You purchase insurance to help protect your business now and in the future. But do you have all the coverage options you need? Some business insurance plans leave out one important component: Costs related to the interruption of your business.
What happens if the basic utilities you need to stay in operation—water, power, and communication—are lost for an extended amount of time through no fault of your own? Any downtime costs you time, money, and customers.
Utility service interruption insurance can help protect you, but it isn’t included with most business insurance policies. And most policies won’t cover utility interruptions that don’t originate from your business.
One solution is to have utility service interruption coverage as part of your policy. This coverage is usually offered as endorsement on an existing policy and covers losses caused by damage to property that isn’t on your premises (e.g., a tornado knocks out a transmission station that supplies power to your business).
What utility services are covered under this endorsement varies by insurance company, but there are two main coverages within:
- Direct damage: This covers damages incurred directly to your business due to a utility issue, such as if a storm causes a power outage, a well pump can’t operate to provide water for growing crops. The lost plants damaged due to lack of water would be covered.
- Time element: This coverage is an extension of standard business interruption coverage and includes the interruption of utility services.
You often need to have other coverages in place before you can have direct damage or time element coverages for your business. Be sure to have a conversation with your agent to review your policy and see what’s already in place.
Being prepared for the unexpected is all part of the job of a business owner. But you don’t have to forge ahead alone. Ask questions and know what options are available to you.
At Hortica, we want to help protect your business, and we offer utility service interruption endorsements. We can walk through your current policy and identify types of coverages that fit your business. Give us a call.
For more information on safety preparation for your business, check out the Hortica Resources section.
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