Your phone may ring off the hook after a major windstorm, but what happens if your construction business has also been damaged in the gale? The amount and extent of your construction insurance may be the difference between making a profit or ending up in the red. Attorney Bill Voss explores vital forms of coverage for contractors and renovation companies, helping business owners get proper compensation after a storm.
Important Windstorm Coverage Options for Construction Companies
Anyone who builds homes, buildings, or other structures needs some form of construction property damage insurance. From general contractors and home improvement firms to builders and designers of city streets and infrastructure, every construction business will face unique risks in a storm. The best way to ensure fair coverage after a loss is to tailor your policy to the specific type of work you perform, protecting the equipment that is most vital to your enterprise.
When purchasing construction insurance, you may wish to consider:
- Location. If your business is located in an area where high winds are common, your private insurer may refuse to cover wind damage losses. For example, businesses in Texas coastal areas are advised to secure insurance coverage through the Texas Windstorm Insurance Association (TWIA).
- Builder's risk insurance. This coverage pays for on-site property damage of a site under construction, including construction materials that are used or stored on site. Most insurers will limit coverage to the value of the structure when completed, including materials and labor costs (not including land value).
- Commercial vehicle insurance. If your company uses pickup trucks, cars, vans, trailers, or any other business vehicles, commercial auto coverage is vital to protect you against third-party bodily injuries or property damage. Comprehensive coverage will provide payment for non-collision losses (such as if a tree branch is thrown through the windshield in a storm), while rental vehicle coverage will pay for damage to vehicles you have borrowed or rented for a specific job.
- Equipment breakdown. Property damage insurance will typically cover an insured business location structure and its contents, but damage to high-value equipment such as saws, lathes, planers, and other tools may quickly exceed coverage limits. Equipment breakdown and special equipment coverage can cover equipment malfunction and the loss of expensive items.
- Goods in transit. Building materials in your warehouse or business location may be insured against damage, but items that are traveling to or from the site may not be covered. Inland marine coverage can cover construction materials such as tools, excavators, lumber, shingles, forklifts, beams, or machinery that is damaged while it is on the move.
- Business income loss insurance. Business interruption coverage is vital for any commercial enterprise, as it pays to replace lost profits for six months (or longer) after an adverse event. Business income insurance will typically cover employee payroll and operating expenses until the business is able to resume normal operations.
- Extra expense. Extra expense coverage acts as an extension to business income loss, covering the extra expenditures incurred during rebuilding. It can be used to rent a temporary location or construction equipment, pay for advertising to reassure clients, or pay for measures that will reduce the total amount of loss. Insurers will usually not cover expenses unless there is a substantial amount of supporting documentation detailing the reasons why the expenses were incurred, why they were necessary, and how they were directly caused by the covered event.
- Umbrella insurance. Umbrella coverage kicks in if the policy limits on a single claim have been reached, allowing coverage for an additional amount above and beyond the normal rate. In large-loss situations, umbrella insurance can allow businesses to reopen more quickly or even avoid bankruptcy.
If you are struggling to rebuild after a severe wind storm, our attorneys can work to get full and fair payment 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.