As a business owner whose company has incurred damage following a natural disaster, you may file a claim with your insurer believing you know what is covered and what is not.

However, the belief may differ from the reality. Here are four insurance policy problem areas that can affect commercial businesses and tips on how to avoid insurance chaos.

1. Deductibles

There are many sides to deductibles; they can apply to an occurrence or a particular location. There may be many deductibles connected to a devastating event, such as a hurricane, figured either in terms of dollars or as a percentage of value.

2. Service interruption coverage

If disaster strikes and there is a service interruption such as a blackout, the peril that caused the interruption must either be the kind of event that is identified in your coverage or that is not excluded from coverage.

3. Storm surge coverage

You may recall that following Hurricane Katrina and Hurricane Sandy, insurance disputes arose over the meaning of windstorm versus flood. Look into the definitions in your policy. A storm surge is wind-driven water, and it might be important for your policy to include a storm surge clause.

4. Business interruption coverage

Problems frequently arise in settling a claim concerning business interruption. Your policy may replace the profits you lose as the result of a natural disaster, but it will not replace your revenues. You must be clear on coverage. It will involve continuing versus non-continuing expenses, and an indemnity period will likely apply.  

Planning ahead

As a Florida business owner, you have probably developed a crisis management plan for your company. Remember that following a natural disaster such as a hurricane, you want to have the utmost confidence in your insurer. It is vital to understand before a disaster occurs how your insurance policy will protect your business. Discuss scenarios with your insurer and do not hesitate to explore your legal options. While you should be able to resolve many insurance disputes through the formal appeal process, you also have the right to file a lawsuit in the event the insurer denies your claim in bad faith.

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