Lightning – or power surge? I’m not worried; I’m covered

Lightning and power surge can 

cause damage

In the old days – I am 54 and have been in the insurance business since 1987 – a lightning claim investigation was a pretty simple process. I would simply review whatever resources were available and determine if a thunderstorm had passed through the area on the day the loss occurred. If a storm could be verified, the loss claim was validated.

Lacking other facts to go on, it’s possible that some validated lightning loss claims could have come from other causes. Today, thanks to weather satellites and the World Wide Web, lightning strikes can be verified with pinpoint accuracy.

Why should this matter to you?

Lightning can strike at a considerable distance from your premises and – through the electrical distribution lines that serve your building – result in a power surge that damages your equipment just as a direct lightning strike would.

Because damage was not caused by a direct lightning strike to your premises, it may not be covered by your property policy. But when you purchase equipment breakdown coverage, you don’t need to worry; the damage caused by lightning, or lightning-related surge, is covered.

More information is available about the science of lightning and ways to protect your property:

• The National Weather Service dispels common myths about lightning.
• Eastern Kentucky University’s Smart Computing site offers tips for preventing power surge damage to computers.
• The Illinois Emergency Management Agency has a Lightning Safety Awareness Guidebook.

See our recent post on predicted cost and claim increases in 2014, due to extreme weather patterns like lightning and hail, and how to protect your business, home, and wallet. 

Submitted by Wayne Pinney

‘Small’ equipment loss can be a big thing

Posted on March 11, 2014

A small business may depend on equipment such as a cooler for flowers.

When you hear machinery and equipment discussed as an available insurance coverage, you may envision huge mechanical or electrical apparatus associated with large-scale operations or massive production floors.

You may conclude that your family-run flower shop or small- to medium-sized business doesn’t need this type of coverage.

Remember that insurance is about protecting your business from loss, and loss must be considered in the context of your individual situation.

• An unexpected mechanical failure of a small refrigeration system component at an inconvenient time – for example, the day before Mother’s Day if you run a flower shop – may result in several thousand dollars of lost stock. Repair bills could be catastrophic for your business. In financially tough times, the expense may even threaten your ability to stay in business.
• A power surge could destroy or damage the new – but just out of warranty – phone system or computer servers upon which your accounting business depends.

By comparison, a large business may be able to absorb an equipment-related loss of several hundred thousand dollars with nothing more than a few budget adjustments.

So, who has the greatest machinery and equipment loss exposure?

When you consider that mechanical breakdown is much more likely than a major fire loss, doesn’t it make sense to consider purchasing mechanical breakdown coverage for your business – no matter the size?

The good news: it’s easy and convenient. Coverage can be added through endorsement to your existing commercial policy or, if you prefer, through purchase of a separate policy.

Call us and we can help you to determine the type and amount of coverage that’s right for your situation.

John Jacquat: (303) 843-1001

Submitted by Wayne Pinney