By: Ruthie Lile, Granite Insurance
Insurance policy wording is intricate, convoluted, and can sound like a foreign language. As operators navigate an already “interesting” season and some of you are now approached with the additional hurdle of wildfire threats, the last thing you want to do is try to dig through policy language to make sense of it all. While each insurance carrier is different and each policy can be written differently, we’ve summarized the most common insurance applications to scenarios you may be experiencing.
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“My business’ property has sustained fire or smoke damage.”
Fire damage, or smoke damage from a nearby fire, is a basic cause of loss covered on Property Policies. You most likely have coverage here! Some additional coverages you might be wondering about include water damage from fire extinguishing efforts or debris removal once all is said and done. These are both also commonly included with your coverage.
You should also have this property coverage supplemented with Business Income coverage, which covers your less tangible losses like the ability to run your business and generate revenue. Business Income coverage is fairly standard. If you have “Extra Expense” coverage added on as well, you may have coverage for additional expenses such as rent, relocation costs, or other reasonable expenses you incur during your period of restoration.
“My business’ property has not sustained damage, but access to it is restricted by authorities.”
With some caveats, if access to your business has been restricted by civil authorities, you may have loss of income coverage triggered under the “civil authority” clause on your property policy. This could cover your losses from the inability to run your business and generate revenue. Business Income coverage is fairly standard, but for it to kick in there might be parameters required such as being within a certain distance of the damaged property. There will also likely be a specified waiting period, such as 72 hours after the civil authority action, before this coverage kicks in.
If you have “Extra Expense” coverage added on as well, you could have protection for other costs such as rent, payroll, or additional expenses you incur during your period of restricted access if you attempt to continue operations from a different location.
“My business’ property has not sustained damage, and access to it has not been restricted by authorities, but I chose to close.”
Unfortunately, you will most likely not have insurance coverage for this type of scenario.
In Summation:
Every policy is different. This article is meant to educate you on some norms, but for specific questions on your policy reach out to your agent for clarification. We wish you the best of luck in navigating such difficult times and as always, please reach out if there is anything we can do to support you.
About the Author
Ruthie Lile is an Adventure and Entertainment Risk Consultant on the Granite Insurance team. You can reach Ruthie at rlile@graniteinsurance.com.