UCLA’s $136 million Pauley Pavilion, a newly renovated facility, is under eight to 10 inches of water after a water main erupted. Now the university is pointing fingers at the Department of Water and Power to foot the bill.
Here’s the skinny: a 93-year-old water main broke, and about 20 million gallons of water flooded UCLA’s campus. Though a couple underground parking structures are also showing signs of damage, the university’s top concern is the Pauley Pavilion, which houses the Bruins basketball team’s new hardwood court. According to KTLA5, a local news outlet, it’s uncertain whether the court will be salvageable. It’s already showing some signs of buckling and expansion.
Even though UCLA is self-insured, the university believes the Department of Water and Power should pay for the damages because the costs are a direct result of the water main break. The claim is now underway.
So what can your small business learn from UCLA’s pickle? Let’s find out.
Water, Water, Everywhere, and Not a Drop of Coverage
Bad things happen to good businesses. It’s an unfortunate truth of being a small-business owner. You can plan for every disaster and still be the victim of someone else’s oversights or mistakes. Other times, there’s just no outrunning nature.
Here are a few takeaways from the UCLA story:
- Check and recheck your coverage. Did you know that most standard Property Insurance forms exclude flood coverage? (This may be a good time to note that hurricane and earthquake coverages are often excluded, too.) But that doesn’t mean business owners in flood-prone regions are defenseless. Simply talk to your agent about adding a Flood Insurance rider to your Property policy. If your business gets flooded and all your office equipment is ruined, your coverage can pay to replace or repair your insured property.
- You can be sued for other people’s property losses. Maybe one day you’ll find your business in the Department of Water and Power’s position: your business is responsible for someone else’s property damages. Your General Liability Insurance can cover lawsuits when your business’s non-professional actions – or lack of actions – ruin someone’s property.
- Always update your Property Insurance policy. Sure, you may not shell out $136 million for a new pavilion, but chances are, as your business grows, you’ll make a few substantial property investments. Perhaps you decide to remodel your restaurant. Maybe your photography business finally purchases a brand-new studio. Whenever you acquire valuable assets, you need to contact your insurance agent to ensure your new investments are protected against loss or damage. If you don’t update your policy, you’ll have to pay to replace or repair your new additions out of pocket.
Other Times You Should Update Your Insurance Policies
While we’re on the topic of updating your policies, here are a few more instances that signal it’s time to call your insurance agent:
- Your business moves to a new location. This triggers a need to revisit your General Liability and Property Insurance policies. Because both deal with your physical office premises, your policies will need to cover your new business location and its contents.
- You hire or fire employees. This means you either need to purchase Workers’ Compensation Insurance or your existing policy needs to be amended to reflect the realities of your workforce. Remember, most states require employers to carry Workers’ Comp even if they only have one employee.
- You offer new services. Time to check on your Errors and Omissions Insurance. This policy is written expressly to cover lawsuits over the services you provide. Update your coverage to address your new services so you won’t have to pay out of pocket for lawsuits related to your new work.
- You are making bank – or just scraping by. As you may already know, your business’s revenue helps determine your policies’ premiums. If your business takes off and generates significantly more revenue than when you started, you may need to adjust your coverage to account for your business’s new worth. This may mean a slight increase in premiums. By contrast, if you experience a major downward shift in your income, be sure to contact your agent so you aren’t paying too much for coverage.
Not sure if your business’s coverage needs an update? Chat with an insureon agent to get some perspective and peace of mind.