Economic Development Recovery and Resiliency Playbook - Flipbook - Page 111
Possible questions to ask include the following.
1. Are my Property Coverage limits A, B, and C high enough for today’s prices?
a. The dollar amount limit of your “A” coverage should be as close as possible to what it would cost to repair or rebuild the
structure(s) in the event of a total loss. To determine this cost:
i. Get a specific commitment from your insurance company to calculate it for you. Ask them to send a professional
replacement cost estimator to your property;
ii. Pay a professional home inspection company to do it for you; or
iii.Get a local contractor to come and estimate the replacement cost of your property.
b. The limit of your “B” (Business Personal Property) should be enough to replace all removable items on the premises
that you own: washers and dryers, refrigerators, window drapes, trash cans, and business equipment.
c. The limit of your “C” (Loss of Income) coverage should be enough to replace the income you would lose if your building
became uninhabitable during the recovery period afer a total loss
2. Does my policy have a “Co-insurance” clause and if so, what is it?
a. Co-insurance is a penalty provision built into some commercial policies. The penalty is applied against you if you have
a loss and your insurance limits are too low to cover it. Your best bet is to buy a policy without a co-insurance, but if you
have one, keep your limits up to date to avoid the penalty in the event of a claim.
3. Is my liability coverage enough and do I need an Umbrella policy?
a. Liability coverage is your protection against a lawsuit if someone gets injured on your property and files a claim
against you. How much coverage you need depends on your personal assets, your property’s features, how many
tenants you have, and whether they have renter’s insurance. If someone is injured in an apartment on the premises
you own, rarely do they sue only the potentially responsible tenant. You, as the property owner, are almost always
sued, too. Commercial Umbrella insurance gives you extra coverage and is especially worthwhile if you own more
than one property.
4. Has my policy changed in regard to water damage?
a. Your insurance policy may only cover certain kinds of water damage. Over the years, water damage coverage has
changed significantly. Find out what you are covered for in regard to water damage.
Insurance extras that are definitely worth the cost:
• Extra or Extended Replacement Cost Coverage — Most insurance companies give you the option of buying extra
replacement cost coverage. This provides a cushion against inflation and increased costs of labor and building materials
over time. This additional coverage is fairly inexpensive.
• Building Code Upgrade/Code Compliance — The building codes in your area may change almost every year. Making sure
your policy has an extra provision for building code upgrades will ensure that you have enough money to repair and
rebuild your building to meet today’s building codes.
The California Department of Insurance Small Business Guide to Commercial Insurance is a valuable resource for property
owners, including those of commercial property. It reviews coverage sections, coverage limits, co-insurance, and covered causes
of loss. This resource provides excellent high-level discussion information to help you ensure you have appropriate coverage.
Conclusion
The resources included in this Appendix present several of the resources currently available both in the State of California and
nationwide. New resources are being created, shared, and developed with each new disaster event, so bear in mind that this
listing is far from complete. These resources are ofered as an opportunity to explore your preparedness and more deeply
understand the resources available and the next steps you might need to take in California.
It is critical to engage business in a strong recovery post-disaster. Preparing your resources ahead of an emergency enables
resilience and strengthens your community.
Tools for Implementation
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