Businesses of all sizes and industries rely on outside service providers in order to help their company run smoothly. Some of the most critical services a company needs are utility services, specifically electricity, water, and gas utilities. Even small disruptions to these utilities could result in major financial losses, particularly when they occur offsite of a commercial property. Today's Aegis blog post looks at Off-Premises Utility Interruption Coverage, and why your business likely needs it.
What Is Off-Premises Utility Interruption Coverage?
Off-Premises Utility Interruption coverage works by covering loss of income and continuing expenses caused by off-site utility disruptions resulting from covered events. While utility problems or damages that occur directly on your commercial property may be covered losses under a Business Interruption policy, this might not be the case if your company is forced to temporarily close due to utility disruptions that occur offsite.
If you rent or own a commercial property, then you also likely need electricity in order to run your business, whether it's to power a restaurant kitchen, operate cash registers, run computer networks, or to meet with clients. If a lightning strike damages a power transformer or a windstorm knocks down power lines in the area, then your business could face a temporary closure and substantial losses. Off-Premises Utility Disruption Insurance would help offset income losses and continuing expenses while offsite utilities are being repaired.
When Hurricane Harvey struck Texas in 2017, floodwaters and storm debris damaged several water treatment facilities and water main lines. As a result, some businesses were forced to close until those water treatment plants were fully operational or water mains were repaired, even though their businesses did not suffer any physical damage or losses directly from the hurricane. Would your business be able to financially survive several days or a week of closure due to a lack of water? If the answer is no, then Off-Premises Utility Disruption insurance would be an important policy to have.
Gas Line Issues
Finally, gas utilities are essential to many businesses, particularly those in the restaurant and food service industry. Gas line breaks or issues that occur offsite could take hours or even days to safely repair or restore, so losses resulting from gas utility interruptions would likely be substantial. Off-Premises Utility Disruption coverage would benefit businesses that don't want to be responsible for lost income and ongoing expenses out of pocket.
If your business cannot easily absorb paying out of pocket for ongoing expenses and income losses that stem from offsite utility disruptions, then Off-Premises Utility Disruption coverage is essential to have for the best protection possible. Aegis Insurance & Financial Services can help your company analyze current and future business insurance coverage needs, establish immediate and long-term insurance goals, and secure the policies and coverages needed to protect your business. Contact Aegis today for more information at 713-850-7622, or fill out our online form to request a free quote.