Insuring against a utility service failure

Posted in Business

For many businesses, a utility service interruption, like a power outage or lost water supply, can mean more than just downtime. It can also mean lost productivity and income for as long as the outage occurs and even result in spoiled goods.

These are serious losses that can wreak havoc on a business’s financial health.

But a time element utility service endorsement can help keep a business thriving – even during those darkest days when the power’s out, the gas is off and the water has stopped running.

What is a utility service endorsement?

It’s an optional coverage that can be added onto a standard business insurance policy. A utility service endorsement helps cover the cost of your business’s lost revenue due to a covered cause of loss of an incoming utility, like electricity, water, gas or telephone lines.

With this endorsement, a covered cause of loss triggers business income coverage, which can include continuing expenses, like your insurance and rent payments, as well as profits that were lost because of the utility service interruption.

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How does utility service interruption coverage work?

Let’s say your business is a café that also sells fresh-cut flowers. After a hurricane causes a utility service power failure, your refrigerators shut down causing the food and flowers to spoil. On top of that, your business’s phone line isn’t working. You’re forced to keep your business closed until the phone line is operating again and you can replace the food and flowers that were lost. With a time element utility service endorsement, your claim can include the lost income from your business closure. Otherwise, you would have to absorb the cost of that loss.

There are different variations to this popular business insurance endorsement, including which utility services are covered, so make sure you know what’s included in your endorsement by speaking with your independent insurance agent.

Talk to your independent agent to learn more about utility service interruption coverage. Grange Insurance offers an endorsement called Time Element Utility Service that you can add to your business insurance policy. Contact your local independent agent for full details on coverages and discounts. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies.

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