Strike back against lightning and other electrical disruptions with business insurance

Folk wisdom says lightning never strikes the same place twice. With more than 20 million cloud-to-ground strikes in the United States every year, it doesn't have to in order to affect your business.

In fact, your critical business equipment – from business computers to production machinery – could be damaged by power surges caused by a lightning strike miles away from your workplace. Without insurance for commercial power surge protection, you could be responsible for the repairs.

Power surge basics

Power surges, also known as transient voltages, can find a variety of routes into (and through) the workplace. 

A single bolt of lightning can deliver a whopping 100,000 volts of electricity. As that bolt travels toward earth, it searches for the path of least electrical resistance. On contact, it can travel up to 3 miles through the ground to find it. 

A typical power surge can send 500 to 1,000 volts through any cable, line or wire that connects your equipment to the outside world. These and other power fluctuations can disrupt software, delete data and destroy circuitry meant to handle a mere 120 volts. For businesses, that can mean downtime, lost income, the expense of replacing equipment – even a fire caused by overloaded power strips and electric panels. 

Once in your building, this energy can race through any conductive material, such as copper electrical wires, data cables, phone lines and even plumbing and ductwork. And it can jump between those systems in dramatic and extremely dangerous electric arcs. 

Small power surges are repeat offenders

Not all surges are as spectacular as a lightning bolt or electric arc. Switching on large equipment like a photocopier creates a brief spike in your building's power system. Peak-demand events like a hot summer day can cause a temporary loss of power, or brownout, in your area. Construction or line work can cut all power to your business – suddenly, and without warning. 

Individually, most power spikes and sags are insignificant. But over time an unsuspecting power surge can cause equipment breakdown, like hard drive failure or motherboard crash. And virtually every machine your business relies on can be at risk, including:

• Elevators, security systems and fire alarms
• Production machinery for manufacturing
• Point-of-sale systems for retail
• Climate control systems for schools, churches and rental units
• Diagnostic equipment for healthcare and automotive
• Refrigerated storage for food retail and warehousing 

The biggest shock of all? Damage to your equipment isn't automatically covered by your property insurance policy. Nor will it cover losses due to lost income, spoiled inventory, replacement costs, rush repairs and more. Specific endorsements need to be added to your insurance coverage, such as lightning and power surge protection. 

3 lines of defense against power surges

Business owners can take three simple steps to ensure their operation is ready for storm season and random power surges.

1. Use and understand surge protection devices. Point-of-use surge protectors provide a valuable line of defense for your equipment, but they have limitations. After absorbing a few significant hits, these devices can wear out, leaving your equipment to bear the full brunt of the next surge. Be sure to read each unit’s instructions in full.
2. Install a main service panel suppressor. While they have their place, surge protectors are no replacement for a heavy-duty surge suppressor at your main service panel. Service panel surge suppressors are designed to deal with large transient voltages as they enter your building, lessening the impact on surge protectors and business equipment down the line. These suppressors must be installed by a licensed electrician and inspected periodically. 
   
   Look for models with a response time of 5 nanoseconds or less, and a visible alarm that indicates when they've suffered significant damage. A good service panel suppressor will cost between $200 and $700. Because the average claim for lightning-related damage is well over $10,000, they can easily pay for themselves.
3. Invest in equipment breakdown insurance. Your agent can recommend additions to your coverage that will protect you against damage caused by power fluctuations. Equipment breakdown insurance, for example, can cover the cost to repair or replace the equipment your business relies on and keep your business running smoothly. 

Your company depends on sensitive equipment for communication and operation. Imagine if some, or all, of that equipment was severely damaged. In storm-prone areas, it’s possible. And your standard property insurance likely doesn't cover that kind of loss, so make sure that your business is covered for power surges. 

What to look for when purchasing surge suppressors and protectors 

Not all surge safety equipment is created equal. Here are some terms and features you should know before you purchase protection for your business.

• UL 1449 rating – Make sure protectors conform to UL certified safety standards set by Underwriters Laboratories.
• Clamping voltage – When it comes to the maximum voltage a protector will pass to your equipment, less is better. UL considers 330 volts a minimum, but closer to 120 volts is safer.
• Response times – A device should be able to detect a power surge within a few nano (one-billionth) or pico (one-trillionth) seconds.
• 400 Joules or above – When it comes to the maximum energy your protection equipment can handle, you’ll want a rating of 400 Joules or above.
• Alarm lights – Devices should have alarm lights that indicate when they are functioning and when they need to be replaced.
• Packaging and receipts – Most devices come with some amount of equipment coverage, but you will need to present the original sales receipt and product packaging.