What if my business suffers damage from a storm or flood?
Take these three steps if your business location suffers damage from a storm or flood.
Many Coral Springs businesses suffered flood damage during the hurricane season. In September 2017, Hurricane Irma passed near us, but we managed to dodge the more severe hurricanes this year. Most Coral Springs businesses suffered a minor interruption, losing power for a few days. Some businesses did suffer damage from the wind and rain. It is not uncommon for businesses in Florida to suffer great losses from hurricanes and flood damage.
There are a few steps that businesses can do after suffering damage from flooding and storms.
Review your insurance policy for exclusions or higher deductibles
Most insurance policies have a special provision for hurricanes or for flood damage.
Some policies covering businesses or commercial property may exclude coverage altogether, meaning that the insurance company will not cover the damage. In many policies, a higher deductible applies, requiring the business owner to pay more of the losses out of pocket.
However, even if a policy has an exclusion for hurricane or flood damage, the exclusion or deductible might not have been triggered. There is a major difference between a hurricane and a major windstorm, legally speaking. If the damage occurred before or after the storm was considered a hurricane then the deductible or exclusion might not apply.
Even if the storm was considered a hurricane for several days while it was off the Florida coast, if the storm was reduced to a tropical storm before it reached the country where your business was located, the deductible or exclusion might not apply. The Florida insurance commissioner issues statements regarding when a hurricane officially hit each county.
The same legal arguments may help to recover damage from flooding. If a policy excludes damage caused by water, perhaps you can prove that your damage was caused by something else, such as extremely cold temperatures, or a wind storm.
Take an inventory of what the storm or flood damaged, so you can prove your insurance claim
After suffering a major loss, particularly if the loss is water damage or fire damage, most people focus on cleaning up and moving forward. However, to recover on your insurance policy you will need to create a detailed list of your losses. The insurance company will send out an adjuster to review the damage, but the adjuster has no idea what the property looked like before the damage occurred. All businesses should maintain an inventory of all property. That way if the property is damaged, you can prove to the insurance company what was lost.
After the damage has occurred, take a new inventory of what was damaged. Of course, photographs taken shortly after the damage has occurred are very helpful in proving what was damaged by the flood or storm. You should maintain current photographs of the building, equipment, inventory, and other business property, so you can demonstrate the full extent of the loss to the insurance adjuster after the damage occurs.
Consult an attorney if the insurance company denies your claim
When an insurance company believes that the claim should be denied, they are required to send you a letter explaining their position. The insurance company will send you a denial letter even if they are accepting part of a claim and denying part of it. They may also send you a “reservation of rights” letter stating that they may deny all or part of the claim letter, after completing their investigation. The insurance company is required to provide their specific reasons that they believe your claim falls within an exclusion. For example, the letter may state that the claim is excluded from coverage under the hurricane exclusion because your damage was caused by Hurricane Irma. You don’t have to accept their position. If you believe the damage should be covered you can respond to the insurance company’s letter.
Challenging the insurance company’s denial letter or reservation of rights letter requires an understanding of insurance law, and it is important to consult an attorney with experience in insurance coverage disputes.
If your business suffered significant damage from a storm or flood, you should speak with an attorney regarding your rights to recover under an insurance policy. With more than fourteen years representing businesses in Coral Springs and Parkland, Matthew Fornaro is prepared to help you recover money and restore your business to successful operations. Contact us today.