On Monday a night, a building I recently blogged about caught fire at 140 Prospect Avenue in Danville. Thankfully the fire was contained quickly, no persons were injured, and was limited to just the front suite of the building. The four other businesses including Wild Vine Hideaway, JuneBug’s Bakery, and two other apparel and accessory stores owned by the victim of Monday night’s fire were unharmed. The fire is being called a “Total Loss”.
A fire or any other event that causes a disruption in business is horrific for any business owner. This made me question my own knowledge of commercial insurance and the importance of being properly protected. I consulted a good friend and Executive Vice President, Jay Fischer, of a local commercial insurance company, One Risk Group, for his insight and advise for business owners when considering their insurance policy.
“When it comes to insurance not all policies are equal. You do not want to wait until there is a fire to realize how you are or are not covered properly. If you believe that all policies are created pretty much the same, you could end up paying dearly. According to a study that will come out early next year by the Chicago Law review, those differences are poorly understood, and wording can be drastically different.
Policy wording could allow the insurance company to deny a claim “to the extent that the policy holder’s negligence contributed to the loss” There can also be wording in the policy that can deny coverage if sprinkler systems to not discharge properly in the event of a fire. These are a couple examples of how the policy wording can be altered in the insurance companies best interest. However, there are many to be aware of. Many of which can be negotiated out by a good broker for little to know charge.
A few tips for buyers
- Use a reputable independent agent/broker with access to a range of insurers and coverage options
- Broker should be a specialist in your industry and be able to pint out coverage options and understand coverage wording
- Ask about exclusions in the policy and wording differences across policies
- Ask how co-insurance penalties could affect them and how it applies
- Ask about Business Interruption coverage is applied and how a limit is determined
- If you have tenants, make sure that you understand what insurance they are carrying and what your lease requires of them. Fire Legal Liability could be an important coverage.”
If you have any questions regarding commercial insurance One Risk Group is an Independent Insurance Broker, providing the Real Estate Industry and others valuable Risk Management advice. You can contact Jay Fischer for an Assessment of your current program 925.226.7353 or firstname.lastname@example.org