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Why Business Owners Need Commercial Earthquake Insurance

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What is Earthquake Insurance?

When you think about earthquakes in the United States, most people think about California. But earthquakes happen around the United States—and the world—and earthquake damage can be quite destructive. 

The worst earthquake in the country was the 1964 Alaskan Earthquake. The first of the New Madrid earthquakes in 1811 were centered just north of Memphis. The first one was so strong, it changed the course of the Mississippi, rang church bells in Boston and woke President and Dolley Madison up in the White House. There have been earthquakes in 39 of the 50 states.

What Does Commercial Earthquake Insurance Cover?

Earthquakes can cause buildings and bridges to collapse. They can trigger landslides, flooding, and cause gas lines to explode, leading to fires. Because of this, earthquakes are excluded from coverage in most commercial property insurance policies. Some insurers allow you to add a rider to your policy but usually offer standalone policies for earthquakes. Earthquake insurance can cover:

  • Property damage to your building(s) 
  • Damage to business personal property/stock
  • Damage to signs, pools, fences, and sprinkler leakage
  • Repairs required by local ordinance or law

Almost every earthquake insurance policy will also include business interruption insurance. If you’re unable to operate, this portion of the policy can cover loss of business income, loss of rental income, payroll, taxes, debt, and more. 

Your business will be inspected to make sure it is properly built to withstand an earthquake. Depending on the results of the inspection, you may be required to make some structural improvements before an insurance company will write you a policy.

Earthquake insurance typically doesn’t provide coverage for damage from fires, vehicular accidents, water damage, and other perils. Be sure to look at the fine print of a policy before you purchase it.

Does Your Business Need Commercial Earthquake Insurance Coverage?

Is your business on the west coast or located near a geological fault-line? You’d be surprised to know that Oklahoma experiences numerous earthquakes and has seen 50% more purchase of policies than California. We recommend business owners find out if you are close to a fault line or are in a state prone to earthquakes. 

How Much Does Commercial Earthquake Insurance Cost?

Premiums and deductibles for earthquake insurance coverage vary wildly from state to state, based on the likelihood and average intensity of quakes. What other factors impact the cost of earthquake coverage?

  • Where your property is located
  • The square footage of your business
  • The age of your property
  • The construction type of your business
  • Distance from a fault line
  • Foundation and soil conditions 

NOTE: Most earthquake insurance companies have a deductible that is a percentage of the policy limits. If you have a $300,000 policy for your business and a 10% deductible, you’ll be paying $30,000 if you need your property replaced. 

Californians are unique in that they buy their earthquake insurance—whether homeowners or for a business property—through a public-private partnership called the California Earthquake Authority through a handful of insurance companies. 

Get a Free Commercial Earthquake Insurance Quote

Our goal at Tivly is to help small and medium-sized businesses find the insurance solutions they need to protect their business. If you need commercial earthquake insurance or simply have questions, feel free to reach out. You can complete the form at the top of the page or call us at 877-907-5267.


Related Articles: Commercial Property Insurance, Disaster Insurance, Business Hazard Insurance

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