Owners: Consult policies following natural disasters
NEW YORK — With earthquakes in California and Hurricane Barry striking states along the Gulf of Mexico and in the Midwest, small business owners should look at their insurance policies and determine how well covered they’d be in the event of a natural disaster.
A standard business policy will cover losses from wind damage like broken windows and roofs that are torn away. And if rain gets inside the building, the damage from the water is also covered. But if the water is due to a flood, entering a building from ground level, that damage isn’t covered. A company will need separate flood insurance, which is regulated by the federal government. It can be expensive for companies that are located in or near flood zones, but businesses can lower their premium costs if they take steps to make their property less vulnerable to flood water.
Standard business insurance policies cover wind damage and therefore will reimburse for losses from tornadoes. These policies also cover rain and hail, and damage from both.
Earthquake policies cover a variety of damage from tremors, and each insurer decides what kind of damage they’re willing to cover. Some charge high deductibles, as much as 20%. Earthquake coverage is sold separately from a standard business policy.
There are 169 volcanoes in the U.S., although major eruptions like last year’s Mount Kilauea lava flow are rare. Most business insurance policies provide coverage for damage caused by a volcanic explosion, shockwaves, ash, dust or lava, according to the Insurance Information Institute. But like flood zones, most insurers won’t sell volcano coverage inside what are known as lava flow hazard zones.