Does Business Equipment Insurance Cover Burst Pipes?

 

A good commercial property insurance policy can be comprised of many different types of insurance protection, many of which most businesses need.  Damage caused by leaking or burst water pipes is included in the coverage provided by many commercial property insurance policies, but check your policy to make sure.  Each business policy written is unique and available protections must be spelled out in the policy contract.

Business Owner Policy

A Business Owner Policy, or BOP, is a combination of insurance coverages providing protection for many of the liability and property risks a business owner faces, bundled together in one package.  While a BOP provides a bundle of basic insurance coverages most business owners need, it's sold at a discount from what the individual protections would normally cost. 

Typically, a BOP provides protection against losses stemming from:

• Property damage
• Liability
• Business Interruption

Businesses can also usually opt to add on additional coverages not provided by a basic policy.

Water Damage

While water damage from something like a burst pipe is likely covered by your commercial business property insurance policy, not all water damage to which your business may be subject is necessarily covered.  Flood damage, for example, is something that could possibly require coverage by a separate flood policy or special endorsement to your base policy.  It's also important to realize that if your water pipe bursts because your property was left unheated during a winter freeze your claim could be denied due to neglect.  Water damage caused by an overflowing sump pump will probably not be covered by the property damage portion of you policy.  Check the specifics of your policy.

Other Applicable Coverage

Several types of coverage may apply to damage caused by water from a burst water pipe.  If you have a great deal of expensive equipment used in your business and it gets damaged and requires repair or replacement, the costs may exceed the benefit limits on your property damage coverage.  Additional equipment coverage may be needed to ensure your full protection in the event that property or equipment damage is greater than your base policy can handle.

If water damage sustained requires you to shut down business operations or move them to a temporary location, business insurance can help cover loss of income because of business interruption.  If you're found liable by your landlord for damage done to his or her property a BOP can help there, too.

Small Business Insurance: Top Risks Business Owners Face

Optimism is the fundamental foundation of small businesses just getting started. The entrepreneurial spirit is alive and well in most new business owners, who must think of themselves as optimists if they're to stand a chance at success, yet too much optimism can prove fatal. While a business plan built around the best-case scenario may be tempting to create, any business success must be tempered with the real-world risks that face every small business.

If not properly protected by quality small business insurance, even the most successful small business operation can come crashing down. The results of an uncovered liability or wrongful termination lawsuit can be disastrous to your business. This is why one of the top items on your to-do list when opening a small business should be obtaining the protection that comes with quality small business insurance. Following is a list of some of the top risks a small business owner faces.

1. Property loss is high on the list of risks small business owners face. Typically, your business property represents your largest asset and threats to your property are numerous. Whether it's theft, vandalism, natural disaster or fire, your property is at risk and should be protected against loss. This includes coverage of the real property, on your equipment, fixtures and on stock materials.
2. Libel claims against your small business for wrongdoing or negligence can end up costing millions. Damages that result from physical injury, personal injury such as libel or slander, property damage or advertising injury are all risks that can be covered by obtaining an adequate amount of commercial general liability insurance. This protects you from both real and fraudulent claims as well as the costs incurred in settling these claims.
3. Any small business with employees runs the risk of claims by employees as a result of health and safety obligations. You need insurance protection in case any employee becomes injured or sick as a result of on-the-job accidents. One serious claim against an unprotected small business could put that business out of business.
4. There are other risks small business owners face against which insurance protection is needed. These include environmental exposures, improper employment practices, key person loss, business interruption, management of electronic data and more. Most small business owners aren't aware of all the finer details and the need for so many types of business insurance. Consulting a business insurance professional is the best advice.