Picture this bout of bad luck: a pair of thieves breaks into your business office – not once, not twice, but for weeks on end. But because you are a responsible small-business owner, you have your Commercial Property Insurance policy ready to go. All you have to do is make a claim and you're golden, right?
Not so fast. Your coverage may depend entirely on something as simple as the punctuation in your policy. For example, Lexology reports that a welding business owner suffered a string of thefts. The crooks visited the business owner's ungated scrap metal yard and had a field day. For over a month, they sorted through the goods and carried off what they could. Because the owner had Property Insurance, he figured it would reimburse him for the losses he incurred.
The report notes the welder's insurance carrier denied the claim on the basis that the word occurrence in the policy's deductible provision refers to one event, not a string of them. Stranger still, the insurer argued that…
- Occurrence wasn't in quotation marks, so the word can only mean a single event.
- Because it refers to a single event, the carrier doesn't have to pay out for the multiple-theft claim.
In insurance documents, quotation marks bestow a certain super power on the word which expands its meaning, but that wasn't the case here.
Don't worry, dear readers, who don't have a gift for grammar. There's a happy ending to this tale of travail. The report states the New York court that ruled on this case agreed that "occurrence" has an expanded meaning when in quotation marks and that the expanded meaning of the word wasn't in play for the welder's deductible. However, the court decided that a reasonable person could understand multiple thefts by the same parties over a short span of time to be a single occurrence. Therefore, the welder's coverage should address the loss.
What can your business learn from this case? Namely this: read your small business insurance policies carefully. Sometimes your coverage hinges on things as benign as the use of quotation marks.
Commercial Property Insurance, Punctuation, and You
Though the case above may have you scratching your head about how Property Insurance works, all you really need to know is that it can…
- Reimburse you for lost or damaged physical property.
- Cover loss or damage caused by theft, vandalism, windstorms, and fires.
You can expand your Property Insurance coverage by adding riders to your policy. For example, if you live in a flood-prone region, it might make sense to ask your agent about a Flood Insurance rider. Without this addition, your policy won't be able to address flood damage.
However, the language your policy uses can determine how your coverage is applied. While no one expects you to moonlight as an insurance genius, it does benefit you to ask questions about your small business insurance policies. Don't let a misunderstanding catch your business off guard – enlist your agent or lawyer to help you understand exactly what your policy can and can't do.
Keeping the Thieves and Claims Away
Another interesting facet about the welder's case is that he left the scrap metal yard ungated. It's unsurprising thieves came back for second, third, and fourth helpings on all those unguarded goods.
It's a reminder that an ounce of prevention could spare you from spending time and money on a pound of cure. Investing in protective measures upfront may deter theft altogether, which saves you the trouble of having to file insurance claims and replace your assets.
For example, you might…
- Install security cameras to deter both employee theft and shoplifting.
- Put up gates around your business property.
- Lock up valuable items when you close your business for the night.
For more loss prevention tips, read "How to Get Affordable Commercial Property Insurance."