After a major hurricane, when people move from the press of survival and immediate recovery to rebuilding, insurance plays a critical part. In particular, “first party” or “property” insurance – covering policyholders for the property they own, rent or operate along with the income they lost and associated expenses – may help companies whose operations were damaged and dislocated by a hurricane.
In general, property insurance is designed to pay for the cost to repair, the actual cash value, or the replacement cost, of damaged buildings or equipment. Frequently, a property insurance policy contains business income coverage, designed to pay a policyholder its lost profit and continuing unavoidable expenses when the policyholder’s operations are disrupted by damage to property at the place of those operations. It can help supplement a business' income if the business can't operate due to a covered loss. Extensions in common use also cover losses of income when property critical to the policyholder’s operations is not damaged but the policyholder’s operations are nonetheless affected.
These tips are intended to assist policyholders affected by a hurricane in preserving their right to property, including business income coverage.