Purwā Your standard business policies won’t fully protect your business

Key takeaways:

  • Hurricanes are becoming more intense, and three to five storms with winds over 111 mph are expected this season.
  • Sadly, 40 to 60% of small businesses don’t reopen after a disaster.
  • Today’s and tomorrow’s hurricanes are bringing more rainfall along with storm surges for increased flooding.
  • Your standard business policies don’t cover hurricane damage.

Fortunately, insurance is available to reduce your risks, and you shouldn’t be without it for true hurricane preparedness.

Hurricanes and Florida. It’s difficult to separate the two since all Floridians know that every June, hurricane season begins and it’s usually just a matter of time before the first storm makes landfall. You do what you can to prepare, but the latest news from a recent study says that hurricanes are becoming both more destructive and more frequent. Last year, there were 21 storms, the third-highest number ever recorded.

To some extent, we’re in uncharted territory. Just how strong will these storms get? The National Oceanic and Atmospheric Administration predicts there could be three to five major hurricanes with winds of 111 mph or higher in 2022. This might require some alterations in your hurricane preparedness plan. Businesses have special risks, and 40 to 60% of small businesses never reopen after a disaster.

So, what can you do to prepare? Boarding windows and trying to prevent water intrusion with sandbags can only do so much and won’t protect valuable business assets, not to mention your income. Fortunately, hurricane insurance is available. It’s not part of your usual business policies, so let’s take a look at what your current policies do cover and the extra protection you get from hurricane insurance.

What your current policies cover

Your business insurance can help pay for property damage, lawsuits, lost business income, and other covered losses from named perils. A business owner’s policy (BOP) combines property, general liability, and business income coverage into one policy. You can buy additional coverage for personal liability, commercial auto, data breaches, and other policies to enhance your insurance for comprehensive coverage.

While your current business insurance policies offer a lot of protection, they don’t protect you from the hazards presented by hurricanes. Keep in mind that even if your business is not damaged, your supply chain could be. That could impact your ability to operate your business. Many potential obstacles can hurt your business, so let’s talk about perhaps the most important part of hurricane preparedness: insurance.

Insuring against hurricanes

Before we get into the coverage you need and how these add-ons to your current business insurance policies can help you weather a hurricane, we need to talk timing. Once it is clear that a storm’s path will cause damage in your area, carriers issue a moratorium. This means you will not be able to purchase hurricane-related policies. So run, don’t walk, to your insurance agent, because you never know when the next storm will come to Florida.

Insuring your business against hurricanes doesn’t involve just one policy because these storms can cause damage in many different ways. Purchasing the right policies is the key to hurricane preparedness for businesses. The pandemic was probably tough enough on your business – it would be a shame if a hurricane took away what you fought so hard to preserve. 

Remember, your standard business insurance policies won’t cover you. You’ll need commercial hurricane insurance and flood insurance to cover the perils inherent with hurricanes. We’ll outline what each covers below. And when you talk to your insurance agent, double-check that you have enough property insurance to cover extensive debris removal. 

What hurricane insurance covers

Hurricane insurance covers wind damage. In states like Florida with a large amount of coastline, wind damage is often excluded in your standard business insurance. This is why, for complete peace of mind when it comes to hurricane preparedness, you need to purchase a separate policy. Here’s what your policy will probably cover when it comes to wind:

  • Damage to your building, including any outbuildings
  • Damage to your building contents, including furnishings and fixtures. Some types of equipment may not be covered, so be sure to discuss this with your agent
  • Computers and electronic equipment 
  • Inventory damage and damage to cargo in transit 
  • Machinery, vehicles, and tools. Be sure to check with your agent when it comes to vehicle coverage

Flood damage is not covered by hurricane insurance and requires a separate policy that’s vital to complete hurricane preparedness. You might think the wind causes the most damage, but it is the water that does the most damage – torrential rains and the storm surge can be devastating. Flooding has an average cost of $4.7 billion per event.

You’ll also need flood insurance

Neither your commercial property insurance nor your hurricane policy covers flooding. The National Flood Insurance Program offers coverage through your insurance agent. This is a good policy to add to your standard policy, regardless of hurricanes. Floods can happen at any time, not just during storms.

A single inch of floodwater can cause $27,000 worth of damage. New studies are finding that rainfall will play a bigger part in hurricane flood risk going forward, adding to damaging storm surges. While particularly a problem for the Northeast, it will affect all coastal areas, including those in Florida. 

You can never be over-prepared for a hurricane, and hurricane preparedness has to be approached from all angles. Plywood and sandbags aren’t enough. As storms get more intense, so do your risks. Sitting down with your agent to make sure you have the right insurance means peace of mind knowing that you’re ready for this and future Florida hurricane seasons.  

Hurricane preparedness starts with Avante

You can never be too prepared for hurricanes and the wind and water they bring. That’s why we offer the comprehensive coverage protection your business needs. Remember, once a hurricane is headed your way, it will be too late to get coverage, so act quickly.

At Avante, we’ll work with you to build the complete business coverage you need with a deductible that works for you. Reach out today, because you never know when the next storm will come. At Avante, we’re always standing by.

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.