If you have been in business for a while, it is safe to assume that you are familiar with most forms of business insurance. It is also likely that you are familiar with the popular expression that insurance companies cannot protect you against “an act of nature”. However, the laws of insurance are not cast in stone. As things change in the business environment, insurance laws have to change as well. It is likely that the increasing wave of natural disasters in some parts of the globe have made insurers companies modify their laws on insurance against natural disasters. These days, it is actually possible to get insurance for natural disasters but this depends on a number of factors.
Hurricane Insurance
A standard business insurance will give you limited cover in cases of damage by hurricanes. For instance, your business is covered if a hurricane blows away your roof or if your windows are damaged by winds arising from a hurricane. Your business is also covered if rain gets into your office building and causes damage. However, your insurer will not compensate you if the water damage is due to a flood. For this, you need to take out a separate flood insurance policy.
Flood Insurance
Flood insurance for business owners is available but the premium can be quite high especially if the company is located in or near areas that are prone to flooding. The only way to reduce the cost of flood insurance premium is for the business owner to make the business less vulnerable to flooding.
Earthquake Insurance
From the perspective of the insurer, this form of insurance is very risky. This is why each insurer decides the kind of damage they are willing to cover. Some insurers don’t even offer earthquake insurance at all while some do but charge very high premiums. Typically, this policy is sold as a separate coverage and does not form part of the standard business insurance policy. If you take out this policy for you your business, you should expect limited cover for damage from tremors.
Volcano Insurance
Like flood insurance, volcano insurance is a tricky business. Most insurers will not even cover your business if it located in a hazard zone. However, some insurers will offer limited cover for damage caused by ash or lava. Again, if a volcanic eruption sets off an earthquake or a mudslide, that will not be covered by this policy.
As you can see, business insurance does not usually cover natural disasters. Insurance companies are not in business to lose money and this is why they are careful when it comes to providing cover against acts of nature. For the business owner, it makes sense to pay the high premium to get insurance cover against natural disasters.