For commercial insureds, hurricane season is about preparedness and ensuring the right coverage is in place before the storm hits.

Jonathan McDaniel, area vice president at RPS, explains why agents must treat each hurricane season as a critical opportunity to review coverage, educate clients and prevent costly underinsurance gaps.

The Foundation: Wind and Flood Coverage

Hurricane losses often involve multiple perils, including wind, rising water and storm surge, and many commercial property policies exclude one or more of these exposures. Agents should confirm whether clients have stand-alone flood policies and that wind is explicitly included in their property insurance program.

"The most basic starting point is ensuring clients have wind coverage," McDaniel says. "If a hurricane blows through without wind coverage, they will be uninsured."

In addition, flooding from rising water isn't covered under most commercial property policies.

"Whether or not clients are in a high-risk flood zone, businesses still need separate flood coverage to be protected," explains McDaniel.

What's Covered When a Hurricane Hits?

Even with wind and flood coverage in place, not all policies respond equally. Agents should guide clients through the details of:

  • Structure coverage (replacement cost vs. actual cash value)
  • Business personal property
  • Debris removal (not always included)
  • Ordinance or law coverage (essential for older buildings)
  • Business interruption and extra expense

"Some policies include ordinance or law coverage with predetermined limits, but it's often overlooked," McDaniel notes. "That can be a huge issue if building code changes require rebuilding a structure differently after a loss."

McDaniel also urges agents to review the following optional-but-critical endorsements to protect their clients' businesses:

  • Off-premises power outage: If a storm causes an issue with utility infrastructure not directly on your property, food spoilage and revenue loss might not be covered unless this endorsement is in place.
  • Food spoilage: This coverage is often limited to a small sublimit unless specifically increased.
  • Pumps, canopy and signage coverage: These common exposures for gas stations, car dealerships and retail businesses should be addressed.
  • Glass coverage: This coverage is especially relevant for businesses with large storefront windows.

Review Policies for Adequate Property Values

"Policies that have been on the books for five or 10 years may not reflect today's replacement costs," says McDaniel.

That said, agents should revisit total insurable values with clients to ensure limits are adequate. Underinsurance can trigger coinsurance penalties, leaving policyholders responsible for a significant portion of their losses.

Act Before a Storm Approaches

Once a storm is named and approaches a region, most insurance carriers suspend binding authority. Waiting until a storm is near to request changes or add coverage will almost always be too late to get the insurance necessary to transfer risk.

Risk Management Reminders for Clients

McDaniel recommends that agents add value by sending pre-storm checklists to clients with the following reminders:

  • Ensure you have a physical and digital copy of your policy.
  • Know the carrier's claim reporting contact information.
  • Once damage occurs, contact your agent immediately. Don't wait.
  • Avoid unlicensed contractors and fraudulent mitigation vendors.
  • Call your agent before signing with a remediation company, especially for water mitigation, which can run into thousands of dollars and may not be covered if improperly triggered.

Discussing all of the above with clients before landfall is vital to ensuring they're risk-ready.

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