Should You Include Insurance Coverage for Water Damage in Your Business Policy?

6/25/2020 (Permalink)

Choosing appropriate coverage for your business or commercial property can be hard. There are so many things that could happen, what is most relevant to your situation? There are a few business claim constants, and one of them is water.

A Common Problem

Water damage can happen to anyone, anywhere. There are many different sources: flooding, storms, plumbing issues or sewer backups. What does this mean for an owner of commercial property? 

The average water and freezing damage claim cost is $17,000.

It is the second most common insurance claim for a commercial property to make, right under burglary and theft. 

It can be exacerbated by geography- certain areas are more prone to severe weather patterns than others, including harsh freezes and hurricanes.

Not Always Covered

A typical business insurance policy might not have specified coverage for water damage, although you may be able to make a business claim under an "all perils" plan. So, this means that your coverage will depend on your situation. If your water damage is a result of an issue that is easily avoided with routine maintenance, it will probably not be covered. If it is sudden and could not have been prevented, it probably will be covered. However, there are add-ons for specific situations, also known as riders, that you can ask for in your policy.

Preventable

Proper care can go a long way for reducing the likelihood of water damage coming from your plumbing. Freezing is a big cause of pipe break, so be sure to insulate any exposed pipes and maintain a temperature of at least 55 degrees Fahrenheit at all times. Have your drains regularly inspected and check for leaks often. Just in case, find a reliable water damage remediation company to respond should the need arise.

When looking at the history of commercial insurance and the typical business claim of commercial properties, it becomes clear where your priorities should lie. Water is present both inside and outside almost every building, so be prepared for what it can do.