Chris Ross Principal View Bio

collapse-covered-by-insurance

Sudden and unexpected — two words you never want to hear when running a business or owning a building. However, sometimes a collapse happens on your property, out of the blue. Recently in Buffalo, NY, a building suffered a partial collapse as its facade toppled onto the street below. The building in the Elmwood Village housed two small businesses — Half & Half Boutique and Parkway Hair Cutting. Luckily, no one on the sidewalk or inside of the building was injured. However, it brings up the questions of who’s going to pay for the damage and what does property insurance cover?

We sat down with the in-house Lawley Real Estate Insurance team to get the answers. Insight was given from John Beecher & Peter Braun, two partners of Lawley’s newest practice group.

Will traditional property insurance cover a sudden collapse or partial collapse of a building?

Beecher: Unfortunately, it may not be included in your property insurance. As a building owner, if you had prior knowledge of wear and tear of the building or you were not maintaining the building correctly, a sudden collapse that created damage like this would be excluded. This means you would not be eligible to file a claim and receive compensation.

Braun: A lot of building owners we run into don’t understand what their policies include. At Lawley Real Estate, we work with building and property owners each and every day. So we know how to explain what’s covered and what’s not in plain and simple terms. In this case, the organization or individual who owned the building on Elmwood may not receive the dollars back from their insurance company because of how the collapse happened or what they knew ahead of time. Claims adjusters will be on the scene and perform their investigation to determine what the insurance company would pay, if anything.

If a collapse happens because of bad construction work, is the contractor liable? And what would that mean?

Beecher: The contractor would also become a source of investigation. The claim adjuster and insurance company would look at things like the contractor’s history, their use of materials, how long ago was the work done, and a lot of other details to determine if the contractor can be held liable for the collapse and any damages that happened to the business or building.

Braun: Whenever you own a property or building and you are hiring a vendor to do work, in this case, a contractor, you want to make sure that they are insured properly. You will need to ensure you have every risk covered so you are in no way liable for their work. Having paperwork completed like an indemnity agreement and knowledge that a contractor has products completed operations insurance are critical to any work being done to your property.

How do I know if I have the right insurance coverage as a building or business owner?

Beecher: All brokers are required by law to tell you about coverages you should have. However, if brokers don’t know what your property or business needs, they may forget a coverage or omit a coverage that could leave you liable for damages like a collapse. The BEST thing to do is to talk with a broker, like Lawley, that has dedicated practice groups where insurance professionals work on insurance needs like yours day in and day out.

Braun: We formed the Lawley Real Estate Insurance practice group because we know building owners and business owners need to protect their property and assets. In the case of the partial collapse, you need to have insurance professionals representing you who can help with the claims process, be there to get your business back up and running as soon as possible, and answer unique questions such as “is the damage to my sign covered? is the loss of business while my building is nonoperational covered?” Our team knows the answers to these questions. We’re happy to analyze your current insurance program to double-check that you meet industry standards and you’re covered in every area you need to be.

 

Collapses are just one of the types of damage that can happen to your building or property. Talk to Peter Braun or John Beecher today if you are a business or building owner looking to understand your protection. Our team of Real Estate Insurance professionals is dedicated to helping those in the industry understand their risk and protect everything they’ve worked so hard to build.

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