Commercial Hurricane Insurance: What To Know

When hurricane season looms, commercial property owners brace not only for potential physical damage but also for the financial strain that can follow. That’s where commercial hurricane insurance comes into play – offering critical protection for buildings, inventory, equipment, and business continuity.

If recent storms have taught us anything, it’s that you don’t need to be on the Carolina coast to face hurricane risk. But how does a commercial insurance policy define hurricane risk? Typically, insurers define it as damage caused by a named storm with sustained winds of 74 mph or higher. In most cases, wind-related losses are covered under windstorm provisions, while flood damage – such as storm surge – is excluded unless you carry separate flood insurance. That said, there’s no universal standard. Definitions and coverage can vary based on the insurer, policy type, and location. Some policies may apply special deductibles or endorsements only when a storm is officially named, while others may include broader terms for wind events. Understanding exactly how your policy defines and limits hurricane-related coverage is the first step toward making sure your business is prepared.

In this guide, we’ll break down what kind of insurance you need for a hurricane, dive into some details about coverage in the Carolinas, and provide a checklist for getting the right coverage for your business.

What Is Commercial Hurricane Insurance?

Commercial hurricane insurance isn’t a single, standalone policy. Instead, it refers to a combination of coverage types to protect their assets during a hurricane. This form of coverage is especially vital in hurricane-prone areas like Florida, Louisiana, South Carolina, and North Carolina, where storm season can bring both wind and water damage.

Businesses at risk of hurricanes typically must ensure their standard commercial property policy includes hurricane-related perils or add separate endorsements that cover wind damage or named storm events. Flood insurance is also essential, as damage from storm surge or rising water is not included in most commercial property insurance policies. Let’s look at this layered approach to hurricane protection a bit closer.

What Kind of Insurance Do You Need for a Hurricane?

Protecting your business from hurricane damage requires more than just a single policy. Because commercial hurricane insurance isn’t sold as a stand-alone product, you’ll need a combination of coverages to ensure you’re protected against the full range of storm-related losses. Here are the key types of insurance businesses may need to consider:

1. Commercial Property Insurance

Commercial property insurance is the foundation of hurricane protection for most businesses. It typically covers physical damage to your building, equipment, signage, furniture, and inventory caused by wind or wind-driven rain.

Note, however, that many commercial property policies in high-risk areas exclude wind damage or apply strict limits without an added endorsement.

2. Named Storm or Windstorm Endorsement

This adds or clarifies coverage for storm-related damage caused by specific weather events, like hurricanes or tropical storms. It typically applies only when a storm meets certain criteria (e.g., it’s officially named by the National Hurricane Center or meets a specific wind speed threshold). This endorsement is what triggers your hurricane deductible and ensures storm-related coverage is recognized under your policy.

3. Hurricane Deductible

This is not a separate policy, but a special deductible that applies only when the named storm or windstorm endorsement is triggered. Unlike standard deductibles (a flat amount), it’s usually a percentage of your property’s insured value – often 2% to 5%. That means tens of thousands in out-of-pocket costs before coverage begins. Understanding this percentage – and planning for it – is essential.

4. Flood Insurance

Standard commercial policies do not cover damage from storm surge or rising water. To protect against these risks – especially in FEMA flood zones or coastal areas – you’ll need a separate flood insurance policy, available either through the National Flood Insurance Program (NFIP) or a private flood insurance provider (often with higher limits and broader coverage).

5. Business Interruption Insurance

Hurricanes don’t just destroy buildings – they disrupt everything. Even if your property is spared, power outages, supply chain issues, or evacuation orders can shut you down. Business interruption insurance helps cover lost income and operating expenses (like payroll, rent, and utilities) when a covered hurricane forces you to close or suspend operations. Without this coverage, lost income won’t be reimbursed.

Be aware: this coverage often has a waiting period and typically only applies if there’s physical damage to your premises.

6. Commercial Auto Insurance

If your business owns vehicles, commercial auto insurance may cover hurricane-related damage such as flooding, flying debris, or falling trees – but only if you carry comprehensive coverage. Don’t assume basic liability is enough; Review your auto policy to ensure hurricane risks are included.

7. Ordinance or Law Coverage

After a storm, local rebuilding codes may require upgrades that your standard policy doesn’t cover. Ordinance or law coverage helps pay for the cost to rebuild in compliance with updated codes – especially critical for older structures.

8. Umbrella Insurance

While umbrella insurance doesn’t cover direct property damage, it provides excess liability protection once your other policies reach their limits. This can be critical in the aftermath of a storm, especially if:

• Someone is injured on your premises during or after the hurricane
• You’re held liable for damages beyond the limits of your primary liability policies
• You face lawsuits related to cleanup, environmental impact, or delayed deliveries

North & South Carolina Hurricane Insurance: What to Know

Hurricane insurance in North and South Carolina comes with a unique set of considerations due to our states’ high exposure to Atlantic storms. Businesses along the coast are often subject to:

• Mandatory windstorm deductibles
• Zoning and building code requirements that affect premiums
• Limited coverage availability in the private market

How much is hurricane insurance in South Carolina? Premiums vary depending on location, construction type, building elevation, and prior claims. However, it’s not unusual for businesses near the coast to pay thousands annually for comprehensive hurricane protection.

To put it in context, the average cost of hurricane insurance in South Carolina could range between $1,500 and $5,000+ per year depending on your coverage limits. By comparison, the average cost for commercial insurance nationwide (without hurricane endorsements) is often between $500 and $3,000 per year for small to mid-size businesses.

Does Boat Insurance Cover Hurricane Damage?

If your business involves marine operations, you may be wondering, does boat insurance cover hurricane damage? The answer: not always. Many boat insurance policies exclude hurricane-related damage unless you’ve added storm coverage and followed specific procedures, such as:

• Moving the boat to a pre-approved hurricane-safe location
• Hauling the vessel out of the water
• Providing photographic documentation before and after the storm

Failure to follow these terms could void your coverage. That’s why it’s vital for marine businesses and charter operators to clarify hurricane protection with their insurer before the season begins.

How To Get Commercial Hurricane Coverage

Getting commercial hurricane insurance is all about building the right mix of coverages to match your business’s risk. Here’s how to get started:

1. Evaluate Your Risk

Is your business located near the coast, in a flood zone, or in a hurricane-prone state? The higher the risk, the more layered your coverage needs to be.

2. Review Your Current Coverage

Check your commercial property policy for hurricane or windstorm exclusions, flood damage exclusions, a hurricane deductible, and whether business interruption is included.

3. Work With a Broker or Agent

Commercial hurricane insurance isn’t one-size-fits-all. Working with an agent local to your region, like the team members at Independent Insurance Associates, can help assess your risk exposure and build the right package of policies and endorsements.

4. Understand Deductibles & Triggers

Make sure you’re clear on the details of your coverage. For example, what’s your hurricane deductible amount? When does it apply (only for named storms?) Is it per event or per year?

5. Prepare for Claims

Before hurricane season, photograph property and assets, back up important documents, and have a business continuity plan ready.

The time to brace for potential impact is long before the storm. Connect with us today – we stand ready to support your business year round.