Imagine that you’re a municipal manager when a heavy windstorm rolls through your area. Shortly afterward, you receive a call that a tree was blown over in one of your parks and it landed on a picnic pavilion causing severe damage to the structure. After confirming that no one was injured, and making arrangements to remove the tree and secure the area around the pavilion, you begin to wonder, “Is there insurance coverage for this pavilion?” Good question.
Municipalities are unique.
Whether your municipality is a Township, Borough, or City, you own property that most organizations don’t own. A typical small business owns a building, possibly ancillary storage buildings on their property, and maybe a sign out front—but that’s generally the extent of their real property holdings.
A municipality, on the other hand, may own a wide variety of unique structures spread across numerous different properties. This can include pavilions, street lights, traffic lights and related equipment, bridges, playground equipment, storage sheds, flagpoles, benches, monuments, fire hydrants, fences, pools . . . I think you get the point. While it may be tempting to write these items off as too incidental to worry about, that would be a mistake. Not only do some of these items have significant value, but also there are legitimate claim scenarios where a single event can cause damage to multiple structures (wind, hail, fire, etc.).
From an insurance perspective, all of these unique structures present some challenges.
The first and primary challenge is simply that it is a near-certainty you will miss listing some of these items on your Property insurance policy—because it’s impossible to remember them all or to think about them all when you review your Property coverage. Your insurance agent can help with this by reminding you to consider all of these unique items, or by doing physical site visits, but even that has its limitations. Your agent may not be able to visit every site, and they simply can’t place coverage for structures that they don’t know exist! The second challenge is that some of these unique structures can be difficult to insure, or at least will require additional underwriting before the insurance carrier will provide coverage. This is especially true with bridges, pools, and other high-value property.
So what’s the solution?
Thankfully, there is a simple solution to this problem. Some municipal insurance providers offer automatic coverage for “Outdoor Property.” This is a blanket coverage that can apply whether you have specifically listed the structure or not. The key to this is understanding exactly what is covered under this extension, and at what limit. It’s possible, however, even if you have this automatic coverage, there may still be outdoor property you own—due to value or type—that also will need to be covered.
If your insurance policy does not provide automatic coverage for outdoor property, then it’s important that you invest time compiling a comprehensive list of the type of property that you own, the approximate replacement value, and the location. Then, in conjunction with your insurance advisor, you can determine the best coverage.
Take time now to determine if your outdoor property is covered thoroughly. It might not be the most exciting item on your to-do list, but waiting until the tree is on the picnic pavilion is NOT the time to realize you didn’t have the coverage that you assumed you did.