Strongest Earthquake in 5 Years Rattles Southern California: Is Your Business Protected?
Posted on: April 6, 2018 by Signature Insurance Group
A magnitude 5.3 earthquake rattled southern California last Thursday, surprising residents throughout the region. The quake, which occurred approximately 17 miles southwest of Santa Cruz Island was the strongest to hit the area in five years. Although the epicenter was off the coast and at a 10 km depth, the shaking was felt by residents over 100 miles away. No damage was caused on the mainland, and only minor landslides and earth movement occurred on Santa Cruz Island, which was closest to the epicenter. However, this widely-felt earthquake serves as a timely reminder for southern California residents and business owners to ensure they’re prepared for future earthquakes.
The last earthquake that devastated California was in 2014 in Napa Valley. The 6.0-magnitude earthquake caused an estimated $80 to $100 million in damage to vineyards and businesses in Napa Valley and the surrounding areas. Too often, business owners don’t realize their earthquake policy is inadequate until it’s too late. A 5.3 magnitude earthquake, like the one that occurred last week, could cause major damage if it happened on the mainland. Businesses should use this reminder to check in with their insurance agent and ensure their earthquake coverage is still sufficient.
When purchasing or adding to an earthquake insurance policy, there are a few things that business owners should keep in mind, such as:
1. Building type and location
Commercial earthquake insurance premiums can vary widely depending on the location of the business and the type of building. Your insurance agent should work with you to provide insurance writers with comprehensive information on your design and construction materials so they can easily determine your insurability and rates. Depending on the building type, its location, its age, and its condition, earthquake insurance deductibles can range from 2 percent to 20 percent of the property value.
2. The amount of coverage needed
The type of business, the number of employees and the amount of inventory and machinery owned are important things to consider when creating or adding to an earthquake insurance policy. Non-physical losses such as business interruption should also be taken into account. Additional expenses that were not included when the policy was written would have to be paid out of pocket and would not count towards the deductible – which also needs to be paid out of pocket before insurance benefits would kick in.
Earthquake coverage does come with exclusions, but this is usually because the peril is already covered under a different type of policy. Fire is excluded under an earthquake policy, but would be covered by commercial property insurance, even the fire occurred as the result of an earthquake. Commercial vehicles are not covered by earthquake insurance, but should have their own protection through a commercial auto insurance policy.
Earthquakes are occurring with greater frequency throughout southern California and beyond. They frequently happen without any warning at all, so it’s important to be proactive and protect your business from the possibly devastating financial loss that can occur without proper earthquake coverage.
About Signature Insurance Group
Signature Insurance Group has been working since 1969 to provide comprehensive insurance solutions to individuals and businesses across the United States. We offer a range of insurance products and services in risk management, employee benefits, business insurance, and personal insurance, and we pride ourselves on our commitment to creating “Signature Relationships” with our clients where we commit to providing the best, most comprehensive service possible. To learn more about our goods and services, contact us today at (800) 464-3606.