Running your own business comes with a lot of rewards, but also some risks. Responsible business owners do all they can to mitigate the risks, including securing insurance for their business operations.
While you may think the chance that you will need to make a claim on your business insurance is low, that’s not necessarily true. Over 10 years, about 40% of small business owners need to make an insurance claim. When you do, one specific word might cause you to face a claim dispute: how your insurance company defines an “event.”
When an “event” happens
About 15% of business insurance claims are because of wind and hail damage. Another 15% are the result of water and freezing damage. When a business can have problems getting their claim resolved is if their insurance doesn’t count a series of losses as tied to a single event. An insurance company could count pipes freezing that led to a water leak as two events, requiring separate deductibles or the applying policy limits separately.
If a business has an insurance claim that comes from environmental damage due to a chemical leak, how will the “event” clause apply? It’s not unlikely that a small chemical or oil spill may have gone on for a while before anyone detected it. Will your business be able to recover the needed funds to mitigate the full damage without paying multiple deductibles? Environmental law has many areas where an “event” becomes difficult to define.
Problems with an insurance claim
Insurance companies often try to limit claims for policyholders, even businesses. If you are having problems with a claim based on what qualifies as an “event,” you should contact an attorney familiar with insurance law. You want to make sure you receive the coverage you deserve.