Change of Season Brings New Claims Risks
With daylight savings time and cooler temperatures marking the change of season for much of the country, weather remains a concern for business owners. Not only do you have the deep freeze of northern states and the Midwest, but in recent years, severe storms and even tornados have plagued the Southwest.
Unstable and unpredictable weather conditions continue to be a concern around the globe. Across the insurance industry, the overall percentage of winter-related claims has increased at a higher rate than previous decades, likely due to the severity of storms and the resulting increase in the need for insurance protection.
One of the best ways to reduce your risk of a claim is through prevention methods, or risk management.
Common Winter Weather Claims
The best time to prepare for the harsh winter months is before they are in full swing. There are several types of claims that appear more frequently than others during these months, including wintery wind, hail, and weather-related water damage.
1. Wind and hail damage
One of the most common claims filed is due to wind and hail damage. In 2019 alone, there were 5,396 major hailstorms according to the National Oceanic and Atmospheric Administration’s (NOAA) severe storms database. And based on data from the Insurance Information Institute, hail-related losses between 2000 and 2019 averaged $8 billion to $14 billion per year. Texas remains the top state in hail losses followed by Kansas, Nebraska, South Dakota, and Colorado.
Severe windstorms, such as the derecho that swept across the Midwest earlier this year, can cause extreme damage all on their own. Within just a few weeks, thousands of claims were generated in Iowa alone as a result of the derecho. Insurers are expecting billions in losses due to claims from homeowners and businesses alike due to this catastrophic weather event.
2. Snow and ice damage
Snow and ice may look pretty, but they can be a destructive combination. If the roof of your business has satellite dishes, solar panels, or other structures, the additional weight of ice and snow may just tip the balance. The average claim for snow and ice damage exceeds $15,000. Snow fall of more than 12″ or 4″ of ice can crush your roof or cause falling tree branches. Water can freeze and clog gutter systems, creating “ice dams” that prevent proper runoff. This can cause a water buildup that can seep into your roof and ceiling.
Review your insurance policy for specific weather-related coverage as you head into the winter months.
How to Prepare for Unexpected Weather
Even with unpredictable things like the weather, there are numerous precautions you can take to mitigate your risk of a claim. Ongoing maintenance, building inspections, and monitoring are all effective measures you may already be doing. If not, the following recommendations are not difficult to implement.
Tip 1: Inspect your roof
Examine your building’s roof for damage after storms, or annually in regions that are less prone to severe weather. Replace any worn materials or other weak areas to ensure leaks don’t occur during future storms. Check flashing (a type of sheet metal used for waterproofing) and gutters and clean out any debris that may block drainage. Remove branches or leaves that may have accumulated during prior seasons or storms.
To reduce damage from ice and snow, seal any gaps that allow warm air to leak into an attic space, and keep it adequately ventilated. Insulate your heating system so you are not losing heat through the ceiling and roof. A roof rake is also helpful to clear heavy snow after major storms.
Tip 2: Install impact-resistant windows
Impact-resistant glass has been specially treated to help prevent shattering and to provide an extra barrier to safeguard your building from severe weather. While it’s still possible for it to break, it’s less likely to shatter completely, offering better protection from flying glass and debris during strong winds or a hailstorm.
Tip 3: Secure equipment and valuables
If you live in an area prone to strong winds or hail, keep an eye on the weather forecast so you can protect your equipment before a storm hits. Ensure any high-value items are in a safe and secure area, stored up high, and away from windows. Securely anchor any outdoor equipment, including kiosks, so it does not turn into a projectile during a storm.
Tip 4: Keep your employees safe
In the event of a storm, safety is of the utmost concern. Stay away from windows and take shelter in the safest part of your property. If your building doesn’t have a designated storm shelter, have employees take shelter in an area devoid of windows, such as a lavatory or break room.
Tip 5: Prepare an emergency plan
Make sure your employees understand what to do in the case of emergency. Communicate your preparedness plan ahead of time to all employees and reinforce it at designated times. Emergency drills at least 3 times per year will help everyone feel prepared if weather conditions become a threat to safety.
Tip 6: Maintain your premises
Cleaning up after a storm is just as important as preparing for one. In the case of snow and ice, protect both employees and customers by shoveling walkways and clearing parking lots. Apply commercial-grade salt to help melt ice faster for safer public areas.
Tip 7: Secure adequate wind and hail insurance coverage
A destructive storm can hit anywhere and can suspend your business operations for months, or worse. Wind and hail insurance claims are covered under a commercial property insurance policy, which can help you pay to repair or replace damaged property, including equipment, supplies, and structures. Some insurers offer a business owners policy (BOP) which covers not only property damage, but also includes business and liability insurance.
The Bottom Line
If you are currently covered, or think you are, review your policy language carefully with your insurance agent. Pay special attention to deductibles and endorsements that specifically name wind and hail changes. Have your agent explain any endorsements contained in your policy that may alter coverage or deductibles based on specific weather events to be clear you have the coverage you think you do.
Stay safe and keep your business operating smoothly throughout the winter season.
Dan Tharp is licensed in all states (except Alaska & Hawaii) and is the Vice President of Business Insurance Lines for Pearl Insurance. Dan has been assisting business owners in protecting their operations, customers, and employees for over 30 years. For questions regarding this blog post or any other insurance matter, he can be reached via phone at 800.447.4982 or email at dan.tharp@pearlinsurance.com.
