Commercial Hurricane Insurance: What To Know

Hurricanes are the most catastrophic of all types of weather disasters in the U.S. Between 1980 and 2023, hurricanes caused the most damage, averaging $22.8 billion per event for a total of over $1.3 trillion in damage, and were responsible for the highest number of deaths related to weather disasters.

When an area is hit by a hurricane, it destroys homes, infrastructure, and businesses. Companies of all sizes are often faced with property damage and supply chain disruptions that lead to lost revenue. Small businesses in particular are vulnerable to the economic impact of hurricanes because they have fewer resources to repair or replace damaged property, making it harder to reopen their doors.

As hurricanes increase in severity and frequency, businesses with property and assets located in vulnerable areas are likely seeing insurance premiums rise, which increases operational costs. Companies may even be struggling to find commercial property coverage at all as some insurance providers pull out of high-risk states. To help your company manage this challenging market and figure out a way to get the coverage it needs, here’s a comprehensive guide to commercial hurricane insurance.

What damage can hurricanes cause your building?

Hurricanes are powerful and destructive forces of nature that can cause significant damage to commercial buildings and properties. When shopping for commercial hurricane insurance, keep in mind that your building can be exposed to one or more of the following types of damage, depending on the intensity and path of the storm:

Wind

High-speed winds can cause structural damage to buildings, roofs, windows, and doors. This can compromise the integrity and safety of your building and expose it to further damage from water and debris. Wind damage can also affect your outdoor equipment, signage, landscaping, and vehicles.

Flooding

Elevated sea levels caused by a hurricane’s low pressure and high winds often lead to coastal flooding, while heavy rainfall can cause inland flooding. If water inundates your property, it can corrode and damage your electrical and mechanical systems, equipment, furniture, vehicles, and inventory. Flooding can also disrupt your access to roads, bridges, and transportation and impact your ability to recover after a hurricane.

Debris

Flying debris from trees, signs, and other objects can break windows, damage roofs, and cause other structural damage. Debris damage can also create openings for water and wind to enter your building and cause further damage. Debris damage can also injure your employees, customers, or visitors.

Tornadoes

Hurricanes can spawn tornadoes, leading to additional localized damage. Tornadoes can cause severe wind damage, uproot trees, and hurl debris at your building. Tornadoes can also damage power lines, communication systems, and utilities.

Mold And Mildew

Water intrusion can lead to mold and mildew growth, causing health issues and requiring extensive remediation efforts. Mold and mildew can affect your indoor air quality, trigger allergic reactions, and damage your walls, ceilings, floors, and furniture. Mold and mildew can also contaminate your inventory, documents, and records.

Erosion

Storm surges can erode the shoreline, undermining foundations and damagings structures close to the water. Erosion can also alter the landscape and affect the drainage and runoff of your property. Down the road, erosion can increase the risk of future flooding and storm surges.

Business Interruption

The physical damage, evacuation orders, and utility failures that result from hurricanes can lead to operational downtime. This business interruption can affect your revenue, cash flow, and profitability, as well as negatively impact your reputation, customer loyalty, and market share.

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What types of commercial hurricane insurance do you need?

It’s always advisable to speak with a insurance expert to get the right coverage package for your needs, but most companies will need these as part of their hurricane policy:

Commercial Property Insurance

Commercial property insurance covers damage to your building and its contents from perils such as wind, hail, and fire. This type of insurance is essential—it will protect you from shouldering the high costs of repairing structural damage and loss of inventory or equipment due to hurricane winds.

Flood Insurance

As you might guess from the name, flood insurance covers damage caused by flooding (including flooding from storm surges). Standard property insurance usually excludes flood damage, so this coverage is often provided through the National Flood Insurance Program (NFIP) or private insurers.

Business Interruption Insurance

Business interruption insurance compensates for lost income and operating expenses if your business is forced to shut down due to hurricane damage. This will help cover payroll, rent, and other ongoing expenses during your recovery period.

Wind/Hail Only Coverage

A specialized offering, wind and hail insurance is important to seek out because it often is excluded or limited in standard property insurance policies in hurricane-prone areas. This coverage is often required for businesses in high-risk coastal regions.

By securing these types of commercial hurricane insurance, businesses in vulnerable areas can ensure they have comprehensive protection against the major risks and financial impacts associated with this natural disaster.

See Also: Is Your Business Insurance Policy Ready For Tornado Season?

LandesBlosch Tips For Acquiring Commercial Hurricane Insurance

We’ve put together some advice based on our decades of experience helping business owners with this type of coverage. Keep these tips in mind as you begin to research commercial hurricane insurance policies:

Verify that named-storm or wind is not excluded on your commercial property policy.

First things first—make sure all your perils are covered as you intend for them to be. This is the most important coverage buildings can have in coastal states, and thus the first thing that insurance companies will try to remove if you are at a high risk of hurricanes.

Update your agent about any building construction, especially roof replacements.

Make sure to let your insurance agent know when you update the roof, electrical, plumbing, or HVAC systems. Informing them of changes to your building will help keep your premiums low and your coverage options open. And it will also increase the number of bidders when you are looking for quotes.

Try to purchase wind coverage with your commercial property coverage.

In many situations, the commercial property policy will cover everything except wind; in these cases, you need to get a wind policy from a different insurance carrier. Although sometimes unavoidable, we generally advise purchasing a property policy that includes wind. It is generally more cost efficient, but also there is less ambiguity about where to turn in a claim (or which insurance company pays the claim) if something were to happen.

There will be more options in 2024 and 2025 than there have been.

The time to get quotes is now. After a couple of rough years for insuring buildings located in hurricane-prone regions, there are a couple new entrants coming into the coastal commercial property market. These new entrants will drive the price down a bit and also provide you with more options so you can get a better deal on commercial hurricane insurance.

Our Favorite Hurricane Insurance Companies

If you own a property or run a business in an area that’s vulnerable to natural disasters like hurricanes, it’s important to find a reputable, reliable insurance company to provide you with coverage. We recommend these two providers and can help you get and compare quotes for each:

CrossCover

CrossCover is an experienced underwriter of both inland and coastal property insurance. They offer great rates, quality coverage forms, and fair deductibles. Their claims handling is fair and they’re a great choice for business owners in hurricane-prone areas.

Velocity Risk

Velocity Risk specializes in various types of excess and surplus (E&S) insurance for commercial properties in catastrophe-prone areas. They also have great rates and a very good coverage form. Plus, they’re easy to work with and offer comprehensive coverages such as flood insurance on their policies.

Protect your business from hurricane threats.

Take steps to protect your assets and people from worst-case scenarios. A comprehensive commercial hurricane insurance policy can reduce a hurricane’s impact on your operations and revenue, helping you get back on your feet as soon as possible. Contact us today to get a free quote or learn more about your coverage options.