Which Commercial Electrical Equipment is Likely to Be in Property Insurance Claims?

Commercial claims can be more complex than their residential counterparts, particularly those with electronically powered items. This equipment may be bigger, is often customized, and could need to follow specific codes and regulations.

It’s important adjusters understand the variety of electrically powered items that may appear in commercial claims and what might impact them.

Commercial Electrical Systems Adhere to Codes

Electrical panels for commercial policyholders may be larger and have more electricity going through them, which could require a commercial electrician to complete repair and replacement work.

Electrical systems are critical in a business to convert and distribute electricity and must adhere to specific codes and regulations. The Occupational Safety and Health Administration, National Electrical Code, and the National Fire Protection Association are among the groups that have electrical system requirements. These are aimed to prevent fire and accident hazards and safeguard against power surges and outage effects.

Panels come in different forms, including main breaker panels, main lug panels, sub-panels, and transfer switches. A policyholder should have an appropriate electrical system based on amps ratings, how many circuits are needed, and the type of electrical service (single-phase, three-phase WYE, or three-phase Delta) required.

Some smaller businesses have electrical panels more like those used in homes. Larger facilities or companies that use extra power may need a more intricate system that has 3-phase electricity compared to 240-volt residential electrical systems. Due to the system’s size and complexity, a commercial electrician would need to complete the installation and maintenance work, which could increase costs.

Perils that affect commercial electrical systems include surge, fire, theft and vandalism, wear and tear, and water.

Solar Power Systems Vary in Size

Commercial claims with solar power systems may be impacted by the type of inverter used to convert current. Because they are outside, solar panels can sustain weather-related perils, like this inverter damaged by lightning.

Like electrical systems, an expert needs to assess solar panels to determine an accurate cause of loss and scope of damage while ensuring the system meets code. Commercial solar systems have become more prevalent, and its equipment frequently appears in claims.

Commercial policyholders could have a solar farm or a multiple array system. Regardless, the panel’s size, the number of photovoltaic (PV) cells it holds, wattage, overall efficiency, and how the current is converted impacts repair and replacement costs. PV cells create Direct Current that is converted to Alternating Current through inverters. String inverters transform energy from multiple panels at a central point, while microinverters convert AC power at each panel. Though microinverters are more efficient, replacement expenses are more costly.

Solar panels and much of the energy-converting equipment are outside; therefore, perils affecting these systems can be weather-related, such as hail, wind, or lightning, but can also include surge, foreign object impact, theft and vandalism, water, fire, and damage by a vehicle.

Restaurant Equipment Varies in Type and Specialization

Commercial kitchens commonly have specialized equipment such as refrigeration or cooking appliances. Photo Credit: “Whitlock Design Group” by Dinesh Ramaswamy/ CC BY 4.0

Commercial kitchens are a prime example of places where customization and more complex equipment will affect claims. Chefs require larger freezers and refrigeration systems, a variety of cook tops that are on a bigger scale, and other specialized equipment to fry, steam, or cook up specialties compared to what may be needed in a home.

Damages to these could cost the policyholder – and the insurance carrier – much more than residential kitchen appliances. It may also be more difficult for adjusters to match Like Kind and Quality expectations without knowledge and experience.

Several perils affect restaurant equipment, including fire, surge and lightning, theft and vandalism, and wear and tear. Like electrical systems, it’s imperative to evaluate for cause of loss and confirm applicable repairs and replacements before settling this type of claim.

Technology Affects Commercial Phone, Security, Point of Sale, And Inventory System Options

Changing technology may impact how claims can be settled, such as the switch from cash registers to computers. Photo Credit: “Point of Sale” by Blake Wisz/ CC BY 4.0

Similar to how customization impacts appliances, technology affects how claims with commercial phone systems, point of sale equipment, and inventory systems may be settled. It may be more difficult for an adjuster to determine Like Kind and Quality equipment by themselves.

Phone systems include Key System Units, Private Branch Exchange, Voice Over Internet Protocol Phones, and hybrid systems. Each come with varying capabilities, including call forwarding, visual voicemail, conference calling, and data sharing, depending on what a business needs. These phone systems also have different equipment, including hubs, switches, adaptors, and routers, that could all be damaged and wind up in claims.

Commercial security systems also vary in their complexity and could have an array of equipment, including cameras, motion detectors, door and window sensors, computers, monitors, and networking equipment.

It’s important adjusters check to see if the phone system and the security or alarm system is owned, rented short-term, or leased long-term by the policyholder to review who is responsible for damages.

Point of sale and inventory systems also vary based on size, technology, and capabilities. They could range from a few tablets that handle transactions to large commercial warehouses systems.

High voltage surge is the most prominent damage for security equipment, commercial phones, and point of sale equipment. That should be verified because claimed equipment for all these categories is frequently not damaged or was caused by age-related wear and tear. These electrical items can also sustain damage from theft and vandalism, water, and fire.

Commercial Signs are Commonly Customized

Commercial signs are customized, which may make them more difficult to settle for Like Kind and Quality. Photo Credit: “Take Me Out” by Tim Mossholder/ CC BY 4.0

Commercial signs are typically customized to meet the policyholder’s needs. Signs come in various sizes and heights with different fonts and colors. They can also be lighted and/or digital, which could impact the types of damages they could sustain and the claim settlements.

Like solar panels, commercial signs sustain damage from perils related to being outside, including lightning, hail, wind, and water. They can also suffer damages from surge, theft and vandalism, wear and tear, water, and damage by vehicle.

Size, technological capabilities, and customization all affect commercial electrically powered items and claims. Adjusters can ensure they are making accurate settlements by determining the cause of loss and scope of damage and reviewing manufacturer databases. This verifies the claim is being settled with appropriate repairs and Like Kind and Quality replacements at applicable market pricing.

StrikeCheck supports insurance carriers in settling claims. Our reports summarizing onsite assessments and desktop reviews provide repair and replacement recommendations and other necessary information to empower adjusters to make accurate and timely claims decisions. Learn about the commercial and residential services StrikeCheck provides. For help with a commercial or residential claim that has electrically powered items, submit a claim now.

Back to top