If you haven’t spent much time thinking about lightning bolt insurance, now might be a good time to start. Why? Because in the last ten years, the average dollar amount for a lightning-related insurance claim has almost doubled, even as the number of insurance claims related to lightning bolts has fallen off sharply. (In related news, read about what happens if a more unlikely meteorite hits your business.)
Why? Because even though lighting is causing fewer insurance claims (thanks to surge protectors and lightning rods), it’s hurting more valuable gadgets.
If your business depends on computers, smartphones, tablets, or other gadgets that need to be plugged in regularly (and so are susceptible to damage from lightning bolts), be sure you’ve got adequate insurance to protect the damage that electric storms can cause. Here’s how.
Good News: Property Insurance Covers Lightning Bolt Damage (Usually)
Most small-business owners are relieved to learn that a standard Property Insurance policy (or the Property coverage included in a Business Owner’s Policy) covers the damage caused by lightning bolts. But that’s not the end of the story, because lightning can cause damage in multiple ways:
- Direct lightning damage: Most Property policies cover the damage caused by a bolt of lightning hitting a business directly, whether that strike leads to a fire or simply the frying of a business’s electrical gear.
- Power surge damage: When lightning damages business property indirectly (e.g., by causing a power surge), not all Property policies provide coverage. If, for example, the power surge happened outside your business premises, your Property Insurance may not cover you. To get an idea of what your policy protects, go over the fine print or consult with your insurance agent.
- Other indirect lightning damage: So what happens if lightning strikes a tree beside your business property and that tree falls on your office space? Again, this is a gray area for Property coverage, and you’ll need to talk to your agent to see how extensive your coverage is.
What Benefits Does Property Insurance Offer after a Lightning Bolt Strikes?
When you file a Property Insurance claim after a lightning bolt hits your business, the coverage you’re able to collect will depend on the terms of your policy. Specifically:
- Replacement-value vs. cash-value benefits: If your policy offers “replacement-value” coverage, you should receive from your insurance provider enough money to replace damaged or ruined items with brand-new pieces. If your policy offers “cash-value” coverage, you’ll receive only money that equals the depreciated value of the damaged asset. If your Property policy covers a lot of high-tech gadgets, replacement-value coverage is usually more beneficial, as technology tends to depreciate quickly.
- Business interruption benefits: Some Property Insurance policies include Business Interruption coverage, which kicks in when a business is unable to operate because of a covered Property event. The coverage provides income payments to replace what the business is unable to earn while it’s shut, and may also provide relocation costs.
Time to Buy Lightning Bolt Insurance?
Bottom line: if you don’t already have a Property Insurance policy for your business, it’s a good idea to invest in one to protect your business premises and the gear you rely on to serve your customers.
If you already have a Property policy in place, you’re probably covered for lightning strikes. To get an idea of exactly which lightning-related events your policy protects you for, review the fine print of your policy or dial up your insurance agent for a review.