Lykes Insurance Advises on Business Insurance Coverage
FORT MYERS, Fla. – (Jan. 9, 2018) – The 2017 hurricane season just ended recently, and many business owners have realized they hadn’t adequately reviewed and updated their insurance coverage, according to Janet Moore, CPCU, CIC, risk advisor at Lykes Insurance, a premier Florida-based commercial insurance firm.
“Businesses now face more natural and man-made disasters than ever before, complicating the management of their risk and insurance programs,” says Moore. “This requires strategic planning through a business continuity plan, as well as regular reviews of risks and coverage.”
Business interruptions and damage may be caused by a number of known factors such as natural disasters, fire and intruders, but also by new and emerging threats, including cyber threats, terrorism and government shutdown.
Recognizing the increasing scope of business risk, Moore suggests business owners consider the following:
- Business Interruption Insurance: One of the most common questions asked after a natural disaster is “are we covered for loss of income?” As with all insurance policies, there are specific terms and conditions that must be met to determine if coverage applies. With business interruption insurance, coverage is triggered by direct physical damage to property at a covered location caused by a covered peril. Some carriers will also include mandatory evacuations as triggers. This is typically subject to a waiting period (e.g., 72 hours) as a deductible. As with all insurance policies, there are exclusions. In general, standard commercial property insurance does not cover loss due to failure of power or other utility service to the premises if the failure occurs away from the premises, such as from overhead transmission power lines. Optional coverage may be available, usually with a limited benefit amount, such as $25,000 per claim.
- Coverage for Downed Trees and Debris Cleanup: Policy wording in many business property policies provides an extension of coverage for outdoor property, trees and shrubs (not stock), including debris removal, that result from fire, lightning, explosion, riot and aircraft. (Note that wind is NOT a covered peril for outdoor property, so downed trees and their removal are not usually covered under the business policy unless they fall on a covered property and cause damage.)
- Spoilage: Food in freezers and refrigerators, medications and other temperature-sensitive items need to be protected by a special spoilage coverage endorsement.
- Future of Property Rates in Florida: Admitted carriers in Florida must go through the process of rate filings and approval with the Florida Department of Insurance, which will take time, possibly through the end of 2018. Surplus lines (non-admitted) carriers may adjust their rates quicker. In consideration of all the catastrophes in 2017, such as fires in California, earthquakes in Mexico, hurricanes in the U.S. and even a hurricane in Ireland, the claims payouts will be significant. This may drive up the cost of reinsurance and when reinsurance costs increase, admitted markets tighten up on their renewals and rates in the non-admitted market increase.
Each hurricane or other natural disaster is unique. For example, Hurricane Irma affected almost the entire state of Florida with significant wind and water damage.
No one can know when or how future storms will impact them. The beginning of the year is a good time for business owners to identify and evaluate changes to be considered for the future. Your risk advisor can provide options to allow for informed decisions – which you can and should make before the next threat arises.
About Lykes Insurance
Lykes Insurance was founded in 1925 by Lykes Bros. Inc., a 102-year-old privately held Florida-based company. As a premier commercial insurance firm with offices in Tampa, Fort Myers, Winter Park and Sarasota, Lykes Insurance focuses on building long lasting partnerships with companies and individuals, providing protection for businesses, managing risk and designing innovative employee benefit solutions. For more information, please visit www.lykesinsurance.com.
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