Utility service interruption

Standard commercial property forms exclude loss caused by the failure of power, communications, water or other utility service that originates away from the insured premises. Utility service interruption endorsements buy that cover back. They come in two kinds. Time element coverage, ISO CP 15 45 (Utility Services - Time Element), pays lost income and extra expense when a covered cause of loss damages the utility's property and your operations stop. Direct damage coverage, CP 04 17, pays for physical damage to your own property that results from the outage, such as spoiled stock or frozen pipes.

The time element form carries a waiting period chosen from a schedule: none, or 12, 24, 48, 72, 96, 120, 144 or 168 hours. The schedule also names which services are insured, such as water, communications or power, so an unselected service is not covered.

The usual miss is assuming that business income cover handles a blackout. It does not unless the endorsement is on, and even then the form generally needs physical damage to the utility's property from a covered cause. Planned or grid-driven shutoffs, such as rolling blackouts, typically fall outside it. A business with refrigerated stock or just-in-time operations should check the endorsement against its real dependencies. The guide on utility service interruption coverage: when an outage is insured covers the options, and spoilage coverage explains the stock side.