The wildfires that are still consuming the greater Los Angeles area have caused unimaginable devastation and taken an incredible toll on its residents, including requiring businesses and families to undergo the physical, mental and financial stress of evacuation; the tragedy of losing their loved ones, properties and communities; and the uncertainty over what comes next and how to rebuild.
On the last point, businesses’ and homeowners’ property insurance will play a vital role in the rebuilding of the affected areas and in getting policyholders back on their feet to run their businesses, and there are key aspects of that coverage policyholders should be aware of in order to maximize their insurance recovery to best position themselves moving forward from this tragedy.
1. Read the policy to understand the coverage grants that might be triggered.
Any process of recouping coverage for losses should begin with a careful review of the policy or policies in place on the property. If you do not have access to a copy of your policy, a copy can be obtained from your insurance broker, insurance agent or the insurance company directly.
Property insurance policies sold to both homeowners and businesses typically provide coverage for the repair or replacement of property that has been subjected to “physical loss or damage.” While the exact interpretation of that triggering phrase has been the subject of much debate in recent years in other situations, there is no debate that this phrase includes both fire and smoke damage to property.
Importantly for business owners, property policies also typically provide coverage for prolonged lost business income suffered by the business as a result of the physical damage. For example, perhaps even where a business suffered hardly any fire damage, the business must be shut down for two weeks just to remediate smoke damage before customers can safely reenter.
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