NEW YORK, September 2, 2011 — As business owners on the East Coast begin the claims filing process, the Insurance Information Institute (I.I.I.) reminds them that business insurance provides wind coverage for property damaged or destroyed by Hurricane Irene. In addition to coverage for the business’s structure, it also covers office furnishings, inventory, raw materials, machinery, computers and other items vital to business operations.
Business income insurance (also known as business interruption insurance) will cover the loss of income from Hurricane Irene if there was direct physical loss or damage to the business premises. Coverage for business income generally begins 72 hours after the time that the premises suffered the physical loss and ends when either the property is repaired or replaced or when the business is resumed at a new permanent location, whichever is earlier. In addition, if the business has extra expensive coverage, it will pay for extra expenses during this time after a loss, such as the costs associated with temporary relocation, space rental, advertisement and equipment.
Coverage for flood damage resulting from surface water, including storm surge caused by hurricanes, is excluded under standard business insurance policies. Flood coverage is available both from the National Flood Insurance Program (NFIP) and from some private insurance companies. Commercial policies, which are more comprehensive policies for businesses, may include flood coverage, so business owners need to check with their insurer. Flooding to commercial vehicles is covered under the comprehensive section of standard commercial auto insurance policies, which is optional.
Business owners who have suffered losses need to contact their insurance company or agent as soon as possible to start the claims filing process,” said Loretta Worters, vice president with the I.I.I.
The I.I.I. offers the following advice to facilitate the insurance claims filing and settlement process:
Be prepared to give your insurance agent or company representative a description of the damage to your property. Your agent will report the loss immediately to your insurance company or to a qualified adjuster, who will contact you as soon as possible in order to arrange an inspection of the damage. Make sure you give your agent a telephone number where you can be reached.
If it is safe to access the area, take photographs of the damaged property. Visual documentation will help with the claims process.
Prepare a detailed inventory of all damaged or destroyed property. Make two copies—one for yourself and one for the adjuster. Your list should be as complete as possible, including a description of the items, dates of purchase or approximate age, cost at time of purchase and estimated replacement cost.
Collect canceled checks, invoices, receipts or other papers that will assist the adjuster in assessing the value of the destroyed property.
Make whatever temporary repairs you can without endangering yourself. Cover broken windows and damaged roofs and walls to prevent further destruction. Save the receipts for any supplies and materials you purchase as your insurance company will reimburse you for reasonable expenses in making temporary repairs.
Secure a detailed estimate for permanent repairs to your business from a licensed contractor and give it to the adjuster. The estimate should contain the proposed repairs, repair costs and replacement prices.
If you are filing a business income claim, you will need to provide the following records to your insurance claims adjuster:
Proof of the income your business was generating both before and after the interruption began.
The cost of conducting business from a temporary location.
Detailed records of business activity.
A list of expenses that continue while your business is suspended, such as advertising, utilities, etc.