One of the major issues with some insurance companies is the ambiguity in their policies.
For example, a policy that covers wind damage, but not flood damage, becomes problematic in the event of a hurricane. In these types of policies, the anti-concurrent clause states that coverage for damages caused by concurrent wind, flood, and storm surge events are not covered.
When you don’t understanding the impact of different coverages or the duties of your Insurance Retail Agent, your business can suffer.
Major natural disaster events like hurricanes create devastating destructive forces caused by concurrent wind, flood, and storm surge. On August 25, 2017, Houston, the fourth largest city in the country, experienced the destructive impact of Hurricane Harvey, a Category 4 storm. It caused $125 billion in damage, according to the National Hurricane Center. Harvey made landfall three times in six days. At its peak on September 1, 2017, one-third of Houston was underwater. Two feet of rain fell in the first 24 hours. Flooding forced 39,000 people out of their homes and into shelters. Hurricane Harvey damaged 204,000 homes (three-fourths were outside of the 100-year flood plain); and most of those homeowners did not have flood insurance. Many businesses also did not have proper flood insurance coverage.
How do you best protect your business to ensure that the correct coverage is in place?
The most important task is to make sure you have a knowledgeable retail Insurance Agent. Better yet, hire a Risk Manager, trained to provide you with the correct coverage to protect your business. The Risk Manager has to notify you in writing that your coverage is different from what you expected or ordered. If they fail to provide the required written notice, it is a breach of their duty.
If a devastating event does occur to your business, keep detailed records of the type and amount of damage, make a note of the wind strength or water levels, and anything else that might be relevant. Photographs and videos are also helpful to document the damage, as well as a timeline of when the damage occured. After a natural disaster, you must make sure that your claim is filed in such a way to maximize the insurance coverage available. If the policy in place at the time of the event contains an anti-concurrent clause, this step will determine how much is covered and eventually paid.
To ensure that your business is adequately protected from natural disasters, the advice of an experienced retail insurance agent, or better yet, a Risk Manager, is key. Educate yourself on the different types of coverages and the impact of the anti-concurrent clause. When you are about to buy or renew coverage, sit down with your Risk Manager and make sure you understand what could happen in the case of a hurricane or other major natural disaster. Then take the necessary steps to protect your business.
When a disaster does occur, keep detailed records and document the damage. Detailed records become important during the claims process and will ensure that the insurance company pays what is owed. Hire a Claims Specialist to present your claim in the manner that will produce the best result for your company. Preparation for yourself and your business is the key to success. When you are proactive and knowledgeable about the different types of coverage available, and you hire an expert in the insurance field, your business has a much higher probability of being protected.