The Reschini Blog: Know What Your Equipment Is Worth

“Catastrophe” in the property insurance industry denotes a severe natural or man-made disaster that is unusually severe.  In the insurance industry, an event is designated a catastrophe when claims reach at least $25 million.

But an event doesn’t have to be technically classified as a catastrophe for it to feel like one, when you suffer damage to your property and equipment.  That’s why it’s always imperative to know the value of what you own long before it is ever damaged or lost.

Conducting an industrial appraisal remains a vital piece of the process in securing the proper level of insurance coverage.  Establishing a fair and accurate “insured-to-value” ratio can spell the difference between an effective and orderly restoration of operations following an event, and being left with unanticipated expenses and follow-up claim resolution issues.

Commercial property insurance policies generally cover the same causes of loss as most homeowners policies (damage from fire, windstorm, hail, riots, explosions) with some variation, depending on the coverages selected. Flood and earthquake damage are typically excluded.

To put that into perspective, the Insurance Information Institute says that in the U.S. from 1997 to 2016, events involving tornadoes, including other wind, hail and flood losses associated with tornadoes made up 39.9 percent of total catastrophe insured losses, adjusted for inflation. Hurricanes and tropical storms were a close second at 38.2 percent of losses, followed by other wind/hail/flood (7.1 percent) and winter storms (6.7 percent). Terrorism and fires, including wildland fires, accounted for 5.9 percent and 2.0 percent of catastrophe losses, respectively. Civil disorders, water damage and utility services disruption combined represented about 0.2 percent of losses.

The world – both from its natural dangers and those generated by people – can be a dangerous, hazardous place.  Your equipment and property is always vulnerable to damage and loss. The Reschini Group can provide rough estimates on building valuations, locate experts in the appraisal arena, and secure the best possible coverage solutions.

Because an event doesn’t have to fit the description of a catastrophe for it to feel like one, when it happens to you.  Contact the professionals at The Reschini Group to learn more.

Copyright 2021 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.


Life Happens: Business Interruption Coverage

When one thinks of “standard” insurance, it’s for damage or loss of property.  Furniture destroyed by a fire, stolen equipment, building damage from a violent storm.  You buy this insurance to help recoup the cost of rebuilding or replacing that property, right?

But life happens.  The unexpected arrives with unexpected consequences.  Such as, losses resulting from a business not being able to operate due to property damage.  That’s a different level of coverage know as business interruption, or business income, insurance.

When a business is shut down due to a damaging event, revenue slows down or ceases entirely.  But, at the same time, the financial obligations of the business continue as before, plus any additional expenses as a result of the disruption.  With business interruption coverage, many of these costs and losses can be reimbursed. According to the Insurance Information Institute, business interruption insurance will cover: revenue lost due to the closure; fixed expenses, such as rent and utility costs; and expenses of operating from a temporary location.

Determining a business interruption loss involves establishing what the business would have earned had the loss not occurred.  Insurance companies take into account past tax returns, profit and loss statements, projected sales and non-continuing expenses.  Business interruption coverage is not sold as a stand-alone policy. It can be obtained as part of the following types of policies:

  • Commercial property insurance—You can add an endorsement or rider to commercial property insurance that will extend the policy’s coverage to business interruption losses.
  • Business owners policy (BOP)—Intended for small businesses, this type of insurance package policy includes property, liability and business interruption coverage.
  • Commercial package policy (CPP)—CPPs are flexible policies that can be customized with a range of options, including business interruption coverage.

Time limits apply to business interruption coverage, so be sure to discuss limitations and exceptions with your insurer or insurance professional, and whether purchasing extended business income coverage is a good option for your business.  The professionals at The Reschini Group are experts in these options, and can help you determine the right business interruption coverage for your unique situation.

Copyright 2018 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.