The last earthquake that devastated businesses on the West Coast was the 6.0-magnitude earthquake that hit Napa Valley in 2014. The total cost of damage in the southern Napa Valley and Vallejo areas was estimated at $362 million a few days after the earthquake, with vineyards and businesses on their own suffering between $80 and $100 million in damage.
Many businesses don’t realize they aren’t adequately covered by their earthquake policy until it’s too late. Owners of businesses outside of California tend to believe they aren’t as at risk for earthquake damage, but FEMA’s Earthquake Hazard Maps tell a different story. On the West Coast in particular, strong seismic activity occurs all the way to the Northernmost region of Washington state.
When purchasing earthquake insurance, there are a few things that business owners should keep in mind, such as:
1. Your location and building type.
Commercial earthquake insurance premiums can vary widely depending on the location of the business and the type of building. Additionally, a commercial building may need to undergo an inspection and possibly structural upgrades before qualifying for earthquake insurance.
2. What you need to have insured.
Earthquake insurance is essential for helping businesses recover after a major earthquake, but it’s important to take into account the businesses needs before you decide on coverage. The type of business as well as amount of inventory and machinery owned are important things to consider. Additionally, non-physical losses like interruption of business should be taken into account too. Any expenses that were not considered when the policy was written would have to be paid out of pocket and would not count towards the deductible, which also needs to be paid out of pocket before insurance benefits would kick in.
3. What isn’t covered.
There are a few things that are specifically excluded from commercial earthquake coverage that may lead the purchaser to believe that it isn’t worth it to purchase this type of coverage. However, the reason for the exclusion is usually because it’s already covered under a different type of policy. For example, fire is excluded from earthquake coverage, but would be covered by commercial property insurance, even if an earthquake triggered the fire. Vehicles damaged in an earthquake would be excluded, but business owners should ask their agent to confirm whether or not their commercial auto insurance policy includes earthquake coverage.
Earthquakes can happen anytime and anywhere. Unlike other disasters, they occur most often without any warning at all. That’s why it’s important to be proactive and protect your business from the devastating financial loss of a major earthquake with a comprehensive commercial earthquake policy.
About The Insurance Store
The Insurance Store was created to bring ease and agility to Surplus Lines coverage placement for agents serving commercial and personal lines clients in specific regions throughout the country. We provide a wide variety of packages for hard-to-place products and risks that include earthquakes, floods, hail, and more. To learn more about how we can protect you in the event of an unforeseen event, contact us today at (425) 313-9605.
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