Hailstorms are a constant peril for owners and renters of commercial office buildings. From a single shattered window to roof damage that takes years to cause losses, a hailstorm can result in the loss of thousands of dollars in property and inventory costs. Attorney Bill Voss explores how office building owners can strengthen their property damage insurance policies to maximize payment after a hailstorm.
Common Losses to Commercial Buildings Due to Hail Damage
One of the most common forms of large losses due to hailstorms is roof damage, including pockmarked or broken shingles that allow water intrusion. Add this to the cost of replacing whole walls of custom-made glass panels, and costs of repair can quickly spiral out of control. Owners can protect themselves by choosing a replacement cost value (RCV) policy for weather-related property damage, which issues the full amount necessary to replace lost items with like kind and quality without subtracting roof depreciation.
Owners can further enhance their property damage policies by selecting the right coverage options, such as:
- Grounds and parking lots. Hailstones can shred trees, damage lawns, and break outdoor lights and fixtures that go far beyond simple property aesthetics. Owners should take care to cover costly items in areas surrounding the structure, including garden spaces, parking lots, or picnic areas.
- New properties coverage. If you have recently added onto your property or have acquired a new commercial property, these new structures may not be covered under your existing insurance policy. Builder's risk insurance can provide coverage for buildings while they are under construction, and may cover renovation or rebuilding of an established covered structure. Some insurers may also offer temporary coverage for recently-acquired properties (up to 30 days after purchase), but owners are responsible for finding permanent coverage for new properties as quickly as possible.
- Building ordinance coverage. If hail damage to the roof is so extensive that a portion of the structure must be rebuilt, restoration must be compliant with current building codes. Every year that passes after the initial construction, the cost of bringing a damaged portion of the building up to code increases as well. Code upgrade insurance pays for the increased cost of construction due to new building ordinances, including the installation of new utilities and removal of old insulation or structural materials.
- Business auto insurance. While most business owners protect themselves from legal trouble by purchasing business auto insurance, these policies typically only cover accident and collision liability. Property owners and their commercial tenants may want to invest in comprehensive coverage for their company vehicles in order to get compensation for smashed windows or dented bodywork after a hailstorm.
- Special events coverage. A hailstorm can force the closure of one or more offices in order to complete repairs, potentially displacing tenants during their busiest seasons. Seasonal insurance can provide additional coverage during peak business times (such as tax time for accountancy firms) while special events insurance can replace lost income from a celebration, launch, or business gathering due to a hailstorm.
- Business income insurance. Business interruption (or business income) coverage provides up to six months of lost revenue while the structure is closed for restoration. This insurance can be enhanced with certain policy extensions, such as umbrella insurance, which pays an additional amount above once policy limits have been reached.
- Utility services and spoilage coverage. Although business interruption insurance is vital for mitigating losses after an unexpected event, it typically will not cover losses incurred due to a utility interruption. Utility services coverage can protect against less in two forms: direct damage, which extends your property insurance to cover losses and spoilage caused by an interruption of water, gas, or electrical services, and extended interruption, which extends business income replacement until utilities have been restored.
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.