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Did you lose food and other products due to equipment breakdown during the Hurricane Irma? O have lost them because  unexpected utilities failures in the facility?

Let’s assume that you are the owner of “Delicious on the Way” a grocery store that sells also delicatessen and take out fast food.  Normally, your shelves are full of fresh and packed products stored under normal temperatures. As you are aware in Florida in order to maintain normal temperatures is imperative to have an Air Conditioning System permanently cooling.  In addition to the fresh products you keep frozen products and food in the refrigerators.

What will happen if the refrigerators and the A/C system go out due to a power failure, no water supply or any other damage directly caused for the deficiency in the utilities?

The answer apparently is simple.  The insurance policy will pay for the damage of the equipment.  What about the merchandise in the shelves and those stored in the refrigerators?

It is subject to the coverage you have and paid for in your business insurance policy.  One of the most important coverage you should have is for food spoilage.  It provides payment if the food is contaminated or spoiled while it is kept in the coolers and there is a equipment breakdown.

 However, the standard insurance policies exclude losses caused by “the failure of power, communication, water or other utility service supplied to the described premises if the failure originates away from the described premises”  (ISO)

How should your insurance agent resolve the issue?

It is possible to add in the policy the endorsement denominated Utility Service – Direct Damage (Form CP04 17 10 12). It will cover direct physical loss to covered property caused by an interruption in: water supply, communication supply or power supply.

Does it resolve the issue?  in part only.  You probably have lost income since have been unable to sell groceries, fast food or refrigerated products to your clients for a period of time.  Let us suppose you sell $50.000 daily and the business has been closed for ten days.  You would loss $500.000. 

To resolve the second part of the issue related with the business income protection your agent could add the endorsement denominated Utility Services – Time Element (CP 15 45 06 07). It addresses the same issues that the Utility Service – Direct Damage but from the income protection perspective.

I offer a non-cost consultation and business policy review for business owners.  Please contact me. Phone: 239-821-9164; Email:; or visit our website:



Posted 7:22 AM

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