Water Damage: The Reason You Pay for Business Insurance

10/1/2018 (Permalink)

Water supply line burst causing flooding in a Lutherville, MD store

Water damage can be one of the costliest repairs made by business owners. Between the broken pipes and water cleanup, owners can be left paying the expense of not only the damage caused but for the loss of business during the restoration. This combined loss is what makes business insurance so important; however, it is also essential to understand what business insurance covers, standard exclusions, and why you may benefit from additional coverage.

1. Broken Pipes

As anyone living in Lutherville, MD, knows, the winter can be problematic for even the most prepared business owners. Frigid temperatures can potentially lead to frozen water lines, which cause increased pressure and may eventually burst the line. Most commercial insurance policies likely cover the sudden damage caused by burst lines.

2. Storm Damage

Additionally, most policies will cover storm damage, like broken windows or damaged roofs, but this can depend on the type of damage. For example, hail damage that causes a broken window is likely covered; however, heavy rains that cause a flood is most likely not covered under a traditional business insurance policy.

3. Be Aware of Exclusions

Every policy will have exclusions. Some of the typical exclusions that will require additional coverage are flooding and sewer backups. The water damage caused by these two issues alone can create dire situations for a business and its continued operations, often requiring the work of a restoration company. If you want to cover these two disasters, then you may want to add an endorsement to your current policy as well as purchase flood insurance separately.

4. Combining Flood Insurance and Business Insurance

The combination of flood insurance and business insurance with an additional sewer and drain endorsement can be a balanced policy that protects you from numerous potential disasters; however, it is still essential to be aware of any exclusions or deductibles.

Water damage can cripple a business and, depending on your coverage, you, as the owner, may be left footing the bill; however, if you choose the right combination of insurance policies and endorsements, the potential risks of flooding and burst pipes may not seem like that big of a concern.