Hail damage, insurance coverage and business risks

Pile of hail after a hail storm hits Perth.

Business or risk managers reviewing storm related insurance coverage often focus on wind and flooding as the key points of exposure.  An often overlooked storm effect is hail, which can result in catastrophic damage to business property, landscaping, equipment and people.

“The National Weather Service reports roughly 1-, 000-12,000 hail storms in an average year which means your chances of experiencing hail damage may be far greater than you think”

Hail storms do wide spread damage on everything in their path.  Hail destroys roofing, windows, gutters, decks, awnings, trees, plants and shrubs.  Vehicles exposed to a heavy storm can be ruined from an aesthetic point of view and just about anything out in the elements cannot avoid the devastating effects of a strong hail storm. 

An example of the significant impact hail can have is evidenced by a storm that hit the Denver, Colorado metro area on July 20, 2009.  Damage estimates (in 2009 dollars) were over $767 million.  Another example of hail’s destructive power came during a 2012 hail storm in NW China that killed 40 people and sent another 90 to the hospital.

Hail claims are one of the most challenging for both insurance companies and insured’s.  While roof damage is the most common claim, there are other aspects to hail damage that should be considered as well.  If you store raw materials outdoors it may be compromised by hail.  Any mobile equipment parked outside may also suffer from hail.  You may also be eligible for financial losses if your business is interrupted due to a hail storm.

Every policy and insurance company does things differently.  The worst time to find out your coverage isn’t adequate is after the storm.  Insurance coverage for hail varies state by state and in many cases standard policies leave hail destruction uncovered or under-funded.  It can be easy to assume that if one local business has a claim and received coverage you should be able to make a claim as well.  That may not be true.  Being pro-active when it comes to these types of natural risks could very well make the difference if and when your business takes a hard hit from a large storm.  As always, the more you know about your insurance coverage and what it details, the better prepared you will be in the event of a natural disaster.

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