Hail damage is not just a concern for homeowners, but a constant peril to anyone who owns a business. Proprietors of sports stadiums, football and baseball fields, and outdoor arenas have to take care to protect their property and their profits when storms sweep through—and a failure to consider the full breadth of the property can lead to underpaid claims. Attorney Bill Voss examines hail damage insurance options for owners of sporting venues and fields, including policy endorsements that can make it easier to recover after a storm.
Insurance Options That Can Protect Against Hail-Related Losses
Most hail claims involve damage to roofs and windows, and commercial buildings are no exception. While hail damage to a sports arena’s roof may seem trivial, a punctured roof can cause thousands of dollars in rain and water damage losses if not corrected quickly. Owners should take a careful look at their policies to determine whether their weather damage coverage contains anti-concurrent causation clauses, as well as any exclusions that could be used to deny coverage.
If you own an arena, amphitheater, coliseum, or stadium, your insurance policy should have a variety of protections, including:
- Physical damage at replacement cost. While an actual cash value (ACV) policy will subtract depreciation before issuing payment, a replacement cost value (RCV) policy will pay the full amount necessary to replace covered items with those of “like” kind. An RCV policy will allow you to replace damaged equipment to industry standards without sacrificing the quality experience your visitors expect from your venue.
- Equipment extensions. Hail damage in an open-air stadium can affect lights, scoreboards, digital billboards, seats, security cameras, card readers, gates, and other highly-specialized equipment. Owners may need to consider whether investing in enhancements for specialty equipment is worth the added cost.
- Code upgrade coverage. All damaged structures must be rebuilt in a way that is compliant with current building codes. If your arena was built over 10 years ago, it could take millions of dollars to bring the entire structure up to code. Upgrade coverage pays for the cost of additional construction, demolition, and installation of new utilities.
- Grounds and landscaping. Even if the inside of your stadium is protected from the elements, hail storms can shred trees, kill plants, and leave pockmarks all over your grounds. A property coverage endorsement may pay to remove branches and other debris, as well as to replace plants, sheds, and outdoor features.
- Commercial auto. If you have team buses, shuttles, or other company vehicles that are stored in the open air, you may want to invest in comprehensive damage insurance to cover hail damage and other non-collision losses.
- Inland marine. Inland marine coverage will pay to replace damaged property that is stored at a location other than the insured property, or was damaged while in transit to the stadium.
- Builder’s risk coverage. If a portion of your arena is undergoing expansion, you should invest in builder’s risk insurance to cover the new structure while it is under construction.
- Special event losses. Hail damage can cause extended closures that force teams to play at alternate venues. If your arena regularly hosts tournaments, fundraisers, championship games, or other major events, you may wish to invest in special events coverage to replace lost income from the event. If you earn more profits in one part of the year, seasonal insurance can replace any income lost during the busy season due to a covered loss.
- Business income loss. Business income (or business interruption) insurance provides a lump-sum payment to replace lost profits caused by a covered loss. Profits can be replaced for six months or longer, giving owners time and funds to conduct repairs.
If you are having trouble getting the full value of your hail damage claim from your insurance company, the Voss Law Firm can investigate the details, examine your policy, 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.