Most businesses carry a commercial insurance policy that includes some level of coverage to help pay for cleaning up a mess caused by an insured peril.

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Ottawa - May 15, 2012 - When I was little kid, I remember our family arriving at our cottage late one Friday night. It was dark and we were all tired after the long drive. As we dragged our suitcases through the kitchen and across the living room floor, something seemed different but we couldn't quite put a finger on it. Then as the lights turned on in room after room it quickly became very apparent. A wild animal – possibly a squirrel - had gotten into our cottage during the week and tore the place up. Chewed up bedding here...pictures smashed to the floor over there. And the worst - it somehow got into the oil stove and there was greasy smut all over the place. Who knew that a tiny critter could do so much damage? And that story leads me to an often overlooked business risk that might be staring right at you.

Most businesses carry a commercial insurance policy that includes some level of coverage to help pay for cleaning up a mess caused by an insured peril. For example, suppose your business suffers a fire and you own the building. The fire department arrives on the scene quickly and does a terrific job. They snuff out the fire before it becomes a raging inferno and you are pleased there isn't more damage, but now the cleanup begins. Your insurance covered the cost of repairing the building but who pays for the clean up? Hopefully your broker informed you of a very important coverage known a "debris removal". It pretty much does what it says; this insurance product helps to pay for removing all of the debris which is often the result of some type of damage. But as important as debris removal coverage is, a fairly common problem with it is often overlooked.

A basic insurance policy for a small business might come standard with a $25,000 limit for debris removal. That means if the cleanup costs more than $25,000, you are stuck with the bill. Now, if a wild squirrel can cause a few thousand dollars in damage in a cottage in a matter of minutes, imagine what a small fire and 10 guys hosing it down will cause. And what if the damage is even worse? What if your building needs to come down? Have you priced out the hourly cost of heavy equipment and trucks and workmen, lately? How many days would they need to be at your location? And what happens if the dirt they remove is contaminated? How much will remediation cost? Some policies stipulate that removal costs are considered part of your total limit of insurance but even that can be troublesome. If you suffer a catastrophic loss which eats up most of your insurance limit to rebuild, there might be little left (if anything at all) to pay for debris removal. Something to think about is to consider increasing your overall limit to ensure you have enough coverage for removal.

As bad as it is to learn firsthand how much damage and expense a little critter can cause in an old cottage, it would be far worse to learn the hard way that your insurance doesn’t go far enough when it comes to cleaning up a much more expensive mess.