Understanding All-Risk Policies
Unless especially excluded, all-risk insurance policies are meant to cover a wide range of damage. All-risk plans usually cover losses resulting from direct physical damage to property in regard to business disruption. The terms and exclusions of the policy will determine whether or not business interruption resulting from storms is covered, though hurricanes present a special mix of hazards, such as wind and flooding, which are generally handled differently.
Coverages for Business Interruption and Wind Damage
Many times, hurricanes seriously damage buildings, machinery, and other assets by their wind. Should your company suffer property damage from hurricane winds and this cause operations to stop, an all-risk coverage could cover lost income during the period your company cannot operate. While the company recovers, business interruption insurance inside the all-risk policy would help cover continuous costs such as rent and wages. This depends, nevertheless, on wind damage being a covered risk in the policy.
Exclusions and Flood Damage
Flood damage is one of the most important things to take into account; most all-risk plans exclude it unless special flood coverage is bought. Many times, hurricanes create flooding; without flood insurance, your business interruption claim could be refused should flooding be the main reason the operations were disrupted. Reviewing their policies will help business owners make sure they have a flood endorsement or coverage, therefore preventing gaps in protection.
Civil Authority and Required Evacuations
Sometimes, a business might not be physically harmed by a hurricane but be obliged to close because of orders from government officials or required evacuations. Certain all-risk plans cover business disruption in such circumstances, even in cases when the business property is not physically damaged. Reviewing the terms of civil authority coverage is therefore very important as the policy and insurer considerably affect the coverage.
Conclusion
Although all-risk plans usually cover business interruptions resulting from wind damage connected to hurricanes, they usually exclude flood-related damages unless extra coverage is bought. To guarantee they have the required protection for all possible hurricane hazards—including wind, flooding, and disruptions resulting from civil authority—business owners should carefully go over their plans. In the case of a storm, guaranteeing thorough coverage can make a big difference.