Worried about water damage to your business? Get solutions
It never rains but it pours. Virtually 300 years later, an essay entitled “It Cannot Rain But It Pours”1 continues to resonate worldwide. According to Wikisource, Johnathan Swift first published these prescient words in a 1726 collection. That is to say, when heavy rains happen, especially nowadays, water damage and business interruption is on Canadian business owners’ minds.
And there’s a good reason for that. A senior VP of a leading Canadian insurance company told Insurance Business Canada in 2017 that, “Water damage really is the new fire damage.”
“I have been in the insurance business for 21 years and, in that period, I’ve seen quite an important shift in construction insurance underwriting, from fire exposure to water damage. The high amount of water damage claims is the most serious concern for construction insurers right now.”2
Certainly with Global News Canada devoting an entire section of their website to water damage, when it‘s pouring rain, businesses across the country are at risk.
Likewise, water damage and business interruption Canada are some of the most common questions our team here at ALIGNED are asked about. To clarify what you need to know about water damage and business insurance we’ve pulled together some timely information in this post. Keep reading to learn more about water damage risks, available coverages and what you can do to align the best options with us.
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At any time of year, a broken pipe can quickly lead to water damage
It’s not necessarily rain that you need to be worried about. Water damage can be swift and happen even when you are trying to be proactive about risk management.
For example, a highrise building in London, Ontario was undergoing testing of its fire pump and sprinkler system when a six-inch pipe burst. Consequently, “people “were trapped in their apartments because the water was so deep in the hallway”.3 And furthermore, “it took workers about 10 hours to restore the sprinkler system.”4
And during winter, a broken pipe can be even worse. Not far from Moncton, New Brunswick,“more than 1,000 library books and course materials were ruined, and six classrooms were damaged at the Petitcodiac Regional School after a frozen water pipe burst in the ceiling of the school last Thursday night. The leak, however, did not trip the external alarm system.”5
Subsequently, “the leak wasn’t discovered until Friday morning by janitorial staff and only after three middle school and three high school classrooms at the community’s only school had been inundated with 8,000 gallons of sprinkler water.”6
Above all, water damage can quickly shut down any business or non-profit for a brief or extended period of time.
Flood Insurance Canada claim? Expect FirstOnSite support. After a loss occurs, getting your business back up and running as quickly as possible is the primary goal. Extended periods of downtime quickly add up to lost revenue. More importantly, not being able to deliver services or goods can impact a company’s brand, reputation, credibility as well as relationships with clients and suppliers.
What you need to know about flood insurance Canada – ALIGNED Insurance
If water damage is on your mind, we can help. Talk to an ALIGNED Insurance broker about commercial insurance options that can help keep your business afloat, even during worst-case scenarios.
And water damage caused by flooding – understanding commercial property insurance
Be it a burst pipe, water damage related to fighting a fire, a freak hail, rain or snowstorm, water has the potential to seriously interrupt your operations. Thankfully, flood insurance has always been available to most commercial and business clients as part of their commercial All Risk/Perils Property insurance.
That is to say, basic property insurance covers loss and damage caused by fire or lightning, including the cost of removing property as a way to protect it from further damage. However, an “All Risk or All Perils” insurance can provide coverage for extended perils.
For instance:
- Overland flooding
- Windstorms
- Hail
- Extreme weather linked to climate change, earthquakes, acts of terrorism, explosion, riots, smoke, civil commotions, etc.
In other words, flood insurance coverage can provide you with the protection your business needs to deal with many forms of water-related damage. Some of the typical elements of flood insurance coverage you can expect include:
- Buildings and other structures (leased or owned)
- Cargo
- Electronic data processing equipment (computers, etc.)
- Extra expenses as a result of loss
- Furniture, equipment, and supplies
- Inventory
- Leasehold improvements and betterments you made to a rented premise
- Lost revenue as a result of loss
- Machinery/boiler
- Mobile property (construction equipment, etc.)
- Money and securities
- Ordinary payroll
- Property in transit
- Records of accounts receivable
- Signs, fences and other outdoor property not directly attached to the building
- Valued documents, books, and papers
An ALIGNED Insurance broker can help you understand the options available to help protect your business against water damage related situations.
Water damage and business interruption coverage
Meanwhile, the Insurance Bureau of Canada (IBC) provides some valuable insights into how a business interruption policy can provide the protection your business needs. Specifically, “a named perils business interruption policy covers losses caused by the perils listed in your policy. An all risk policy provides protection against loss caused by any risk that is not specifically excluded from your policy.”7
New extreme weather risk insurance now available across Canada. We are constantly on the outlook for new insurance solutions for Canadian businesses. With extreme weather risks happening more frequently across the country, we keep watching for new and innovative insurance products that respond to Canadian weather-related risks.
Parametric insurance is one such product. Specifically designed to address claims related to extreme weather damage, parametric insurance is now available to Canadian businesses from AXA Global Parametrics, an insurance and reinsurance broking company incorporated in France. In addition, you may need more coverage to support you during the actual period of interruption. Keep reading…
Related Matters: What to know about Toronto Business Interruption Insurance
To sum up, there are many reasons why water damage is a top concern for business owners across Canada. And with the old adage it never rains but it pours seemingly ringing true regardless of the time of year, getting insurance that will respond to water damage situations has never been more important.
Therefore, to help you protect your business you need a broker who is on your side and will find the best rates for the coverage you need. Contact an ALIGNED Advocate today to discuss your business’s risks and coverage needs.
Source(s): 1 Wikisource: The Works of the Rev. Johnathan Swift ; 2 Insurancebusinessmag.ca: Construction risks: Water damage is the new fire ; 3,4 Globalnews.ca: Burst pipe causes $5M in damage in downtown London highrise ; 5,6 Globalnews.ca: Broken water pipe, faulty alarm leads to extensive damage at Peticodiac Regional School ; 7,8 IBC.ca: Business Interruption Insurance ;
