As temperatures rise across Michigan and the Midwest this summer, so do the risks for small and midsize businesses. Heatwaves and power outages aren't just an inconvenience — they can disrupt operations, damage inventory, and result in serious financial loss.

The good news? With the right commercial insurance coverage, your business can be protected from the financial fallout of unexpected summer disruptions.

Here’s what every business owner should know.

The Real Risks of Summer Heatwaves

Extreme heat can impact businesses in several costly ways:

• Power outages due to strain on the electrical grid

• Spoiled inventory, especially for food service, retail, or healthcare

• Damaged electronics or HVAC systems

• Lost income if your business has to shut down temporarily

• Reduced employee productivity or safety issues

If your business relies on climate control, refrigeration, or consistent power, these aren’t hypotheticals — they’re real risks that deserve protection.

What Is Business Interruption Insurance?

Business interruption insurance (sometimes called business income coverage) helps replace lost income if your business can’t operate due to a covered peril like a fire, windstorm, or certain types of equipment damage.

It can cover:

• Lost profits during downtime

• Fixed costs like rent and payroll

• Relocation expenses if you have to temporarily move

Important note: Standard business interruption insurance typically doesn’t cover power outages unless the outage was caused by damage on your premises (e.g., a fire knocking out your building’s transformer). That’s why additional coverages may be necessary.

Coverages That Can Help During Summer Disruptions

Here are some important coverages that work together to protect your operations:

✅ Equipment Breakdown Coverage

Covers the repair or replacement of electrical systems, HVAC units, and refrigeration equipment due to mechanical failure or electrical surges — even if there's no fire or storm damage.

✅ Spoilage Coverage

Especially critical for restaurants, grocery stores, and medical offices. This helps pay for perishable goods that are ruined during a power outage.

✅ Utility Services – Time Element Endorsement

This add-on can extend business income coverage to apply when power, water, or communication services are disrupted off-site (like at a utility substation).

✅ Commercial Property Insurance

This is your baseline protection for physical damage to your building and contents caused by covered events like wind or fire — which can accompany summer storms.

Real-Life Scenario

Let’s say your small bakery loses power during a July heatwave, spoiling your entire refrigerated inventory and forcing a 3-day closure. If you have:

• Spoilage coverage: You may recover the cost of lost ingredients.

• Equipment breakdown: You may be reimbursed for the failed refrigerator unit.

• Business interruption: You may recover lost income for the closure — if the outage originated from covered damage on-site.

• Utility services endorsement: You may recover income even if the outage happened at a local substation.

Final Thought: Better Safe Than Sorry

As we are in a cycle of extreme weather, it’s smart to review your commercial insurance to make sure you’re not left in the dark — literally and financially — when the power goes out.

Get a Coverage Review Today

At Michigan Community Insurance, we help business owners stay protected, productive, and profitable — no matter what summer throws your way.

Contact us today for a free policy review and learn whether you have the right protection in place.