Medical facilities face unique risks when a hurricane strikes. While they are just as likely to be damaged as any other property, they may be overrun with patients requiring care in the aftermath of the disaster, doubling the burden of repair and recovery. Attorney Bill Voss explores the complex nature of property damage claims for hospitals and clinics, as well as which insurance selections are most beneficial to hospital board members and administrators.
Essential Coverages to Protect Medical Facilities From Hurricane Losses
The immediate aftermath of a hurricane can be overwhelming for hospital administrators who are desperate to serve patients without placing them at further risk. It is crucial for operators of medical facilities to choose policy limits and endorsements that will allow them to collect the maximum amount for their losses, even if it means paying a higher hurricane deductible.
Administrators may need to double-check their property damage insurance policies do see if their coverage includes:
- Increased construction costs. Medical facilities must meet a variety of different building and health department codes, making renovation and construction a complicated process. Building ordinance insurance can pay to restore damaged structures in compliance with current building codes and offset the costs of special concerns for medical services, such as installing ramps and widening doorways for patients in wheelchairs.
- Special equipment coverage. Hospitals and clinics have a wide variety of expensive and highly-specialized medical equipment, including x-ray, CAT scan, and MRI machines, hospital beds, industrial refrigerators and freezers, computer systems, and more. Any medical equipment vital to your operation should be specifically named under your property damage policy or covered under a policy endorsement.
- Inland marine insurance. Hurricanes can sweep across whole counties, damaging property both on and off your insured location. Transportation and cargo insurance, also known as inland marine insurance, pays to replace any inventory or machinery lost in transit—an invaluable coverage when goods traveling by car are stranded due to flooded roads.
- Spoliation and service interruptions. Extended power outages from a hurricane can cause the loss of a wide variety of refrigerated items, from patient food and drinks to donated blood and human organs. Utility interruption insurance covers losses caused by a lack of electrical power, natural gas, phone services, internet, waste disposal, or municipal water, including replacement of spoiled inventory and increased costs of cleaning due to biohazardous waste.
- Rental coverage. Both small and large medical facilities may rent scanners, computers, extra patient beds, vehicles, diagnostic testing equipment, and other equipment needed for their daily operations. All equipment not owned by the facility should be protected under a rental insurance policy. This insurance not only replaces damaged leased equipment or services, it may be combined with equipment breakdown insurance to provide payment for resulting business income losses.
- Business interruption insurance. Whether you run a community of hospitals or small independent clinic, you could stand to lose millions as your doors remain closed due to repairs. Business interruptions insurance replaces lost revenue during the period of restoration, including the costs of paying employee salaries to retain vital staff members, replacing income from canceled procedures, and out-of-pocket costs due to a covered event.
- Flood insurance. Flooding is one of the most common—and most hazardous—side effects of a hurricane. Unfortunately, flooding from a natural disaster is typically not covered under commercial property damage policies. Administrators will have to secure flood coverage separately through the National Flood Insurance Program (NFIP) in order to recover costs for damage to the foundation, basements, electrical systems, framing, and contents due to natural flooding.
If you are struggling to get fair payment from an insurer after a hurricane, our attorneys will work to get the coverage you deserve from your commercial insurance policy. 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.