Calling All Foodies: Back-Up Generators Can Reduce Your Losses
Are you a manufacturer, wholesaler or retailer of food products? Are you located in an area that experiences multiple power outages throughout the year due to weather susceptible overhead transmission lines or other off-premises power related issues? If you said yes to any of these questions, then back-up generators might be an important investment to your business.
When the power goes out, all businesses can potentially experience a loss of some kind, however, if your business is food, the clock starts ticking immediately. The uncertainty of how long the power might be out can make it difficult to strategize. Certain cold storage units can hold an acceptable temperature for a lengthy period of time, but will it be enough? Food retailers have open air refrigeration units that can lose their cool more quickly than their freezer section with doors. If you don’t have a plan in place, there’s a good chance that you’ll lose some of your product. The question is how much?
You may actually have a plan in place that doesn’t involve purchasing back-up generators, such as your own reefer trailers or possibly a 3rd party service that is contractually required to bring you a generator when you are in need of one. But what happens if you can’t get your trailer(s) to where you need it in an acceptable time frame? Or, because that 3rd party service might have contracts with many other businesses in your area, can they guarantee you’ll receive the generator you need immediately? Or, will other businesses receive their generator first?
But wait, don’t you have insurance for this product loss due to an off-premises power failure? The answer: maybe. More than likely, the limit for this coverage is sub-limited to an amount which will be far less than your total property policy limits. Additionally, there’s a waiting period (a time deductible, of sorts), typically of 12, 24, 48 or 72 hours, that must lapse before the insurance company is required to start paying out on the business income portion of a covered loss. Finally, because these types of losses can be costly, ranging from $10-20,000 up to and over $200,000, insurance companies might start increasing your waiting periods and possibly your property insurance premiums, if they see multiple claims of this type showing up on your loss runs.
It’s important that you’re aware of the limits available to you and what the waiting period might be on your property policy and how much product you could potentially lose during your waiting period. And, equally important, you should consider mitigating your losses and controlling your property insurance premiums by purchasing and maintaining back-up generators for your locations. Minimize your risk, maximize your health.
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