A commercial property insurance policy can be depended upon handling direct losses to a business property. Although, what happens when mother nature acts up and causes consequential damage by knocking out utility services? Property could be harmed by heat-induced transformer breakdowns; or broken power lines, including compressors, motors and switches. Equipment damage can also result in a power surge which may harm expensive equipment. Commercial property may not cover loss that involves failure of utility services. As a result, a business could potentially be harmed when any utility failure or interruption occurs away from the insured business location.
Luckily, a business may purchase an additional, optional coverage to protect against utility service-related losses. A company usually has the option to buy the type of coverage it needs, such as services for water, telephone/communications (either including or not including land lines), gas and electric power.
Coverage forms usually define the utility services, using descriptions similar to the following:
- Water Supply Services refers to the pumping stations and water mains that supply the covered premises.
- Communication Supply Services refers to telephone, radio, microwave or television services that are included as covered property but coverage is not limited to only that property. The only excluded communication property is a satellite. Overhead transmission lines may be included or excluded, depending on the manner in which the schedule is completed.
- Power Supply Services means five specific types of property used to supply electricity, steam or gas. The types of property are generating plants, switching stations, substations, transformers and transmission lines. The transmission lines may be included or excluded, depending on the manner in which the schedule is completed.
Be sure to talk with your insurance professional if you have concerns about your business’ vulnerability to power-related losses.
If you have any questions about your existing policy, are inquiring information about a possible future policy or need further information, please call us at (631) 738-7300 or get a quick quote at www.vrpinsurance.com
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