Why businesses should protect themselves with earthquake insurance

Posted by Jim Pietro on May 1, 2012 5:08:45 AM

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"Could we have an earthquake here?" Even as I asked that question a year ago, I could sense what people were thinking. "Here? Are you kidding? This is New England - not California."

Then a few months later, a 5.8 earthquake caused damage in Washington, D.C. and Virginia - and was felt along the east coast from Maine to Georgia and as far west as Michigan. Even though the west coast is especially prone to earthquakes, the Insurance Information Institute says that in the last century, earthquakes have caused damage in 39 states.

So, as the owner or executive of a business, it's important to ask yourself this vital question: "If we were to have an earthquake, how could we be sure that our company would be protected against its devastating effects?"

For starters, earthquakes are not covered under standard business insurance policies. So to be sure your business is protected, you will need to purchase earthquake insurance either as an endorsement to your basic policy or by a supplemental policy. Earthquake insurance covers damage from the shaking and cracking that can destroy your building or personal property. Some other kinds of damage - including fire and water damage due to burst gas and water pipes - may be covered by standard business policies. Most earthquake insurance policies have a deductible - usually a percentage of the cost to repair or replace the building.

To be sure you have the right type and amount of insurance, we invite you to talk it over with an advisor at Mid-State Insurance. We'll start by asking some basic but important questions. Do you own or lease your building? What is the value of your building and its contents? Do you maintain an inventory? If your building was damaged or destroyed, what would be the cost of operating from a temporary location? What other costs would you incur?

The bottom line comes down to this: earthquake insurance is not inexpensive, but you can work it into your budget. What you may not be able to come up with is the six-or-seven figure cost of rebuilding and reestablishing your business if an earthquake were to strike New England.

Topics: Jim's Blog, disaster planning, business insurance, earthquake insurance

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