Posted on May 19, 2014
Alaska experiences earthquake and volcano activity on a regularly occurring basis. Interestingly, the state does not require that business owners purchase earthquake insurance coverage despite the fact that of the top ten global earthquakes, Alaska has experienced three of the largest in history.
In December 2011, the United States Geological Survey notified the state that the Cleveland Volcano situated on the Aleutian Islands was on high alert for potential eruption. While the islands are uninhabited and far from the state's capital, the increase in volcanic activity is also cause to consider protecting homes and businesses from natural disaster. In February 2012, scientists again warned that this same volcano is subject to sudden eruption because new lava domes have recently formed over several months.
When seismic activity is added to the threat of active volcano explosions, Alaska businesses must fully evaluate their risk and purchase the appropriate commercial insurance coverage to protect their assets from the threat of earthquakes and volcanoes.
Most commercial property insurance policies do not provide coverage for earthquakes or volcanic activity. Separate coverage must be purchased well ahead of time to cover these events because insurance companies will not issue policies during or after an earthquake or eruption. Some carriers will add the coverage by endorsement.
Earthquake insurance will pay to repair or replace property damaged due to a seismic event. Earthquake deductibles are slightly different than other commercial insurance policies in that they are usually much higher - 10 to 20 percent of the value of the property rather than a set dollar amount.
With more insurers limiting the number of earthquake policies or actually ending coverage in different state markets, business owners must make an effort to secure the coverage well ahead of time should earthquake coverage not be available.