There is a little known optional property insurance endorsement called sewer back-up – probably the worst titled insurance coverage ever. Although this is not a pleasant topic, a recent situation in a Chapel Hill, NC business illustrates why it should not be overlooked.
When employees reported to work one morning, they found sewage up to four inches deep in parts of the building. The back up came in through four office bathrooms. The building, which the business owns, had to undergo an environmental cleanup that involved taking up floors, removing wallboard, disinfecting and replacing office contents which was estimated to cost over $100,000. All repairs took several months to complete.
When the business contacted their insurance company they found that their insurance policy would only cover 10 to 25% of the repair costs.
Insurance policies, whether it is homeowners’, renters’, condo or a commercial property, does not cover damage from sewer back ups unless there is an endorsement added. The sewer back up endorsement provides coverage up to a limit, which the client selects. Many business policies include $10,000 or $25,000. In the above example, that is much too little insurance for the damages. So, how much coverage do you have? Do you even have sewer back up coverage? Now is a good time to check!