What Happens if My Business is Struck by Lightning?

When it comes to protecting your business from electrical events, direct lightning strikes may be the least of your concerns.

Most property policies include coverage for damage caused by a direct lightning strike, such as power surges and fire. However, they typically do not include coverage for power surge damage due to a nearby strike or a non-lightning related event that caused the surge.

What are the risks from lightning strikes?

The biggest risk to your business isn’t necessarily a direct hit to your building or a fire, but a power surge. A bolt of lightning can strike the ground and travel up to 3 miles to find a conductor to transmit through – cables, wires, etc.

Once transmitting into your building a power surge can cause all kinds of damage, including disrupting software, deleting data and destroying circuitry, even causing fires as the electrical infrastructure designed to facilitate 120 volts is overloaded with 500 to 1,000+ volts of electricity.

Do you need extra insurance to protect against lightning strikes?

Because most property policies do cover damage from direct lightning strikes (including power surges), you probably don’t need to worry about additional lightning coverage.

What you do need to consider is damage caused by a power surge that is not caused by a direct lightning strike – a much more common scenario.

Other causes of power surges are lightning striking near your business, utility work, turning on a large piece of equipment, or operating equipment during peak demand such as the middle of summer. These events are not covered under your standard property policy.

3 Ways to Protect Your Business From Power Surges

Use the three tips below to mitigate your risk or a power surge and help your business recover in the event you experience a damaging power surge event.

  1. Use surge protectors to protect individual pieces of equipment such as printers, computers, and appliances, and replace them on a regular basis. After these units absorb a few surges, their effectiveness can be reduced.
  2. Use a main service panel suppressor. These heavy duty suppressors are designed to handle the surge as it enters your building to mitigate the impact on individual pieces of equipment and surge protectors. These units must be installed by a licensed electrician and typically cost between $200 and $700.
  3. Get additional property insurance coverages for equipment breakdown to repair or replace equipment damaged by a power surge. Also consider additional insurance to cover losses due to downtime and damaged inventory.

Discussing your concerns with your insurance agent is a great place to start!

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