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Commercial Earthquake Insurance

As a business, you invest significant capital in your building and/or business personal property. These items can be insured under your Property Insurance or Business Package policy for theft, fire and many other perils.

Unfortunately, Earthquake coverage is NOT included in the standard commercial lines coverage. If you own property in the United States - especially California - you need earthquake insurance. Here are three reasons why you should use Hayes Brokers to shop for the right policy for your business:

1. You Can't Buy It Just Anywhere

The CEA (California Earthquake Authority) doesn't offer coverage to businesses. In fact, most major carriers that dropped out of the homeowner's market do not offer earthquake insurance to businesses.

Hayes Brokers has a large selection of insurance carriers who offer earthquake insurance and difference in conditions (DIC) policies to businesses. More carriers means more options for deductibles and coverage. If your broker does not offer a quote for earthquake coverage, ask for it.

2. It's Not Part of Your Property Policy

When earthquake claims started increasing, most carriers stopped offering the coverage altogether. A standard property policy, even if it is marketed as "special" or "all risks" coverage excludes coverage for things like earth movement and subsidence. In fact, the ISO Causes of Loss - Special Form lists the following exclusion:
That property policy you purchased won't be worth anything to you if the cause of your damages is earthquake. That damage will be excluded and will have to come out of your own pocket.

3. You Don't Have to Be on a Fault Line

The hotspot for Earthquakes used to be California due to the major fault lines in the state. This is no longer the case. Just take a look at Oklahoma, a state you wouldn't typically associate with earthquake activity.

Oklahoma and much of the Western United states have seen a major uptick in seismic activity due to hydraulic fracturing, also known as fracking. In fact, Oklahoma recorded 541 tremors in 2014 (1.5 per day) and are on track for a projected 941 quakes (2.5 per day) in 2015 (source: US Geological Survey). And guess what? Their insurance policies don't cover earth movement, either.

By comparison, California only had a little over 200 seismic events in 2014. However, seismic activity in California tends to be more destructive.

Seismic events due to fracking are difficult to predict, but the US Geological Survey, in conjunction with the California Geological Survey, predicted in 2008 that California had a 99% chance of having a major earthquake higher than 6.7, and a 46% chance of an earthquake higher than 7.5 in the next 30 years.

No one knows when or where the next quake might happen. The only thing you can know for sure is whether or not your business will be adequately protected when it happens. Hayes Brokers can help with earthquake insurance coverage and provide information on mitigation and other ways to save money when purchasing this valuable, necessary coverage.