Thursday, June 6, 2024

Business Owners Purchase Insurance with The Expectation That Losses Will Be Covered

In business, sometimes you need to take big risks to achieve your goals and dreams. However, going without business interruption insurance should not be one of them. Business Interruption Insurance is insurance that should cover your lost business income if you have to close your doors for an extended amount of time.

However, this kind of insurance typically only covers income that is lost due to a direct physical event or a natural disaster, such as a hurricane, fire, or tropical storm. It typically excludes coverage for floods, bacteria, and things like power outages. 

Every day, business owners file claims for damages to their property in hopes that their carrier will cover their losses. Below are the most common claims business owners’ file: 

1. Theft & Burglary 

According to a study from The Hartford, theft and burglary make up roughly 20% of all claims filed by business owners each year. Furthermore, theft and burglary incidents result in claims averaging from $8,000 to $50,000. These figures are quite considerable, and they can hurt businesses that don’t have the proper coverage.

2. Wind and Storm

Florida is home to many hurricanes, thunderstorms, and hailstorms, which can knock down trees, remove siding from the exterior of your property, damage roofing, destroy windows, and cause severe harm to the structure of the business. In fact, the average wind-related insurance claim is valued around $11,000, which is a big expense that most business owners cannot afford out of pocket.

3. Fire 

Fire and lightning can cause both structural and cosmetic damages to a business, while burning the contents throughout, such as equipment, inventory, storage and more. In fact, fire damage accounts for the most expensive insurance claim, with the average claim roughly $80,000-$100,000. This leads to overwhelming expenses that most business owners can ill-afford to cover without the help of their insurance policy.

4. Water Damage

Water damage insurance claims are common because they can result from multiple origins, including hurricanes, storm surges, rain, busted pipes, leaking plumbing, and other piping failures. Insurance companies often cover water damage claims, depending on your coverage, but flood damage may be a different story and surprisingly may not be covered by your policy.

When a business owner purchases insurance, they don’t do so with the expectation of a loss. 

Most see insurance as a buffer that allows them to be safe, rather than sorry, after a catastrophic event. However, some might beg to differ.

Oftentimes insurance companies will delay, undervalue, or deny your business claim by simply using internal protocols that help them avoid payment. It’s unfair – and if they are operating in bad faith, illegal. When this occurs, it’s best to get an experienced attorney or public adjuster on your side that will fight for you.

This post is sponsored by Morgan Law Group

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