A successful retail business is just as prone to weather-related damage as any other commercial enterprise. A tornado has the ability to reduce whole shopping complexes to their foundations—and while your business is more than just a building, the costs of putting the pieces back together again can significantly eat into your profits. Attorney Bill Voss examines property damage claims involving retail centers and shopping malls, including how to select the policy endorsements to protect against tornado losses.
Insurance Options That Can Help Shopping Centers Reopen After a Tornado
The right property damage insurance can make all the difference after a storm strikes your business. Unfortunately, property damage coverage can vary widely depending on the policy options an owner has selected. For example, owners who have selected a replacement cost value (RCV) policy should recover the full amount necessary to replace lost items with like kind and quality, while those who paid for an actual cash value (ACV) policy will receive an amount that subtracts depreciation. The second policy may have cheaper premiums, but also provides far less compensation after a loss.
With this in mind, policyholders may have to pay for much of their tornado damage losses out-of-pocket if their policies do not include:
- Multi-peril protection. A tornado may be preceded by heavy rains and hail, and may be a precursor to flooding that persists for weeks after the storm. Each of these perils poses a significant risk to your business, but insurers may deny coverage that is caused by multiple perils, especially if it is difficult to determine which peril was the direct cause of the damage.
- Cleanup and restoration. Although many insurers offer payment for debris removal (such as broken glass, ruined carpets, and downed tree branches), these are often included as options or endorsements to an existing policy. Owners should select the coverage that they are most likely to need after a large loss, including hazardous materials cleanup, industrial drying and water removal, and mold growth prevention.
- Utility interruptions. Retail stores and shopping malls can house many different types of inventory, all of which are at risk when there is a sudden power outage. Refrigerated goods may perish, electronic data and customer records may be lost, and lack of power to electric gates and security cameras can open the property up to vandalism.
- Special equipment coverage. Tornadoes can destroy high-value equipment, including LED billboards, lighting and security, speakers and PA systems, electric billboards, and computer networks.
- Code upgrade coverage. Any portion of the structure that must be rebuilt is required to be in compliance with the most current version of the building code. If many years have elapsed since the building was first constructed, upgrades can significantly increase the costs of construction.
- Grounds and landscaping repair. It is up to the policyholder just how much of the property will be covered under the policy. Most property damage policies extend to the structure and outdoor signage, but may not pay to restore the grounds around the structure. Properties may need coverage specifically for the parking lots, light poles, trees, green spaces, and gardens around the main structure.
- Seasonal business insurance. Malls are at particular risk of profit losses during the Christmas shopping season, but can also lose large amounts if a tornado prevents a large scheduled event from taking place. Seasonal and special event insurance is vital for replacing lost income during a busy part of the year.
- Business interruption insurance. Business closures that last for a month or more can cause losses that total into the millions. Business interruption insurance pays to replace lost profits for up to six months after a covered loss, allowing owners to focus on building restoration while maintaining employee payroll and operational costs.
If you need help with your tornado damage insurance claim, we can work to get you full and fair payment to make repairs and reopen your doors. Please contact the Voss Law Firm at 1-888-991-3212 or simply fill out the form on this page today to get answers to your questions.