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Does My Commercial Property Insurance Cover Natural Disasters?

    3 minute read

    Business owners may not have control over when a natural disaster strikes, but they can take proactive steps to protect their company from the devastating aftermath. One crucial action is obtaining insurance, which can act as a financial shield against unpredictable forces of nature. Among the various insurance coverage options, commercial property insurance stands out as the most essential policy for business owners to consider. Let’s explore how commercial property insurance protects your business from the different natural disasters your company may face.

    Importance of Commercial Property Insurance in the Face of Natural Disasters

    Every year, catastrophic events cause significant damage resulting in millions of dollars in repair and rebuilding expenses. The Federal Emergency Management Agency (FEMA) reveals that  25% of companies fail to reopen after a natural disaster strikes. Without adequate insurance coverage, businesses may face challenges in recovery, risking closures and financial strain. That is why commercial property insurance serves as a safety net, allowing businesses to rebuild and resume operations swiftly after a natural disaster.

    How Commercial Property Insurance Works Amongst Different Types of Natural Disasters

    Whether it’s hurricanes, earthquakes, or wildfires, commercial property insurance can help protect your businesses’ physical assets and aid in recovery efforts. Let’s explore how this coverage operates for each specific event.

    1. Hurricanes

    businesses boarding window from hurricane - commercial property insurance

    Commercial property insurance offers comprehensive coverage for, many losses, such as damage from high winds and heavy rainfall. This coverage extends to roof damage, broken windows, and exterior destruction. However, it’s essential to note that commercial property insurance does not cover losses caused by rising water or floods.  Your standard commercial property insurance won’t provide coverage even if a hurricane leads to flooding. Therefore,  owners must consider obtaining separate flood insurance to safeguard their business if the business is located in a flood-prone area.

    2. Flood

    Floods are one of the most common natural disasters that can cause extensive damage and business owners frequently underestimate the risk of floods. As emphasized earlier, obtaining flood coverage requires a separate policy. This specialized insurance policy helps covers damage to your building’s structure, contents, and equipment caused by rising water. If you have difficulty finding flood insurance from a private insurer, you can obtain a quote from the National Flood Insurance Program (NFIP).

    3. Tornadoes

    tornado aftermath

    More than one thousand tornadoes hit the United States every year. Similar to a hurricane event, commercial property insurance covers wind and storm damage. Be sure to review your policy’s specific terms and coverage limits to ensure adequate protection against tornado risks. It’s also important to note that commercial property insurance does not extend coverage to your business’s vehicles.  A separate commercial auto insurance policy must be purchased to protect cars and other vehicles.

    4. Volcanoes

    While volcano eruptions are rare, commercial property insurance generally covers damages from volcanic explosions, ash, dust, or lava. However, similar to flood zones, insurers typically do not offer coverage for lava flow. If an eruption triggers earthquakes or mudslides, those damages won’t be covered, but owners can obtain separate earthquake insurance.

    5. Earthquakes

    building's window shattered - commercial property insurance

    Many commercial property insurance policies exclude coverage for earthquake damage unless an endorsement or rider is added. Nonetheless, even when included, the coverage tends to be limited and restrictive. Therefore, it is highly recommended for businesses that operate in earthquake-prone areas obtain a separate and dedicated earthquake insurance policy. Such a policy can provide comprehensive protection against various earth movement damages such as collapsed gas lines, crumbling or cracking walls, and damage to the interior and exterior of buildings.

    6. Wildfires

    Damages caused by wildfire or lightning are covered under commercial property insurance. It covers physical structures, such as buildings, equipment, and inventory, that may be damaged or destroyed during a wildfire. Additionally, it often includes coverage for business interruption, compensation for lost income, and ongoing expenses if your business is forced to close or relocate due to the wildfire.  With this insurance in place, you can reduce the financial impact of wildfire-related losses and focus on swiftly rebuilding and continuing operations.

    Ensure Your Business By Insuring It

    Having the right commercial insurance coverage can make the difference between getting back in business in a few days versus months or possibly never. Unfortunately, many small businesses only discover they aren’t adequately insured after experiencing a loss. Don’t let that happen to you. Take action now to protect your business by speaking with one of our Commercial Insurance Specialists today at (855) 919-4247. Our specialists can provide you with a quick commercial property insurance quote and ensure you have the necessary coverage to safeguard your business.

    The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may differ from those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.