Hurricanes have the ability to level whole counties, causing devastating losses to homes, businesses, and lands that can take years to fully rebuild. While owners of auditoriums and sports stadiums may not live inside these properties, natural disasters can result in the loss of livelihood and employment that the local economy depends on.
Attorney Bill Voss explores coverage options that can pay for large losses caused by a hurricane, as well as selecting the right policy endorsements for your venue.
Essential Hurricane Coverage for Stadiums and Sporting Venues
One of the best ways to protect against large losses is to select a policy that will provide payment for damages at replacement cost. An actual cash value (ACV) policy may offer lower premiums, but insurers will subtract depreciation before issuing payment for your losses. In contrast, a replacement cost value (RCV) policy pays the full amount necessary to replace damaged items with those of “like” kind.
Owners of sporting venues and arenas should examine their policies to determine if their hurricane coverage will include:
- Extensive property losses. Owners may have to perform a property appraisal to ensure that the amount they pay for will be enough to repair or replace the full extent of losses. Appraisals may need to be done every few years to account for increased capacity, additions to the structure, special contents, and depreciation estimates.
- Automobiles. Buses, shuttles, employee vehicles, and other company cars should be protected if they are housed or stored on your insured property. Commercial auto coverage such as a comprehensive damage policy may pay for weather-related losses as well as rental reimbursement if you have to pay for alternate transportation.
- Parking garages. Large-scale stadiums often require parking decks that are similar in size to the arena itself, and a hurricane can cause structural damage that makes it unsafe for visitors to park at the venue.
- Playing surfaces. Turf, ice, courts, goalposts—no matter what type of playing surface your sport requires, it must be restored in a way that is safe for future games. Replacement cost policies are particularly useful in these cases, since owners will need to pay whatever it costs to bring play areas to industry standards if they want teams to use their facilities.
- Sporting equipment. Hurricanes can sweep away locker rooms, recovery and medical facilities, and equipment storage bays that make it even more difficult to reopen quickly. Special equipment extensions can pay to replace team facilities, lighting rigs, digital scoreboards and billboards, standardized helmets and padding, and other highly-specialized equipment.
- Losses from service interruptions. Municipalities and service providers may not be able to restore public utilities for days after a hurricane, causing losses that may last long after the storm has passed. Extended power and communications outages can mean the loss of food and concessions as well as electronic data, while interruptions in sewer and waste disposal services can put cleanup crews at risk of biohazards exposure. A power outage can also affect card readers, gates, and surveillance cameras, causing vandalism due to an inability to properly monitor the grounds.
- Property in transit. In addition to damage at the insured location, owners of stadiums and arenas may have valuable portable property that can be damaged in transit. Inland marine coverage is vital for protecting property on the move or stored at offsite locations.
- Tournament or special event losses. Amphitheaters and civic centers may lose millions if they are unable to host major tournaments. Seasonal business insurance can replace lost ticket sales, concessions, souvenirs, and other revenue from events that are regularly hosted at the venue.
- Lost income. Business interruption insurance is vital for all businesses, as it pays for up to six months of lost revenue due to a covered loss. Coverage extensions such as umbrella insurance and extra expense coverage can provide additional funds once the policy limits have been reached.
If you are struggling to get fair payment from an insurer after a hurricane, our experienced insurance attorneys will work to get the coverage you deserve from your commercial insurance carrier. Simply fill out the form on this page today to contact an insurance attorney at the Voss Law Firm or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.