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.

4 Tips for Preventing Small Business Insurance Claims

 

Small business owners are responsible for many things geared toward making their business a success and, as a small business owner, you're responsible not only for increased sales and cost reductions but also for managing risk.  A big part of managing risk is to be covered by a comprehensive small business insurance policy that protects you from suffering a variety of losses, one of which may be liability lawsuits.

Your Greensboro small business insurance policy is absolutely something you want to have but also something you never want to have to use.  Without proper protection, however, a serious claim against your business could essentially close down your complete operation.  But smaller claims such as those for a slip and small injury, which is one of the most common, or theft of merchandise or equipment, are not only troublesome but can cost you money in the form of higher premiums.

Tips for Preventing Small Business Insurance Claims

Here are some things you can use to help prevent small business insurance claims:

1. Burglary and theft are the most frequent causes of property loss claims submitted by small businesses, accounting for about 20% of all claims filed.  The best way to mitigate these losses is to introduce some simple security measures such as sturdy locks for all doors and windows and also for any sensitive areas.  High-quality electronic surveillance equipment can be used to guard your business both during and after business hours.  If your employees make bank deposits, it's a good idea to incorporate the buddy system.  Employee dishonesty can be countered by providing a good working environment and fostering high employee morale.
2. Slip-and-Fall Injuries are some of the most common injuries for which claims are made against small businesses.  The more foot traffic your business has, the more vulnerable you are to facing this liability claim.  Good housekeeping is a primary factor in avoiding these injuries.  Inspect for and repair any loose steps or handrails.  Slippery floors should be well marked and any clutter should be avoided.
3. Other injuries caused by unstable product displays or heavy goods falling from high shelves may be alleviated by regular inspections to prevent these problems.
4. Businesses that use vehicles as part of doing business can be held liable if one of these vehicles becomes the cause of an injury or property damage.  Only qualified persons should operate these vehicles and regular driver training should be provided.  

What Is a Certificate of Insurance?

A Certificate of Insurance, or COI, is a document issued by your insurance company to provide proof of insurance coverage. A COI not only verifies the existence of current insurance coverage but also recaps the basic conditions and key aspects of the policy. A standard Certificate of Insurance includes these details:

• Policyholders name
• Policy's effective dates
• Type of coverage
• Policy limits

Who Needs to Have a Certificate of Insurance?

A COI is similar to a Proof of Insurance card for your vehicle – something you may be required to produce if you're ever pulled over by the police or involved in a car accident. A COI is something you'll want to have on hand if you're involved in a business that provides a service or performs work where there's a potential for being held liable.

In reality, every business out there needs to have business insurance in place, especially liability coverage, but not every business owner will be called on to produce their COI as proof of their insurance coverage.

More likely, companies that do jobs outside of their office should have a COI on hand, ready to show to a customer hiring them or considering having them do some work. If, for example, you're hiring a local company to reroof your home or to build a backyard fence, you want to know they have the ability to cover the cost of a liability claim.

Anyone you hire to do work where someone could get injured or lose money should be insured, and asking for a look at their COI will be evidence of said insurance. If they can't produce this proof of insurance, you may be better off hiring someone who can.

A contractor undertaking a significant job should have a current COI, and any subcontractors hired for the job should also be able to produce proof of insurance.

Reasons Why Certificates of Insurance are Important

• A COI summarizes your insurance status on one simple form, without the need to produce an entire insurance policy. Often, companies seeking bids will require one as part of the bidding package.
• Carefully documenting the insurance coverage of your subcontractors and third-party vendors covers your need of having essential insurance coverage to protect yourself in the event that something goes wrong.
• A COI is a convenient way of proving you're insured and can save you time and trouble when seeking jobs.

7 Common Business Insurance Claims

Whatever type of business you're in, one undisputed necessity in running a successful business in Greensboro is the protection provided by quality Greensboro business insurance. When business owners purchase a business insurance policy it's likely not in anticipation of suffering a loss that may occur in the daily running of a business, but more for some catastrophic event such as a fire that will totally devastate their business.

While it's true these types of disasters should be properly protected against with quality insurance coverage, there are numerous smaller risks that businesses face in their day to day activities. It may surprise you to learn what types of losses are most prevalent to most businesses on a regular basis, especially smaller businesses.

The Most Common Business Insurance Claims

A nationally recognized property insurer conducted a study in 2015 consisting of a compilation of claims information submitted by more than one million small business policyholders over a five-year period of time. According to this study, it was estimated that approximately 40% of all small businesses will experience some type of loss, either liability or property, within a 10-year period.

Following are the most common types of claims submitted by small businesses:

1. Burglary/Theft – making up a full 20% of annual business insurance claims, burglaries and thefts may be perpetrated by dishonest employees or by outsiders. These claims include not only the cost of lost products and merchandise, but also the cost of damages suffered by break-ins.
2. Water and Freezing Water Damage – accounting for about 15% of annual business insurance claims, these claims may involve roof damage, broken water pipes or a leaking appliance such as the water heater.
3. Wind/Hail Damage – accounting for another 15% of claims, wind and hail damage can affect your structure, out buildings, automobiles and outside equipment.
4. Fire – causing about 10% of business claims, fire damage can be considerably destructive and expensive to remedy.
5. Slip and Fall Injuries – making up about 10% of business insurance claims, add to this another 5% for injuries caused by something other than a slip and fall such as a heavy object falling off a shelf and hitting someone's head.
6. Reputational Harm – your Greensboro business insurance policy covers you against slander and libel claimed by a third party as damaging to their reputation.
7. Product Liability – representing less than 5% of claims, these claims can be extremely expensive.