cut off to
the insured.
Knowing the limitations of your policy
and exactly what is covered is an essential
aspect of ensuring adequate protection.
The last thing any business wants is to have
storm damage occur only to find out that
it is not covered due to issues in the policy.
To further examine these key issues and
challenges, give us a call, we can address
them so you can achieve the best coverage
solution for your business. +
Gwenyth Luu helps organizations improve their bottom line and lower their total cost of risk by implementing
the JGS Proactive Service Platform. The JGS Proactive Service Platform is an inclusive strategy that focuses on
primary cost drivers of a risk management program. Gwenyth helps businesses understand all of their potential
and actual costs and liabilities, execute an actionable strategy, and deliver superior client service and support.
The JGS Proactive Service Platform is driven by continuous strategy and service delivered on a daily basis
throughout the year. The service platform includes risk control strategies, claims advocacy and management,
contract reviews and insurance program design reviews.