The Silent Risk Lurking in Your Business Insurance

When was the last time you reviewed your property insurance policy? If you’re like most business owners, the answer is probably “too long ago.” Unfortunately, complacency could cost you everything. Recent market changes—skyrocketing construction costs, supply chain delays, and increasing natural disasters—mean your coverage from two years ago may not cover you today.

In the last two years, the cost of construction has exploded. According to a report by the Associated General Contractors of America, construction material costs rose 10.1% in 2022 alone. This sharp spike could mean the cost to rebuild or repair your property is significantly higher than when you first signed your policy. If your policy was written based on outdated values, you could pay out of pocket to cover the difference. There is no need to panic, though; our team is here to give you the tools to protect your property and your business best.

Understanding Your Insurance Policy

What “Replacement Cost” Really Means (And Why It’s Misleading)

Many business owners falsely believe replacement cost coverage will cover the total cost of rebuilding their property, regardless of market changes. In reality, the term “replacement cost” only applies to the maximum amount of coverage explicitly listed in your policy. It doesn’t automatically adjust for inflation or increasing material costs. If the limits in your policy haven’t been updated to reflect current market values, you’re left exposed.

The Underinsurance Epidemic in Commercial Properties

According to a study by Marshall & Swift/Boeckh, 75% of commercial properties in the United States are underinsured by an average of 40%. This staggering statistic means most businesses facing a catastrophic loss will find themselves unable to rebuild or repair their property fully. Even worse, those same businesses might not even realize they’re underinsured until they file a claim—potentially leaving them on the hook for tens or hundreds of thousands of dollars in unexpected costs.

No business or person should have to go through this. While our current insurance climate may not be in favor of the insured, Premier Claims is here to fight for your right to a fair claim and an adequate policy.

When Disaster Strikes

Natural disasters aren’t a hypothetical risk. In 2024 alone, there have been 20 confirmed weather/climate disaster events in the United States, “with losses exceeding $1,000,000,000 each,” according to the National Centers for Environmental Information. This includes everything from hurricanes and floods to wildfires and tornadoes—events that often devastate businesses and lead to major insurance claims.

Unfortunately, underinsured businesses are far less likely to recover. The Federal Emergency Management Agency (FEMA) estimates 40% to 60% of small businesses never reopen after a disaster. For those with insufficient coverage, the financial burden is simply too great.

Updating Your Policy Fell Through the Cracks

Running a business is no small feat. With countless responsibilities on your plate—handling operations, growing your customer base, and managing employees—reviewing your insurance policy typically doesn’t make the top of the to-do list. And that’s completely understandable.

For many business owners, the insurance policy they signed years ago feels like a safety net. It’s easy to assume that it will continue to protect your business, no matter how much time passes or how the market changes. After all, you should be able to trust your insurance carrier has your best interest in mind. At least, you would think!

The problem is that policies don’t automatically update to reflect your property’s changing needs. It’s not your fault if you didn’t know; no one’s given you a reason to look.

Regularly reviewing your policy might seem unnecessary, especially if you’ve never experienced issues with your carrier. With the rapid changes in the industry and the increasing frequency of natural disasters, we recommend an annual review of your coverage to keep up with reality.

The Real Solution: Regular Policy Reviews

The good news? Preventing underinsurance is relatively easy. Regular policy reviews, ideally every year, ensure your policy reflects the current needs of your property, thereby keeping you and your business protected.

Our team of legal professionals provides complimentary policy reviews to try to identify any gaps in your coverage. If necessary, it may be worth discussing adding an Inflation Guard Endorsement and ACV coverage to your policy.

Inflation Guard Endorsement

A rider that automatically adjusts your policy limits to account for rising construction costs.

Actual Cash Value Coverage

A policy provision that compensates policyholders for the current market value of damaged or lost property, rather than replacement cost. ACV takes into account depreciation, meaning the payout reflects the item’s value at the time of the loss.

Take Action Before It’s Too Late

Underinsurance is a risk no business can afford to ignore. The consequences of insufficient coverage are severe—from devastating financial losses to permanent business closure. Rising construction costs, natural disasters, and the complexities of modern insurance policies make reviewing and updating your coverage more important than ever.

