The U.S. has sustained 285 weather and climate disasters since 1980 where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2020). The total cost of these 285 events exceeds $1.875 trillion.  

 2020 set the new annual record with 22 separate billion-dollar weather and climate disaster events—shattering the previous annual record of 16 events that occurred in 2011 and 2017. 2020 is the sixth consecutive year (2015-2020) in which 10 or more billion-dollar weather and climate disaster events have impacted the United States. Over the last 41 years (1980-2020), the years with 10 or more separate billion-dollar disaster events include 1998, 2008, 2011-2012, and 2015-2020.  

Source: NOAA National Centers for Environmental Information (NCEI) U.S. Billion-Dollar Weather and Climate Disasters (2021).   

Q: Why might a garden involve an insurance broker in disaster planning?    

A:  Some of the questions an insurance provider asks are related to risk assessment and exposures. The more they can understand, the better story they can tell the insurance marketplace to give your garden better pricing on fixed costs for insurance. Insurance company representatives can sit on disaster preparedness committees and answer questions related to risk and the different kinds of insurance coverage that make sense for your garden. The resources for understanding and managing risk are abundant; you just need to be able to take advantage of the resources you have.   

Q: Can I recoup the financial losses from pests/pathogens that damage living collections?    

A: Pests/pathogens that damage living collections are not covered on a standard insurance policy.  Pesticide & Herbicide coverage can be added to your general liability policy; this coverage will provide protection if there is bodily injury or property damage to a third party caused by your garden applying a pesticide or herbicide on your property.     

Q: How can gardens insure their plant collections?   

A:  Most insurance policies only cover living collections in climate-controlled environments within a conservatory, nursery, or greenhouse.   At the time of claim it is important to understand the value of the collection to help prove the loss; knowing this valuation will also be helpful in establishing the insurance limit (the maximum amount that the insurance policy covers). The best way to ensure proper insurance coverage even in these controlled environments is to have proper documentation and quantify your collections. It is paramount that you know—as precisely as possible—the number, type, and value of the plants in your collection. And digitizing your plant records is essential. The insurance company will want you to show them paper and electronic copies of your records and prove that you have backed up your collections in some form.    

Q: What about insurance for herbarium specimens?  

 A:  Herbarium specimens should be documented on paper AND in an electronic form, along with photos and associated acquisition date. As with living collections records, keeping duplicate records in redundant locations is important for disaster recovery. If you’ve maintained proper documentation, and your herbarium specimens are lost in a disaster, insurance may help your garden find new specimens to try to replace some of that value.    

Q: What about insurance for debris removal?    

 A:  If a tree is damaged in a windstorm and lands in an open space, the debris removal cost is generally not covered by an insurance policy. Most outdoor trees/shrubs/plants are only insured for named perils such as lightning, fire and vandalism—and then only with a smaller sublimit (smaller limit of insurance) on the property policy.  However, if the tree is damaged in a windstorm and falls on top of insured property such as buildings, fencing, or other scheduled property and the tree must be removed, insurance should cover the cost of both the tree removal and damage to the building. Essentially, the tree must cause damage to something that is already insured on the property policy. Remember to take photos immediately after such incidents, document the associated date and time, and track all related expenses.  In addition, closure to the garden due to a covered property claim & the resulting loss of net income (example; no admissions) should be tracked as it can be remitted as part of your property claim under business interruption coverage (if purchased).  

Q: Are there different insurance coverages for different natural disasters?     

A:  Yes! When someone says they are covered by insurance, they may not have “full” coverage for every kind of natural disaster. There are two primary exceptions that need separate insurance purchases: floods and earthquakes. If your garden is at high risk for these two natural disasters, you will have to purchase coverage through specialty insurance markets. Wind and hail can also be a separate purchase coverage in catastrophic coastal areas where by it may require a separate insurance company or require a separate deductible often times written on a percentage of loss basis.  

Q: What is the CoreLogic Hazard Risk Score and how is it used?    

A: The CoreLogic Hazard Risk Score is a web-based tool used to determine the natural hazard risk exposure of a location simply by typing in an address. Insurance underwriters use this and other tools to help assess the risk for your specific region and provide data analytics on high-risk hazards. It is very much predicated on region and susceptibility. An insurance provider will use CoreLogic to understand if the garden has X million in property value, do they as an insurance company only want to take on Y because of the high susceptibility to risk. It is also a third-party tool that can help gardens better understand and identify risks they may not have considered. For example, it can help a garden determine how susceptible they are to hail damage.  A designated high risk hail band can denote that the likelihood of a hail event is immanent both in frequency and severity.  Knowing this risk factor can help you prioritize capital investments in buildings and infrastructure due to high propensity to loss.    

Q.  What is Parametric Insurance?   

A.   Parametric insurance, also known as index insurance, is an innovative product that functions differently than traditional insurance.  This product pays out based on certain defined events within a defined geographic territory, regardless if you actually sustain a loss.  They normally do not have exclusions or restrictions of perils.  The payout is quick if the triggering event occurs.  For example, if you select wind as your event, and structure the policy based on wind speed (tropical storm category 1-5) within a certain mile radius of the garden and those conditions occur based on a third-party measurement (such as NOAA) the policy will pay based on the predetermined monetary amount chosen at the time of purchasing the insurance policy.  However, these new products come at a cost and will depend on the predictive modeling and underwriting used by the insurer.     

  

Disclaimer:  These represent frequently asked questions and are in no way inclusive.  The questions and answers are not intended to be exhaustive and do not constitute insurance advice that will work for every garden. The information, however, is intended to be helpful for thinking in a more sophisticated manner about your insurance coverage and to assist you in asking the right questions and identifying risk factors.  It is important to have a trusted insurance advisor and ask specific questions for your unique needs.  Should you request further guidance, please contact BHS Insurance or your insurance provider to learn more.