How commercial insurance helps small businesses recover from fire damage and secondary water damage

1/18/2023 (Permalink)

Blog Summary: When a fire and water damage disaster occurs at a small business, having the correct insurance coverage, as well as choosing the right restoration company, is a key part of the recovery process.

The fire damage restoration and water removal professionals at SERVPRO® of Carrollton explain how adequate insurance coverage can enable a small business to recover from a fire damage disaster. The team also provides small businesses with end-to-end management of the insurance claims process, allowing the business owner to focus on recovering from the fire damage disaster rather than the insurance claims process.

Fire damage is among small businesses' most frequent and costly insurance claims. In conjunction with a comprehensive plan to reduce the risk of fire hazards in the workplace, adequate commercial property insurance coverage is essential for a small business's financial and physical well-being.

A fire damage disaster at a small business involves a multitude of consequences. The business's physical property is damaged by fire, smoke, and soot. Water damage from the fire sprinkler system or the fire department may be greater than the damage from the actual fire. The property of customers or other third parties may be damaged in the fire, and the small business is likely liable for this damage. The disruption to normal operations also interrupts the revenue cycle. The following insurance policies provide a shield to protect a small business against the negative impact of a fire risk.

#1. Commercial property insurance

Commercial property insurance is the foundation of a sound strategy to protect against fire risk. This policy covers any buildings owned by the business and the contents on the premises. Office equipment, furniture, manufacturing and processing equipment, tools, raw materials, and inventory fall under the umbrella of this policy. This basic policy is usually affordable. Reimbursement options may lead to a reduction in premiums. Reimbursement for replacement costs is greater than reimbursement for actual cash value, and the premiums reflect this difference.

#2. General liability insurance

A general liability policy covers third-party injury or property damage. This policy would take care of the damages if a customer's property were damaged or destroyed in the fire. Personal bodily Injury or trauma to vendors, customers, or other third parties injured in the fire would be covered. General liability insurance also covers defamation lawsuits.

#3. Business owner’s policy 

A Business Owner’s Policy (BOP) combines commercial property insurance and general liability insurance in one policy, netting a premium discount for the business owner. A scenario in which a BOP would come in handy might be when a machine shop is struck by fire, which destroys a piece of equipment or part. A BOP would reimburse for the loss of the part or piece of equipment.

#4. Business interruption insurance

Business interruption insurance protects the income of a business should normal business operations be disrupted by fire or a natural disaster. This policy is usually added as a rider to the commercial property policy or the BOP. Business income, debt service, relocation expenses, rent, and salaries would be covered by this policy.

#5. Commercial auto insurance

Commercial auto insurance is required for company-owned vehicles. This policy would cover injuries and property damage resulting from an accident.

Comprehensive coverage typically reimburses for damage to vehicles from fire, vandalism, burglaries, or water damage. This coverage is essential where the risks of natural disasters and wildfires are elevated. Seek advice from an insurance provider to determine if there are any restrictions or exclusions in the policy based on the location of the business.

Fire damage cleanup and restoration

The importance of a sound insurance strategy that limits exposure to fire risk hazards cannot be overemphasized. A business needs to recover financially from the interruption of production or services. The longer the business is out of business, the greater the likelihood it will never resume normal business operations. Cleanup and restoration of the damaged areas are vital. Rapid response and a quick cleanup and restoration process from a reputable damage restoration company get products and services flowing again. By pre-qualifying a property damage restoration company, the business owner or property manager makes only one call to enlist the services of a proven, trusted service provider who can scale to any size disaster. Hours or days lost finding and vetting a restoration team needlessly add layers of expense that could have been avoided.

A call to SERVPRO of Carrollton has a crew on the scene in about an hour, 24/7, 365 days a year, including holidays. A trained technician inspects and assesses the damage. A detailed estimate with images and video is presented to the customer. This estimate will prove indispensable during the insurance claims process. Very likely, SERVPRO of Carrollton has already worked with the business’s insurance company. The ability to scale through other SERVPRO franchises fast-tracks the cleanup and restoration process. Delays are costly for a small business sidelined by a fire damage disaster. Pre-qualification is streamlined. SERVPRO of Carrollton also assists businesses with emergency-ready plans for any size or type of disaster.

For more information about Valley Ranch, Irving, TX, water removal services, call SERVPRO of Carrollton at (972) 446-0383 or email office@SERVPRO10952.com.