Every few years, hurricanes blow through Texas and leave devastation in their wake. While business owners may have purchased storm and flood coverage to minimize their losses, many will never be able to reopen their doors after a hurricane—and some will be paid far less than expected for their property damage claims. Attorney Bill Voss explores commercial costs after a tropical storm and the most common reasons damage is not covered under a policy.
Estimating the Value of Your Business Losses After a Hurricane
Most commercial property owners have two goals after a major weather event: minimizing the damage done to their property and reopening their doors as quickly as possible. Unfortunately, businesses are only as strong as the limits of their insurance coverage, and owners may be severely underpaid in their claims due to misunderstandings involving:
- Property damage. Insurers are in the business of limiting the amount of money they pay out. Even when an event is covered under your policy, there may be exceptions as to what can and cannot be claimed. For example, coverage may pay for high wind damage from a hurricane to roofs and windows, but will not pay for damage caused by rainwater entering the building. In addition, policyholders who expect full payment for their losses may be surprised to discover the differences between ACV and RCV coverage.
- Software and databases. Companies may conduct their business on paper or on digital spreadsheets, but insurers are particular about which data recovery options are included in their policies. A hardcopy business may be out of luck if their insurance will not cover the costs of gathering lost records, while a company reliant on information technology may suffer huge losses if their policies do not cover damage to their remote servers.
- Telecommunications. Phone lines may be down for days or weeks after a storm, interrupting calls between customers and clients. Similarly, technical difficulties can interrupt email contact and credit card machines, making it difficult for businesses to generate income during repairs.
- Income loss protection. This vital form of coverage is necessary for businesses to continue operations while the damage is assessed and repaired. Employees and creditors will need to be paid even as you rebuild, and this coverage can ensure that your spreadsheets stay in the blak. However, there are many different options (and coverage levels) of income loss protection, and the duration of these payments may not last until you open your doors again.
- Flood coverage. Hurricanes often result in flooding, but flood coverage does not come standard on most weather-related protection policies. Coverage must be purchased through the National Flood Insurance Program (NFIP).
- Deductibles. Your policy likely has separate deductibles that must be met for each kind of damage done to the property. After a hurricane, you may end up paying a standard deductible, windstorm deductible, and auto policy deductible all for the same storm.
- Relocation costs. Extensive damage to your commercial structure may require you to move operations offsite while you make repairs—and, of course, you will have to relocate back to the original facility after it is rebuilt.
- Debris removal coverage. Massive efforts are often required to clean up and remove debris after a hurricane, but not all of these costs may be eligible for reimbursement through an insurer.
- Mold coverage. Standing water and humidity are perfect conditions for dangerous mold to take root in the wooden structures of your building. You will need to examine your policy carefully to see if mold coverage is covered, excluded, or capped at a certain level.
- Building code upgrades. If you have an older building, you may have to rebuild according to local building ordinances or updated safety codes. Without specific coverage, this could be a significant additional expense.
Insurers require business owners to secure their premises to prevent unauthorized entry and mitigate any further property damage after a hurricane hits. In many cases, weather advisories make it impossible for owners to return to the property, giving insurers an excuse to deny or devalue claims. If you are struggling to collect fair payment from an insurer after a hail storm, we can help. Simply fill out the form on this page today to contact the Voss Law Firm or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.