A hurricane can be devastating for a wide range of manufacturing businesses, causing significant losses to both global enterprises and small-batch operations. Whether you own a chain of food and beverage services or provide specialty metal and plastic products, it is vital that you have the right type and limits of coverage to restore operations after a hurricane. Attorney Bill Voss explores industrial coverage options, extensions, and how to protect against large losses caused by a hurricane.
Insurance Options That Can Protect Against Industrial Hurricane Losses
The majority of hurricane losses result from severe flooding to buildings, basements, and open land. However, many commercial policies will not cover flooding caused by a natural disaster. In addition to private commercial insurance, manufacturers should purchase a policy under the National Flood Insurance Program (NFIP) to cover hurricane-related flood losses.
When it comes to selecting commercial property damage insurance, owners of industrial facilities should consider both the type and scale of operations, selecting hurricane coverage that will provide for:
- Heavy industry property damage. Business property insurance will typically cover an insured structure and its contents. However, the sheer size of a manufacturing facility and the specialty equipment used in production may require additional coverage, extra deductible, and higher policy limits.
- All-risk coverage. Although these policies may cost more than basic coverage, an all-risk property damage policy can ensure payment for natural hazards and all related perils, such as wind, water, and interruptions in utility services stemming from a hurricane.
- Code upgrade coverage. Building ordinance coverage, also called code upgrade coverage, provides payment for the additional cost of meeting new building laws or ordinances when rebuilding damages portions of a structure.
- Commercial auto damage. Many industrial operations have their own company vehicles, such as vans, trucks, shuttles, forklifts, and golf carts. If your property has its own vehicles, they should be protected under a commercial auto policy that has natural disasters listed as a covered peril. This coverage should also include any specialized equipment inside the vehicles, such as tracking devices, GPS navigation, or dispatch radios.
- Inland marine. Manufacturers may have thousands of dollars in completed products traveling to their many distributor locations, all of which may be lost in transit when a hurricane strikes. Inland marine coverage can be used to cover the loss of any products, materials, or machinery that are on the move, such as replacing the cost of newly-built automobiles, replacing molded metal and plastic components on their way to an assembly plant, or covering the cost of spoiled food or refrigerated products due to stranded delivery vehicles.
- Builder's risk and new properties coverage. If you were in the process of expanding your operations during a hurricane, your policy may not cover properties that have not yet been insured. New properties insurance provides limited-time coverage during the construction of a new warehouse or the acquisition of property to serve as a secondary manufacturing location.
- Business income loss insurance. A hurricane can interrupt operations for months, causing costly profit losses in steel plants, mining operations, plastic production, automotive manufacturing, cement factories, and printing and paper industries. Business interruption insurance replaces lost profits up to policy limits, and can also cover the costs of relocation to a temporary site and ongoing expenses (such as employee payroll).
- Umbrella coverage. Business umbrella coverage and extra expense coverage offer an additional layer of protection in large loss situations. If a hurricane causes losses that cost more than the limits of your policy, these forms of insurance provide additional payment for repair or rebuilding. Due to the large scale of industrial operations, these policy enhancements can offer several million dollars in additional compensation.
If you are struggling to get fair payment from an insurer after a hurricane, our experienced insurance attorneys will work to get the coverage you deserve from your commercial insurance carrier. 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.