Hailstorms often lead to damaged roofs and shattered windows, and owners of manufacturing properties can suffer significant losses. From small-batch operations to nationwide suppliers, it is vital for manufacturers to choose the hail damage coverage that will allow them to resume operations as quickly as possible. Attorney Bill Voss explores how to strengthen property damage insurance policies, allowing manufacturers to maximize payment after a hailstorm.
Hail Policy Basics and Endorsements for Industrial or Manufacturing Operations
One of the most common ways hailstorms cause large losses is roof damage. Industrial roofs are often made of interlocking sheets of metal, making it much more costly to replace than damaged shingling. Flat roofs that are damaged by hail are also at risk of water intrusion, causing damage to the structure long after the storm has passed. Owners should weigh the costs of a replacement cost value (RCV) policy for weather-related property damage, especially if glass window panels, siding, and other elements of the structure must be custom-made.
Once you have a basic property damage policy, you can strengthen it by selecting coverage endorsements that suit your needs, such as:
- Industry-specific losses. While commercial property insurance will usually cover an insured structure and its contents, there may be some exclusions for high-value items (such as industrial or specialty equipment). A special equipment endorsement can cover tanks, conveyors, ovens, drill presses, and other items used in production.
- Code upgrade coverage. If your structure is more than 10 years old, you may wish to purchase building ordinance coverage, also called code upgrade coverage. This will allow you to recoup the increased costs of construction incurred to comply with new building codes.
- Utility services and spoilage coverage. If a hailstorm knocks out the power or internet services to your location, utility services coverage can cover income losses and spoilage of perishable food items at your location.
- Commercial auto damage. Hailstorms have been known to break car windows and dent bodywork, damaging owners’ vehicles as well as their reputations. Commercial auto coverage can pay to repair or replace damaged company vehicles (such as vans, trucks, forklifts, and golf carts) as well as any specialized equipment inside the vehicles, such as tracking devices or GPS navigation systems.
- Inland marine coverage. Manufacturers constantly have raw materials moving in and completed goods moving to distributors, any of which can be damaged in transit. Inland marine coverage protects property (including products, components, or machinery) that is away from the insured location. It may also be used to cover lost refrigerated products that spoiled as a result of a broken-down delivery vehicle.
- Builder's risk and new properties coverage. If you have recently acquired a secondary location, new properties insurance can provide limited-time coverage for damage to a newly-purchased structure. Similarly, if you are constructing a new warehouse or extending your structure, a builder's risk policy can cover storm damage incurred before the construction is complete.
- Special events coverage. Even if a hailstorm only causes closures for a few days, the storm can result in overwhelming costs if it strikes during your busiest season. Seasonal insurance provides additional payment for damages during peak business times, while special events coverage can replace lost income from a grand opening, corporate visit, or new product launch due to a hailstorm.
- Business income loss insurance. Business interruption insurance is the most important coverage for any company. It replaces lost profits for up to six months after a covered event, including the costs of employee payroll and relocation to a temporary site and ongoing expenses—a potential cost of several million dollars for large-scale industrial operations.
If you are having trouble getting the full value of your hail damage claim from your insurance company, the Voss Law Firm can examine your policy, investigate the details, and fight on your behalf. Simply fill out the contact form on this page today or order a free copy of our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.