With the recent earthquake in Haiti and hurricane in New Orleans, man and beast are both keenly aware that disasters can and will happen. And when they hit, they can wreak havoc on residential and commercial property. Not to mention doghouses. They are always the first to go.
So, in light of the Haitian earthquake and Hurricane Katrina, take time to review your disaster-related evacuation planning and tenant safety issues. And then, review and evaluate your insurance policy to make sure you have adequate coverage. I often hear humans groan about paying high insurance premiums. But when something unexpected occurs, they are happy to have insurance. So, paying for coverage beats the alternative of facing an uninsured disaster that could literally ruin your business as well as your reputation. I looked into doghouse insurance. But the agent doesn’t return my calls.
The primary type of insurance for commercial property owners is commercial property insurance which covers the physical structure from various types of natural or manmade disasters. Here are some tips for choosing or renewing property insurance coverage:
- Make sure your building is current with regard to all safety codes before you apply for new coverage or try to renew an existing policy. If the insurance agent who reviews your property finds evidence of safety violations, he or she might fail to recommend the property to underwriters. (From what I understand, those are the folks who review the paperwork and decide whether people are eligible for insurance.)
- Remember that insurance companies are not code enforcers. Their concern is for the building and the potential loss of value. Ensuring the safety of tenants is a shared responsibility between the building owner/manager, the tenant/employers and every individual person in the building. There is a proven correlation between individual training and preparedness and life safety
- Find out if the policy provides reimbursement for alternative work accommodations. If your building is severely damaged, would you be able to offer temporary facilities for displaced workers? I’d offer to put them up in my backyard. But I don’t think they would all fit. Remember that securing building permits for repairs can take weeks or months. So make sure that your insurance is sufficient to cover construction and code-approval time.
- Carefully review whether the policy allows for “actual cash value” or “replacement value?” Actual cash value factors in depreciation of the insured object, while replacement value reimburses policy-holders for the current cost of replacing the lost or damaged item.
- Watch out for exclusions, which are big in the world of insurance. Check the policy carefully for anything that might not be covered. Are you in a flood plain? If so, make sure flood-related disasters are covered. Vandalism coverage should also be considered since manmade damage can lead to costly repairs. Some policies cover every type of disaster. In other cases, you might find it necessary to add a la carte coverage.
- Look at what the policy covers beyond the building. Are furniture, equipment and electronics included? All of these items can be costly to repair or replace. (I thought the kitchen table should have covered JR’s chewing, but apparently not.)
- Make sure you take time to read the fine print in your property insurance coverage. The fine print on my bag of food says I should get only 2 cups a day. What size of dog can subsist on that paltry quantity of food? Proper coverage today can save your business tomorrow.
- Consider other types of insurance such worker’s compensation, liability, and vehicle coverage. Insurance is such a comprehensive subject that we’ll cover more about it in future blog posts. So be sure to check back in the weeks ahead.
For the latest emergency management training for property owners and facility/building managers, contact RJ Westmore, Inc. Our e-based system offers the best emergency training available, with automated and integrated features. Visit RJWestmore.com for more information and remember to BE SAFE.