1. Have you met with your insurance broker to go over your coverage and know what are you covered for in the event of specific disaster(s) or losses?

2. Do you have total or partial replacement coverage?

3. Is total insurance coverage required because of the nature of your construction? How much would total TRUE replacement add to your premium a year? This may be considerable and perhaps out of reach, but you make the final deicison relating to the exposure that you wish to carry.

4. What about specific insurance for specific equipment, pollution issues and other coverages?


Regarding replacement coverage: Insurance in buildings is usually based on partial destruction, not on total loss. Of course, total loss is only a problem of certain types of constructions, location due to threats of terrorism, or other conditions.

The cost of replacing a building deals with construction costs per square foot. If you know the total square feet of the building and the typical construction costs per square feet, you may have the cost of replacing the building as it exists today in the event of a TRUE total loss, even when the present building does not meet the present standard codes. Once your establish the figure, you may set yourself to find out if you need total TRUE replacement or a significant amount under "total loss."

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Thank you so much for your informative response. Your advice will help when we scrutinize our building's insurance, which I hope will be soon. I am particularly concerned about what the flooding of the sub basement ( for example from a monster hurricane) could mean to crucial equipment.

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What drainage and equipment do you have in place to draw your water out from the building? Do you presently have a problem when it rains under flashflood conditions?

We have PROBLEMS too, and we are not talking about a very large, deep sub-basement. However,interestinag enough, things were cheap when the building was constructed. You will laugh if I tell you that the "drainage" consisted in opening the doors of the lobby (which is below street level) to let the water floor the elevator shaft!!! So, drainage is extremely poor and we cannot do much after revising the subject numerous times.

Getting adequately sized sump pumps that can be displaced or in place to handle water under flooding conditions is critical in our case.

Before the rain or the storm hits your building, you should start finding answers, so you may not have to engage scuba divers to look for equipment. That would be too late!!! Finally, your insurance will help with any major damages after you have done all your due diligence.

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