Floodwaters can damage homes and businesses alike, causing structural damage that can ruin whole blocks of buildings. However, owners of passenger transportation businesses can not only suffer the loss of a structure, but thousands of dollars in flood damage to vehicles. Attorney Bill Voss examines the essential coverage for owners of taxi and shuttle services, helping them update their policies before a flood.
Shuttle and Bus Services Are at Particular Risk in a Flood
The first thing owners should realize is that flood damage caused by rainwater, hurricanes, or storm surge is typically not covered by private commercial insurance. In order to get payment for flood damage from a natural disaster, business owners must buy a separate policy through the National Flood Insurance Program (NFIP).
When it comes to commercial auto coverage, transportation businesses should select coverage options that are specifically tailored to their unique needs. It is not enough to carry liability insurance in case your vehicles are involved in a collision, for this coverage will not provide payment for property damage outside of a crash.
Whether you have a large or small fleet of limousines, taxis, SUVs, buses, vans, or coaches, your policy should address a variety of perils such as:
- Physical damage. Physical damage insurance protects against financial losses caused by perils specifically named in the policy. This coverage is particularly useful for business vehicles that are leased or are not fully paid for.
- Comprehensive physical damage. Comprehensive damage protection may have a higher deductible, but will often cover significant losses due to non-collision events. If your vehicle is damaged by flooding or your fleet suffers a total loss, comprehensive damages may pay replacement costs.
- Specified peril. Sometimes called Combined Additional Coverage (CAC), specified peril insurance protects your vehicles from the specific perils and hazards that are listed on the insurance policy. Flooding may be added along with other threats such as fire and theft, although a specific deductible may apply to each one.
- Rental. If transport services make up a significant portion of your business, rental insurance is a necessity to ensuring you can continue to serve customers after the loss of your vehicles. While your own vehicles are being replaced or repaired, this insurance pays for rental costs of temporary buses and vehicles until yours are back in service.
- Towing. Many flooded vehicles cannot be moved under their own power, requiring whole lots to be towed away at the owner’s expense. Towing insurance can cover the expense of hiring towing services to send the vehicles to the owner’s preferred repair location.
- Accessories. Transport vehicles may be outfitted with specialized equipment depending on their uses, such as mileage meters, satellite navigation systems, high-quality sound systems, or even refrigerators and bathrooms. Accessories insurance can pay to replace these additional losses that may not be covered under a standard vehicle policy.
- Uninsured or underinsured motorist. In some cases, uninsured or underinsured motorist coverage may be used to cover property damage caused by someone other than your drivers. If the flooding occurred on someone else’s property and that person did not have sufficient insurance to cover your loss, your UM coverage could be used to make up the difference.
- Business continuity. Business interruption coverage is essential for any type of business, as it can replace any lost income for up to six months after a covered event. Extra expense coverage may also be used to transfer vehicles, inventory, and equipment to a secondary location, and pay for additional costs incurred during the restoration process.
If you are having trouble getting the flood insurance coverage you paid for, the Voss Law Firm can help. Simply fill out the form on this page to get your questions answered by an insurance attorney, or learn more about filing a claim in our book, Commercial Property Owners Must Read This BEFORE Filing an Insurance Claim.