If you spend your life building homes, businesses, or other structures, you are going to receive a lot of calls after a tornado strikes. Unfortunately, a failure to secure adequate insurance for your business may not put you in the best place to help others after a storm. Attorney Bill Voss explores vital tornado insurance coverages for general contractors and home improvement companies, helping them secure the funds they need to get back to work after a storm.
Policy Extensions That Can Help Contractors Recover from a Tornado
The best way to avoid denials or underpayment on a tornado damage claim is to tailor your policy to the specific type of work you perform, ensuring that your coverage will pay for the likeliest and most costly forms of damage. For example, you may wish to consider endorsements that will protect your:
- Heavy equipment. Consider the most expensive equipment you use every day. Would you be able to offer your services if your grinders, saws, hydraulic lifts, or power tools were not working? If your property damage policy limit is insufficient to cover the replacement cost of these items, you may need a special equipment endorsement can provide additional funds.
- Rented equipment. Both small and large construction firms rely on rented equipment from time to time, but these items are generally not covered under a standard property damage policy. Rental policies can pay to replace any equipment on your property that is under a long-term lease or short-term rental from a third-party.
- Commercial vehicles. Whether you have a single pickup truck or a fleet of business vehicles, a commercial auto policy is vital for repairing the damage caused by a tornado. If you select comprehensive coverage, you may even be able to collect payment for non-collision losses (such as tree limbs falling on a windshield).
- Profits. Business interruption coverage is the most important coverage for any commercial enterprise. Business income loss insurance will continue to pay your operational expenses for six months after a loss, allowing you to pay your employees, order additional building materials, or even rent a temporary business location.
How to Get the Most Out of Your Tornado Damage Coverage
As tornado damage can result in large losses, contractors and building companies in high-risk areas may want to purchase policies that allow for additional funds. For example, you may be able to collect more on your claim if you have selected:
- All-risk coverage. All-risk property damage policies are usually more expensive than basic coverage, but they provide payment for many perils excluded under cheaper policies. An all-risk policy may cover damage related to natural disasters, interruptions in utility services, or even data loss and vandalism in the aftermath of a storm.
- State-specific storm coverage. Private insurers may not extend tornado coverage to companies located in high-risk areas, so business owners may need to purchase a policy specifically to cover these perils. For instance, businesses located along the Texas coast may need to secure tornado coverage through the Texas Windstorm Insurance Association (TWIA).
- Extra expense coverage. Extra expense coverage is actually an extension to business income loss insurance, and pays for any additional expenditures incurred during rebuilding. Owners can be reimbursed for any measures they take to reduce the total amount of loss, such as site cleanup costs, advertising to retain clients, or hiring temporary workers to respond to increased storm damage projects.
- Umbrella insurance. If the total amount of your claim has exceeded the policy limit, umbrella coverage offers an additional amount above and beyond the maximum claim limit. This can be invaluable in large-loss situations, and even allow businesses to avoid extended closures or financial restructuring due to a single adverse event.
If you are having trouble getting fair payment from a commercial insurance company, the Voss Law Firm can examine your policy, investigate your losses, 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.