The first five years of the 21st century have been marred by enormous amounts of property damage from natural causes - tornadoes in the Midwest; hurricanes in the Southeast; fires, landslides and earthquake rumblings in the West; and drenching rain and flooding in the Northeast.
A U.S. Department of Commerce estimate of damage caused solely by Hurricane Katrina underscored the magnitude of these financial losses. The report stated that insurance payments would be in many billions of dollars; property losses not covered by insurance were estimated to be more than those insured.
Underinsurance has been confirmed as a major problem for owners of both commercial buildings and dwellings in the wake of recent hurricanes, tornadoes, earthquakes, out-of-control fires in dry areas, and flooding. Although coverage requirements by banks and other lenders assure the existence of property coverage, it does not always assure replacement cost limits. When a mortgage is paid off, the need for ongoing attention to appropriate insurance becomes even more significant.
The adjustment process has revealed dwelling coverage limits below the usual 80% requirement for replacement cost and commercial building limits not written to meet the applicable coinsurance limit. Rebuilding costs following future storms and other catastrophes will reflect sharp increases in the price of building materials, labor, and new construction standards required by strengthened building codes. Insurance limits must keep pace with these costs of rebuilding.
Commercial buildings and contents are subject to virtually the same exposures and coverage considerations as dwelling buildings and their contents, with several important options. Recent catastrophes have made it clear that many small businesses have not carried loss of earnings (business interruption) insurance. Without continuing income, they are unable to survive. Employees are lost when the downtime appears to have no end. Rebuilding is delayed when a small number of contractors are sought by the many who need them. A business owners policy is the answer for many eligible small businesses because it includes coverage for loss of earnings due to an insured hazard on an "actual loss sustained" basis.
Accounts receivable insurance has proved to be of great value for those who do extensive business on a credit basis. Valuable papers coverage is of equal importance. It can make a big difference to many professionals such as pharmacists, accountants, attorneys, physicians and hospitals. The protection includes the expense of reconstructing records as well as covering financial loss.
Despite continuous public advertising efforts by the National Flood Insurance Program and coverage explanation by insurers, agents and brokers, many people who needed flood insurance did not have it when their property was damaged or destroyed by flooding. Flooding caused by rising groundwater is not covered by the homeowners policies and commercial property policies carried by most insureds.
Protect Your Business With Public and Product Liability Insurance Vacant Property Insurance Contract Surety Bonds Modern Insurance Tips A Guide to Getting the Best Business Liability Insurance Quote
0 comments:
Post a Comment