Does Commercial Insurance Cover Severe Weather and Natural Disasters?

| 2023.12.26
Does commercial insurance cover severe weather and natural disasters?

Commercial insurance, just like home insurance, is a must-have in this day and age. Also commonly known as business insurance, it prevents a significant monetary loss from property damage, business interruption, professional liability, commercial auto, cyber liability, and other insurance perils.

Commercial properties and businesses can suffer losses due to natural disasters and severe weather conditions. It’s important for business owners to have commercial insurance that covers these perils to protect their assets and ensure business continuity.

Before discussing commercial insurance coverage for severe weather and natural disasters, below are some basic explanations of common terms used with the different commercial/business insurances.

Types of Commercial Insurance

Broadly, commercial or business insurance comes in the following forms:

Commercial Property

This type of insurance protects your business’s physical assets, such as computers and electronics, equipment, fencing, landscaping, customer property, employee’s personal property, office furniture, and more. These can be damaged in cases of severe weather events or even vandalism.

Business Interruption

Business Interruption insurance generally comes as an add-on to a standard commercial insurance policy.

It compensates for the time a business has been down or non-operational due to an insured peril. The amount of financial support provided is based on lost income during the time the business was unable to operate.

Commercial Vehicle Insurance

As a business owner, you can get additional commercial vehicle coverage for your fleet of vehicles. Whenever an employee uses a company vehicle, potential risks can arise for which you, as a business owner, will be responsible.

Professional Liability

Professional liability covers those who earn money from professional services or advice. It is also called errors and omissions insurance. It covers claims of financial loss or bodily injury attributed to professional negligence.

Examples include providing professional advice that results in a loss to the business, an injury caused by one of your employees, or a person in crisis harming themselves or their family after speaking with a trained psychologist employed by your company.

Cyber Insurance

This type of coverage helps against cyberattacks and data breaches, which have become quite frequent in the modern age.

It can protect against data confidentiality breaches, cyber extortion, and technical disruptions. Furthermore, it covers legal and civil damages costs, forensic investigation, program and data restoration, and more.

Coverage for Natural Disasters and Severe Weather

Damage from a natural disaster or severe weather conditions can affect a property and result in a loss in revenue.

If a commercial property is damaged or disrupted by a natural disaster, extreme weather conditions, or any unexpected event, commercial insurance will provide some form of coverage.

Insurance policies do cover for natural disasters such as fires, including wildfire, wind-related weather including storms, tornadoes and hail. However, a standard business insurance policy does not cover natural disasters like earthquakes and/or floods.

Commercial insurance providers offer the ability to customize the policy per your business needs. If the kind of coverage included in the standard policy is insufficient for your business, you can add more protection that will increase your premium and give you peace of mind.

Your standard commercial insurance policy may not cover earthquakes and the damage they cause. If you run a business in an earthquake-prone region, speak with your insurance provider about earthquake coverage.

In floods, most commercial insurance providers exclude damage caused by flooding, however it may be added to the coverage. This coverage is necessary if your business is located in a flood zone. Even if the business is not located in a susceptible region, you should consider getting flood insurance, as flash floods can still occur and cause significant damage to your operations.

It could be flooding from rainfall, broken dams, or even a building development that alters the path of water flowing into the area. Flood insurance covers damage caused to the building and the assets inside. The details about these assets should be discussed with your insurance provider.

As a business owner, you can take preventive measures like ensuring your business is covered for unexpected events. Evaluate the different insurance policies until you find the best one for your company. Educate your employees on the best safety practices and what to do in emergencies.

Having a survival kit readily available can sometimes prevent significant injuries. As for electronic data, it should be regularly backed up, and contingency measures should be put in place in case there is a breach.

Does Commercial Insurance Cover Severe Weather and Natural Disasters: Final Thoughts

Typical commercial insurance does provide coverage for most weather related events under your commercial policy with the exception of earthquake and flood. These can be added to your policy in most cases.

At MMI Insurance, we provide customizable coverage that understands the needs of a particular business. We spend time getting to know our clients so that both parties can make an informed decision about the policy’s requirements.

For more information about commercial insurance and coverage for severe weather, call MMI Insurance at 1-866-222-6996 or contact us here.

Coverage is subject to policy wording, terms, conditions, and deductibles. Protection is limited to the perils, coverage, exclusions, and limits shown on the policy.