What is Earthquake Deductible Buy-Back Coverage?
Commercial Property insurance earthquake deductibles range from 10% – 20% depending on a number of factors such as insurer capacity, building age, building construction, and location. A commercial property earthquake deductible is charged based on a percentage of the total value of property and business interruption coverages combined – not a percentage of the amount of damage caused. As such, your earthquake deductible is equal to that percentage of the total amount your property is insured for. In addition, most commercial property policies now carry a minimum earthquake deductible of $50,000 to $200,000.
- A commercial building valued at $1,000,000 to rebuild, gross rental income of $100,000, and extra expense of $50,000 would have an earthquake deductible ranging from $115,000 to $230,000 with a minimum deductible of $110,000 to $200,000.
- A restaurant with a contents limit of $1,000,000, a business interruption limit of $1,000,000, and an extra expense limit of $50,000 would have a an earthquake deductible ranging from $205,000 to $410,000.
As global earthquake concurrences continue to rise, we are seeing more insurance companies move towards a minimum earthquake deductible of 15 – 20%, particularly on structures built prior to 1980. Earthquake Deductible Buy-Back Coverage is designed to cover the amount of your deductible up to the limit chosen.
Why would I buy earthquake insurance if my deductible is so high?
One of the primary reasons to purchase insurance is to cover you for catastrophic events that result in losses that your business cannot financially sustain. As we’ve seen in other areas that have suffered damages from significant earthquakes, the financial impact of an earthquake to a business can be devastating. For those businesses with property that is not insured for earthquake, these events can force a business to go out of business. If you do not carry earthquake coverage on your property insurance policy you are not covered for business interruption resulting from and earthquake event.
How much does Commercial Property Earthquake Deductible Buy-Back Coverage cost?
- $50,000 Limit, suitable for a small retail business: $120 or $10 per month.
- $100,000 Limit, suitable for business operations with lower property and business interruption limits: $240 or $20 per month.
- $200,000 Limit, suitable for larger property and business interruption limits: $480 or $40 per month.
Do I qualify for this coverage?
- Most businesses qualify for coverage as long as you carry Earthquake coverage on your primary policy.
- Each contract can only cover one location therefore, if you own multiple locations, you may need to purchase multiple contracts.
Why should I choose AC&D for my Commercial Property Insurance needs?
At AC&D we work to recognize all areas of potential risk and then offer our client’s affordable & practical solutions. We are one of the first brokerages in Canada to offer this valuable coverage to protect your business continuity in the event of an earthquake. We also represent over 20 standard market insurance companies and over 100 insurance intermediaries, including coverholder agreements with Lloyd’s (of London) and Peace Hills General Insurance. This means we will find you the best insurance value and the best prices. At AC&D we are committed to providing the highest standards of service. Contact our office today for a no obligation review or Request a Quote.