All Other Damages
Get Immediate Help When You Have Damage
Property damage can come in many forms and doesn’t always fall into one notable category; however the outcome can be just as disruptive and costly. Significant losses can be seen outside of physical damage causing interruption to your business, stem from faulty installation, relate to mechanical failures, or other causes happening immediately or over a long period of time. Regardless of the reason, you deserve to know if your insurance policy should cover the damages.
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Types of Damages
Business Interruption
Vandalism / Theft
Sinkhole
Explosion
Boiler / Mechanical Failure
Loss By Collapse
Sinkhole Failed Repair
Aircraft / Marine
Business Interruption
Business interruption insurance, also known as business income coverage, is normally a part of commercial insurance policies and is different from any covered physical damage. It is not sold separately; rather it is usually an add-on or rider policy. The purpose of this coverage is to replace or help cover the costs of lost income or extra expenses that may arise after the property is affected by a covered peril. This can be seen in the use of covering rent/lease payments, employee wages, taxes, loan payments or other non-physical items. Unless you have experienced a loss as a business owner, you may not understand the huge necessity this can be and its importance after experiencing a loss.
Boiler / Mechanical Failure
These types of claims are often referred to as equipment machinery breakdown claims, boiler and machinery claims, systems breakdown claims and/or machinery insurance damage claims. Boiler & Mechanical Insurance or Equipment Breakdown Coverage includes the replacement or repair costs associated with damaged or broken equipment, as well as the resulting loss of revenue (business income) while the equipment is being repaired or replaced. Normal wear and tear is not a part of the coverage. The policy can be endorsed to include Contingent Business Income—this covers you in the event a critical component of your business e.g. a vendor or supplier can’t meet their obligations to you, the insured, due to a mechanical breakdown of their own. Some policies can have exclusions that may or may not work against you, such as interruption loss or relocation cost.
Vandalism / Theft
There are unique aspects of this peril that require special attention and expertise. Typical questions posed by insurance companies after receiving notice of a theft/vandalism claim can be substantiated and supported by official police reports which document the actual event—used to verify an event happened and also to assist them in future subrogation avenues they may pursue. It is absolutely critical that a police report be filed in claims involving theft and/or vandalism. Should you discover additional items that weren’t listed, be sure to update the police report and tell the insurance company you have filed a supplemental police report. With respect to ownership and value, insurance companies rely heavily on documentation provided by the policyholder to prove ownership and substantiate value. This documentation could take the form of video, pictures, receipts, credit card statements, appraisals, insurance policy endorsements, etc.
Third party appraisals will be required for scheduled items (such as jewelry, art, musical instruments, etc.) and a limit will be set as to the maximum amount you will be paid in the event of a theft. Because appraisals can be subjective, you may want to ask your insurance carrier to give you the name of the company they use or will use if a loss occurs and go to that firm to get your appraisal for the scheduled items. Also be sure to keep the appraisal up to date as outlined in your policy.
Third party appraisals will be required for scheduled items (such as jewelry, art, musical instruments, etc.) and a limit will be set as to the maximum amount you will be paid in the event of a theft. Because appraisals can be subjective, you may want to ask your insurance carrier to give you the name of the company they use or will use if a loss occurs and go to that firm to get your appraisal for the scheduled items. Also be sure to keep the appraisal up to date as outlined in your policy.
Loss By Collapse
Collapse insurance claims are extremely difficult to settle on your own, and waiting for a collapse to happen is risky and dangerous. Why are building collapse claims so complex? In the past, building collapses were broadly covered by most insurance policies but insurance companies have changed how they define “collapse” in recent years. Additionally, the cause of the collapse may determine whether or not the loss is covered by insurance. If the collapse claim is denied, other portions of the insurance policy may provide coverage for the loss. These claims often require the expertise of structural engineers and other loss consultants to substantiate the cause and extent of the collapse.
Recent additions to the insurance form employed by most insurance policies now limit collapse coverage to an “abrupt collapse” meaning a “rapid falling down or collapse of the building or any section of your building resulting in the structure or part of the building not being able to be used for its intended purposes.” A “loss of revenue by collapse” occurs when either a full building, or a portion of the building, suddenly falls down and/or caves in. This sudden collapse can cause destruction of personal belongings and/or property, and could put the building’s occupants in danger.
Sinkhole
Sinkhole coverage usually costs extra and must be chosen by the policyholder. It is very important for a policyholder to understand both their options for sinkhole repair under their policy and the various players in the sinkhole repair process in order to obtain a fair settlement and permanent fix. If not handled properly, it can affect the value of and further risk to both you and your property. Some states, like Florida, are prone to sinkhole development because they are underlain by limestone or dolomite, which is susceptible to dissolution by naturally flowing groundwater. Over time this forms underground channels, voids and cavities in the limestone or dolomite. Sinkholes form with the eventual collapse of the overlying soils down into the channels, voids and cavities below. Sinkholes may appear as a slight depression in a lawn, a leaning tree or fence post, or revealed suddenly as they swallow sections of major roadways or buildings. Different states have varying statutory regulation of sinkholes and sinkhole related damages.
Sinkhole Failed Repair
Did your sinkhole repair work? Did you follow your insurance company’s forced repair protocol? Did you GROUT? If so, the odds are it did absolutely nothing to compact the soil, let alone stabilize your foundation. Why? Simply because compaction grout tends NOT to do what the geotechnical engineer guessed that it would.
Your insurance policy should cover not only stabilizing the land beneath, BUT to also stabilize the foundation. If you experienced this shortcoming, the good news is you may be entitled to have your insurance company pay for the repairs by reopening the initial claim for additional repairs—or in some instances, you may need to file a new claim for sinkhole damages.
Explosion
Most explosions occur away from your property, but the cause of damage transpires in a variety of ways; expanding pressure, flying debris or other airborne material such as gas, liquid or solid matter. Each of these means can cause damage to your roof, structure, detached garage, storage shed, shatter windows or even knock down power lines and trees you may have on your property.
Aircraft / Marine
Aircraft and marine coverage have their own policy language and are normally quite involved. Usually one can obtain coverage for model or hobby aircrafts as long as they are not designed to carry people or cargo. Marine coverage, also known as Inland Marine insurance, normally covers material, products or equipment associated with transportation or communication and can also include someone else’s belongings stored at your property.
