Unfortunate Circumstances

Have you ever had that feeling of getting ahead? Only to have problems come crashing down to set you back. These experiences are going to happen in our lives from time to time. Since I have joined the insurance industry I have really opened my eyes to how much it cost to get back to where you are right now in the event of a disaster. Sometimes it can be a fire, a hurricane, or just an accident. These are set backs that we never expect and are not prepared for.

I initially met with a client in April 2020 and did a policy review for a Business Owners Policy where the client owned the building. We increased a few of the coverages and went through how it would pay in the event of a claim. In May of 2020 the building caught fire from a tenants side of the building and the place was a total loss. Those of you not familiar with fires, well that is only about 30% of the damage. The fire department created a small pond out of the property to distinguish the fire, this was the other 70% of the loss. This property was a $700,000 total loss. Also the Savannah Fire department is one of the best and tried to save all electronics with tarps prior to dumping loads of water on it.

We proceeded to file the claim and start the process of getting back to where we are today. A place to go to for our business, all of our personal items in our offices, our favorite office chair, and our home away from home. This changes abruptly when disaster strikes and you have to push on, you have clients that need servicing and new business to conduct. Loss of use is a payment for your current space since it cannot be used during renovations. This will allow you to rent an additional space for a short term until your building is completed. The key to a good policy is not hurting your cash flow while they rebuild.

The insured was then able to lease another commercial space one street over and be back operational within 20 days of the fire. Then came time to figure out what was in the building. Business Personal Property is all of your contents, desk, computers, copiers, office supplies and even personal items for the office. It is important as a business owner to take inventory of these things and make sure they are accurate on your policy. If you bought the policy when you first opened up shop this has most likely drastically changed and needs updating. Take pictures each year so that you do not miss anything. The insurance company cannot replace something they do not know about.

The building renovation was during Covid so it took nearly 13 months for completion. The insured was able to lease a space for an entire year and move into a completely renovated space that was new! I believe the business still grew during the months they were displaced and did not financially impact them in a negative way. Although the premium did increase after a substantial loss, with the newly renovated interiors the rent for his property increased to cover the cost of the additional premium.

So when you just renew your policy or say ill take whatever is the cheapest, understand that may not be the coverage you need. Business changes from year to year, we acquire new inventory, equipment, personal items, and other items. Sometime our business operations change drastically and we never think to change it. Had this Business owner not done an annual policy review he could have ended up with a much different outcome.