Not sure if you’re underinsured? Don’t wait until the next disaster to find out.

Contact our team today for a free policy review!

Protect Your Property Before Hurricane Helene

With Hurricane Helene looming, it’s easy to focus solely on securing supplies and preparing for the storm. However, one of the most important steps you can take is documenting the current condition of your property. Having this documentation can be invaluable if you need to file an insurance claim after the hurricane passes. After all, the last thing you want to deal with in the aftermath of a storm is the stress of proving your losses to your insurance carrier.

Why Documenting Your Property’s Condition Is Crucial

After a natural disaster like a hurricane, proving the extent of the damage to your insurance carrier can become difficult. If you don’t have clear evidence of your property’s pre-storm condition, the insurer may question how much damage is directly related to the hurricane. By showing the property’s condition before the storm, you can avoid delays or disputes in getting the compensation you need for repairs.

How to Document Your Property Before Hurricane Helene

Take Clear Photos and Videos

Start by photographing and recording your entire property, both inside and outside. Pay special attention to areas that are prone to damage, such as the roof, windows, and doors. Ensure your images are high-quality and well-lit. For video documentation, provide a verbal description as you walk through each area of your property, pointing out specific details like recent renovations or the condition of older structures. This extra effort can go a long way in showcasing your property’s integrity.
Capture Key Areas of Potential Damage

Focus on areas of your property that could be most affected by Hurricane Helene, such as:
- Roofing and Gutters: Photograph the current condition of the roof to prove there was no existing damage.
- Windows and Doors: These areas are often the first to suffer damage during a hurricane. Capture their current state, including any protective measures like storm shutters.
- Exterior Landscaping and Fencing: Document trees, fences, and any outdoor structures that could be affected by high winds.
Create a Property Inventory

We recommend creating a list of your personal belongings and their estimated value. This inventory should include everything from electronics and appliances to furniture and valuables. Keep receipts and proof of purchase alongside your inventory for expensive items, like jewelry or high-end electronics. Keeping a digital copy of this inventory is in your best interest when it comes time to submit your claim efficiently. These items may hold sentimental value as well as financial investment, so documenting them is a key step in protecting yourself.
Store Your Documentation in a Safe Place

Once you’ve gathered all your documentation, make sure it’s stored safely. Opt for cloud storage services or a backup drive to ensure your data is not lost, even if your property sustains significant damage. Physical copies should be kept in a waterproof and fireproof container. Taking these precautions can give you a sense of security, knowing you have what you need in case the unexpected happens.

Why Is This Important?

When filing a claim after a hurricane, your insurance carrier will typically assess the damage to determine how much you should be compensated. If you’ve documented your property’s condition beforehand, you can quickly provide evidence that supports your claim, helping you avoid disputes about pre-existing damage.

Insurance adjusters appreciate policyholders who can show clear before-and-after comparisons. These records can fast-track the claims process, allowing you to receive payments more quickly. Moreover, it helps prevent disputes over whether certain damages were caused by the hurricane or pre-existing issues, reducing the stress of navigating your recovery.

Don’t Wait Until It’s Too Late

It’s important to document your property well before Hurricane Helene reaches your doorstep. Once a storm warning is issued, there’s often too little time to create comprehensive documentation. Make property documentation a regular part of your annual maintenance to stay prepared for unexpected events like Hurricane Helene.

Be Prepared, Stay Safe, and Protect Yourself

With hurricanes becoming more frequent and severe, it’s essential to prepare your property physically and administratively. Properly documenting your property’s condition is one of the best ways to protect your financial interests and those you love. Taking these steps before the storm can make the claims process smoother and more efficient, giving you peace of mind during a stressful time.

At Premier Claims, we understand preparing for a hurricane can be overwhelming. Our dedicated team is here to support you throughout the entire process, from beginning to end. We’ll help you navigate the critical steps in pre-hurricane preparation, including how to document your property effectively. You don’t have to do this alone—reach out to our team today to create a solid foundation for your post-storm recovery.

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