Utility Services Coverage
Plain English
Utility services coverage helps when the power, gas or water goes out because of a problem away from your property, like damage at a substation. It can pay for spoiled stock and lost income while you're closed. Many business property policies limit coverage for off-site outages, so it's often added as an endorsement.
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On this page
Definition
Utility services coverage, often added by endorsement, extends property and business income coverage to losses caused by an interruption of utility service, such as electricity, gas or water, that originates away from the insured premises. Without it, many commercial property policies limit or exclude off-premises power failure.
Why It Matters
A restaurant or grocery can lose a whole freezer of stock in an outage that didn't touch its building. Whether the policy pays often depends on this endorsement.
Real-World Example
Imagine a storm damages a utility substation two miles away and a grocery store loses power for 30 hours. Its freezers fail and $12,000 of frozen stock spoils. The store's building is undamaged. With a utility services endorsement, the spoiled stock and lost income may be covered, subject to the endorsement's limit and any waiting period.
Common Misconceptions
- Assuming business income coverage pays for any power outage.
- Not checking the endorsement's waiting period and limit.
Key Takeaways
- Triple-I describes the utility services endorsement as "added protection for disruption of basic utility services to a business's premises such as electric, gas or water."
- Triple-I's small business guide lists power failure among commonly excluded causes, with exceptions.
- Endorsements usually have their own limits and waiting periods.
- Ask whether your endorsement covers both property damage, like spoilage, and lost income.
Frequently Asked Questions
Does it cover an outage caused by my own wiring?
That's an on-premises problem, typically handled under the property or equipment breakdown coverage, if at all.
What's it commonly confused with?
Business income coverage, which generally needs physical damage at your premises.
Related Terms
Related Coverages
- Commercial Property Insurance
Related Scenarios
Explore the rest of the Business Insurance category.
Browse Business Insurance terms →Sources
The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- Let's get down to business: lightning can wreak havoc on your bottom lineInsurance Information Institute (Triple-I)
- Insuring your business: property insuranceInsurance Information Institute (Triple-I)
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.