At A.P. Reid, we consider consumer education to be one of our top priorities. An informed insurance buyer will made educated decisions about their insurance - ensuring that you avoid trouble down the road in the event of a claim. A.P. Reid customers benefit from the important information contained in our series of hundreds of Customer Information Bulletins. Below you will find a selection of these bulletins related to Business Insurance. Check back often as this selection will be updated from time to time.
Preserve your Livelihood - Perishable Goods and your Insurance Coverage
When your business sells “perishable goods” (food, raw and cooked, fresh grocery, ingredients for meals), you rely heavily on the constant source of electricity to keep your perishable foods in prime selling and cooking condition, and the failure of electricity at your premises can lead to food spoilage.
Most spoilage incurred by businesses like yours is a true business expense and cannot be “insured” when extreme weather causes an occasional power outage; regardless of duration
Minimizing your risk of loss of food product is a prime concern for you and no doubt you’ve received much advice over the years on how you can minimize your losses and risk of losses of food product. Some food spoilage caused during “power outages” is insurable – but those instances that enable coverage are not common. It is best to have a “plan of action” and be ready to put your plan of action into “being” should you discover yourself the victim of a power outage.
Some Tips Include:
• Having heavy blankets, or getting heavy blankets, to cover refrigeration equipment holding frozen or highly perishable foods. Heavy blankets will hold the cold.
• Having a generator – if not of sufficient size to operate your entire premises, at least to operate y our refrigeration equipment.
• Not opening freezers at all until power is restored at your premises.
• Moving product to a secondary location which still has electricity.
• Having a “rental source” for a refrigerated truck or box that can get to your site quickly.
There are two levels to the kind of food spoilage that you CAN insurance as a result of a power outage – “Basic” and “Expanded”.
Basic: A direct hit by wind, windstorm, or collapse due to the weight of ice, sleet, or snow to the power supply at your building. And by this, we are not including “wires down” – we mean a full transformer hit on your building. “Your power pole” knocked down. The essence of the basic coverage demands that the physical damage to the supply must be right on your premises.
Expanded: A direct hit by wind, windstorm, or collapse due to the weight of ice, sleet, or snow to transformers and power stations located elsewhere, but part of your supply chain. In other words, the actual physical damage does not have to be on your own premises; but there must be actual physical damage and it must occur within your own supply chain.
Reminder: The “Basic” and “Expanded” coverage available is for lost product only – not sales.
Power Outages and Lost Business
You cannot purchase insurance for lost business and business income due to the inability to provide an ideal selling temperature to your customers.
The business interruption insurance available to all businesses has one basic element. Your premises must be destroyed by a major event that caused significant damage to the actual premises like a fire or a major explosion.
Unless the premises have been destroyed, you must use your entrepreneurial creativity to maximize opportunity to generate sales, and open as quickly as you can.