A basic property damage policy will cover fire losses from the roof to the foundation of a commercial structure—but from there, coverage can vary depending on the amount you want to pay. Instead of purchasing a more expensive overall policy, business owners can choose one or two endorsements to add to their existing policy that would help them the most after a major loss. Attorney Bill Voss takes a look at some add-on options to standard fire policies and determines when they might be worth paying an additional premium.
The Right Fire Coverage Endorsements Will Depend on Your Business Needs
No matter which of the three different types of fire insurance policies you have purchased for your business, there will always be exclusions to your coverage. Insurers may refuse to cover a loss because it is too expensive, happens frequently, or some combination of the two—and depending on the extent of the fire, that missing coverage can cost you thousands out-of-pocket.
Fire insurance endorsements that provide the most benefits to business owners include:
- Business income loss. Income loss is the most important coverage endorsement for any type of business. This coverage pays for the loss of profits due to relocation or closure during repairs, and can be extended to cover extra expenses incurred during rebuilding.
- Specific perils. Some businesses face specific fire risks, such as flames from a restaurant stove or combustion of fuels stored on the property. Owners should consider the likelihood of each type of fire peril (including arson, wildfires, spontaneous combustion, or terrorist activity) and purchase coverage accordingly.
- Relocation costs. Additional forms can be added to cover rent payments incurred while temporarily operating the business in a different location and the temporary removal or relocation of stock.
- Rebuilding costs. Separate endorsements may be offered for nearly all parts of the reconstruction process, including architect’s and engineer’s fees, upgrading the new structure to meet current building codes, and matching the new materials to the undamaged portion of the structure.
- Startup costs. If the fire caused a total loss, startup insurance may cover costs incurred as the owner reopens the business from the ground up. An additional enhancement can insure additions, alterations, or extensions to the new structure, giving further protection to the business in the future.
If you are having trouble getting an insurer to cover the costs of a fire, we can examine your policy and get you the full amount you are owed. 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.