Today's Veterinary Business

FEB 2018

Today’s Veterinary Business provides information and resources designed to help veterinarians and office management improve the financial performance of their practices, allowing them to increase the level of patient care and client service.

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Page 28 of 67

Altered Flood Zones Changes to flood zones during the policy year can create an under- insured situation for a veterinary practice. The financial impact typi- cally surfaces in two areas: • Reduced flood coverage because of inadequate coverage limits. • Increased deductibles in high-hazard flood areas. Recommendation: Know your flood zoning and discuss any new or anticipated zoning changes with your insurance agent at each policy renewal. What Constitutes a Flood? A broad definition of "flood" sometimes allows certain non- flood events to be classified as one, potentially reducing coverage or increasing the applicable policy deductible. For example, many standard off-the-shelf policies may contain some or all of the following broad definitions: • Surface or underground water. • Waves, tides, tidal waves, tsunamis, the overflow of any body of water, a body of water's spray. • A mudslide or mudflow. • The release of water impounded by a dam. • Water or sewage that backs up through sewers, drains or sumps. The broad definitions mean that many types of water damage, whether naturally occurring or due to man-made or other artificial causes, qualify as a flood and are likely excluded from your policy. Recommendation: Read your policy closely alongside your insurance agent. Policy exclusions that utilize a narrow definition of flood, such as "the rising and overflowing of a body of water onto normally dry land," can have a significant positive financial impact on your business. What Is at Stake? Proper risk quantification and adjustments for assets exposed to a flood is an essential aspect of a risk-mitigation plan. When assess- ing how much flood insurance your business needs, first develop a firm understanding of the potential damage from a flood. This may sound simplistic, but many practice owners do not know the cost to replace all their assets in the event of a flood. Here are additional questions to consider: • If your business is in a leased property, who is responsible for damage to the building or to tenant improvements and betterments, such as floors, walls and cabinets, in the event of water damage? • What if the tenant improve- ments and betterments were in place when you moved into the space? Who is responsible for the cost of replacement or repair? Knowing the answer to these questions is the first step in determining the amount of coverage needed. Recommendation: Take time to quantify your exposure and the cost to replace business components that you own or have a contractual responsibility to replace. Then get an adequate amount of flood insurance. Other Considerations Unlike property and liability insur- ance policies, flood insurance for buildings and their contents are typ- ically provided in two or more poli- cies. For the building, primary flood insurance normally is purchased through the National Flood Insur- 1 2 3 4 Protect your livelihood with all the right coverage through AVMA PLIT. We are the most trusted source of professional, business and personal coverage for every stage of your career. our expertise is your strength Workers' Compensation • Business Property & Liability • Employment Practices Liability • Umbrella Liability • Flood • Commercial Auto • Data Breach • Professional Liability • Veterinary License Defense • Professional Extension (Animal Bailee) • Embryo & Semen Storage Coverage • Safety & Risk Management Resources • Personal Auto • Homeowners • Renters • Personal Excess (Umbrella) Liability For a coverage comparison of your entire insurance portfolio to the PLIT program, call 800-228-PLIT (7548) option 4 or visit

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