Desmond Insurance Blog
A commercial property insurance policy is reliable enough to handle direct loss to a business’s structures, equipment and related property. However, what happens when weather conditions turn mean and cause indirect damage by knocking out utility services?
Property could be harmed by heat-induced transformer breakdowns. This form of power interruption affecting compressors, motors and switches, at a business could result in food spoilage or damage to climate-sensitive property. Equipment damage may also occur due to an accidental, sudden loss of power. Power surges may harm expensive equipment. A commercial property may exclude coverage for loss that involves the failure of utility services. Therefore, a business is vulnerable to utility failure or interruption of any type that occurs away from its business location.
Fortunately, a business may buy additional, optional coverage to protect against utility service-related losses. A company usually has the option to buy the type of coverage it needs, such as services for water, telephone/communications (either including or not including land lines), gas and electric power. Further, a company has the option to protect different classes of property, what business locations to insure, type of property (the firm’s own property and/or property that belongs to others, such as customers), and the sources (perils) of loss covered.
Such coverage forms usually define the utility services, perhaps using language similar to the following:
If your business is concerned about its vulnerability to power-related loss, be sure to check with your insurance professional about this valuable coverage option.