The beautiful shorelines of Hawaiʻi are an attractive location, drawing in a variety of business operations. However, building near the water can also pose certain risks, such as flood and hurricane damage to buildings and belongings.
Comprehensive business insurance provides a reliable and affordable way for business owners to get the protection they need while setting up shop near the Hawaiʻi’s coasts.
The Changing Coastal Insurance Landscape
Recent weather events have been particularly challenging for insurers due to an increase in physical risks, especially along coastlines. Lack of comprehensive coverage in these regions has become more common as many insurers have been leaving due to the high risks involved.
This means many business owners are without the coverage they need to protect against potential damages. The good news is that there are policies that will cover damage caused by tropical storms and other natural disasters that affect Hawaiʻi’s shorelines.
However, it’s important to choose your coverage wisely. Many policies will cover storm damage but may have exclusions, such as flood damage. Failure to obtain a separate flood policy could leave business owners with significant out-of-pocket costs.
In addition, insurers that still offer coverage in high-risk coastal regions have seen an increased demand. In turn, many insurers are forced to increase their rates and rely more heavily on reinsurers to cover limits that exceed their risk tolerance. For some insurers, this also means reducing their coverage limits to help lower their exposure.
Securing Your Coastal Business in Hawaiʻi
Businesses that sit along Hawaiʻi’s shorelines are especially vulnerable to natural disasters, such as wind damage, floods, and hurricanes. To protect their investments, many business owners in these areas rely on insurance that is tailored to their unique needs and circumstances.
Most businesses carry property insurance, which protects the property itself. If a disaster should occur, such as a fire, flood, or windstorm, property insurance could help cover any damages or losses.
Commercial property insurance covers most physical assets owned by the business, including furniture, inventory, business documents, and equipment. However, commercial property insurance does have limitations. Most policies exclude flood damage, such as damage caused by storm surges.
This means that you’ll likely need to purchase a separate policy or risk having to pay for damages out-of-pocket. Fortunately, the National Flood Insurance Program is widely available and can provide financial protection against flood damage.
Hurricane insurance is also a must when operating a business on a Hawaiʻi shoreline. This type of policy protects the business against physical damage to the building sustained in a hurricane, such as damaged roofs caused by strong winds.
It may also cover office contents, computers and other electronic equipment, inventory, cargo, and various equipment, such as vehicles, machinery, and tools. Business disruptions are common after natural disasters, especially for businesses along affected coastlines.
If your business is forced to close temporarily, you could lose a significant sum from lack of operations. Business interruption insurance, otherwise known as business income insurance, can help replace lost income due to a covered loss, such as property damage.
If your business is forced to temporarily shut down, business interruption insurance can help cover a range of operating expenses. This includes revenue, loan payments, payroll, relocation costs, taxes, training costs, and rent, lease, and mortgage payments.
Similar to property insurance, business interruption insurance does not cover flood insurance, as this requires a separate policy. While natural disasters are the most common concern when building near Hawaiʻi’s shorelines, there are also other risks to consider.
In general, construction zones pose certain safety risks to both the property itself and the people around it. When building new construction or updating existing buildings, there is always a risk that a contractor could make a mistake, or an accident could happen that leads to an insurance claim.
Builder’s risk insurance is designed to protect building projects throughout the course of construction. This type of coverage is useful for any business that is working on a construction project, whether it’s a new building starting from the ground up or the addition of a new room or hallway.
Policies for builder’s risk insurance generally cover the materials and installation labor but may also provide financial security to cover unexpected events during construction, such as a fire.
Trust Atlas Insurance for Comprehensive Coverage
Despite the growth and opportunities that building near Hawaiʻi shorelines can present, there are always risks involved whenever a business chooses to operate in a high-risk region.
Fortunately, there are insurance policies that can provide these business owners with the protection they need to prevent significant financial losses. At Atlas, we have been serving the needs of local businesses for more than 90 years.
Our extensive experience in the local insurance industry has allowed us to provide tailored policies to businesses along Hawaiʻi’s shorelines and throughout the islands. To learn more about our services or for an insurance quote, contact Atlas Insurance Agency at (808) 400-6634.