Shopping malls are at just as high a risk of hail damage as other Texas businesses, but coverage and insurance claims for these properties are rarely straightforward. A bad hailstorm can cause damage that forces the closure of several businesses or even the entire shopping center, and it may be months before you are able to fully reopen. Attorney Bill Voss explores the unique situation faced by shopping mall owners after a severe hailstorm, including making smart coverage selections and dealing with your tenants until the damage is repaired.
Choosing the Right Shopping Mall Insurance to Cover Hail Damage Losses
While smaller businesses may suffer roof leaks and broken windows after a hail storm, the damage done to a sprawling, multi-level shopping center can extend to many parts of the building. Mall operators must consider how an adverse event will affect their own concerns, but also the concerns of their tenants, employees, and customers. For example, broken skylights, dented siding, chipped paint, and shattered signage must be replaced quickly to prevent water entry, but also to preserve the mall’s reputation and customer appeal.
In order to offset as many business losses as possible after a storm, owners should select insurance options that will cover:
- Rental losses. Extended closures can significantly impact tenant stores, especially if the store has lost a large portion of inventory due to flooding. Some tenants may place their employees and remaining inventory in neighboring stores until repairs are complete, but those who suffer high losses may be forced to leave the mall altogether. Business income replacement can help profits stay steady even if tenants break their leases or cannot pay rent during the closure.
- Inventory losses. While individual stores will have to make claims for lost inventory with their rental insurance providers, mall owners may suffer damage to carpets, lighting fixtures, and other building necessities that can cost hundreds of thousands of dollars to replace.
- Cleanup and sanitation. The process of cleaning up a flooded shopping mall can involve hazardous materials, chemicals, and mold growth. It may be necessary to provide dozens of additional dumpsters to dispose of your tenants’ ruined inventory, as well as water-logged carpets, furniture, insulation, and debris.
- IT losses. Water entry poses a significant hazard to both hardware and software systems, placing computers, unsaved data, company records, point of sale systems, and security systems at risk.
- Seasonal costs. Losses can double or even triple if an adverse event occurs in the months leading up to a big shopping season, such as Christmas or back-to-school. Seasonal business insurance can help the shopping center survive a bad year, and may be used to cover additional construction costs to get the doors back open before a big event.
- Upgrades and matching. Businesses are required to adhere to the most current building codes when making renovations, and law and ordinance coverage can cover the costs of any necessary upgrades. While not required by law, mall owners should also consider matching and line-of-sight enhancements to preserve the aesthetic beauty of the property, updating any old-fashioned or outdated features to give shoppers an incentive to return after reopening.
- Reputation and retention. An insurance policy that provides an extra amount to cover employee retention during repairs can help owners retain trusted and competent staff, preserving the customer experience you have worked hard to build.
Commercial insurance is often the only way companies are able to stay afloat after a major weather event. Unfortunately, many insurance providers operate in bad faith, denying the much-needed payment owners need to get back to business. If your insurer is refusing to provide the hail coverage you paid for, we can examine your policy and negotiate with your insurance carrier to get you the payment you deserve. 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.