Inside This Article:
- A mysterious object crashed through the roof of an auto shop in New Jersey on April 9, causing substantial damage.
- The incident was captured on surveillance cameras and described by witnesses as a “giant fireball” followed by a loud boom, fueling concerns about the dangers of falling objects after previous drone sightings around the state.
- A small business’s Commercial Property Insurance can help pay for repairs related to falling objects and other sudden, unexpected losses.
- Business interruption expenses during temporary shutdowns may also be covered by insurance.
- There are misconceptions about what a policy does and does not cover, so property owners must have a trusted broker relationship and fully understand their policy.
A flash of light and a loud boom sparked an as-yet-unsolved mystery at an automotive shop in Magnolia, New Jersey, when a mysterious object tore through the roof at about 2:30 a.m. on April 9. The incident grabbed headlines as surveillance footage and local doorbell cameras captured what was described as a “giant fireball” crashing through the shop’s metal roof.
When the auto shop owner arrived at work later that morning, he found a hole in the roof, scattered debris, and a large dent in a thick steel gage box. At last report, there was still no sign of the object that caused the damage, but the incident left the owner and neighbors speculating that it may have been an object falling from space.
“A mysterious object falling from the sky is definitely not something you see very often,” said Lisa Campbell, Associate Manager, Halifax, Atlantic Division, Burns & Wilcox, Halifax, Nova Scotia. “However, with the number of drones and different types of surveillance technology being used today, I could see this potentially happening more in the years ahead.”
With the number of drones and different types of surveillance technology being used today, I could see [fallen drone incidents] potentially happening more in the years ahead.
Recent sightings of drones in the skies over New Jersey—including one that crashed near a home in Morris County in December—have fueled suspicions and concerns about the possible dangers of mysterious falling objects. This recent incident is a clear example of why business owners need Commercial Property Insurance, said Kevin Cuyler, Manager, Commercial Insurance, Burns & Wilcox, New Orleans, Louisiana.
“This is the exact thing that insurance is supposed to cover—something unforeseen and completely outside of the insured’s control,” Cuyler said. “Not knowing exactly what this was could make a claim more challenging, but most property policies will cover falling objects.”
This is the exact thing that insurance is supposed to cover—something unforeseen and completely outside of the insured’s control.
The risk of falling drones, trees, and other objects
In addition to raising concerns—and conspiracy theories—among residents, the recent drone sightings in New Jersey even briefly shut down an airport. The White House later stated that most of the drones seen in the area were authorized by the Federal Aviation Administration and—in the press secretary’s words— “were not the enemy.”
In June of last year, a family in Florida sought damages from NASA after space debris from the International Space Station reportedly crashed into their home, leaving a hole through the roof and the subflooring, according to USA Today. In Jacksonville, Florida, last July, a restaurant was forced to close after part of a tree fell onto the property’s roof and into the dining room overnight, First Coast News reported.
Whether it may be space debris, a drone, a downed power line or a tree limb, all are examples of potential falling objects that could cause damage to a commercial or residential property. When a business is damaged by a falling object, its Commercial Property Insurance can typically help pay for repairs, replacement of damaged contents and more. “That is a pretty standard coverage,” Cuyler said, adding that trees are the most common type of falling object.
Falling objects are also a common coverage on broad-form Commercial Property Insurance policies in Canada, Campbell said. When this type of loss occurs, it is important for business owners to move quickly to limit any further damage.
“The first thing to think about is ensuring the potential peril is no longer there,” Campbell said. “Take an assessment of the damage and make sure that you are protecting your assets from further loss, and then call your insurance company.”
One ‘unique loss’ could jeopardize business
According to the Insurance Information Institute, incurred losses for Commercial Insurance totaled $222,488,074 in 2023. Although damage caused by unknown falling objects may be uncommon, sudden, and unexpected losses are not, Cuyler said. If a business suffers a loss and needs to temporarily close while repairs are made, lost revenue and continued payroll expenses can add up quickly, making Business Interruption coverage a key component of Commercial Property Insurance.
“It is the kind of thing insurance is designed for: a unique loss to an individual insured that could put their business in jeopardy,” Cuyler said. “Restaurants, for example, operate on such a thin margin that they often end up closing for good when they are temporarily unable to operate.”
Restaurants, for example, operate on such a thin margin that they often end up closing for good when they are temporarily unable to operate.
Commercial Property Insurance can also respond to damage caused by severe weather events, fire, vandalism, theft and more. Small businesses may be particularly vulnerable to the impacts of these incidents, in part because they are more likely to be uninsured, Cuyler said.
“Small businesses are definitely more likely to forego certain coverages on their Commercial Property Insurance. The most common scenario we see is removing wind and hail coverage, especially when an insured does not have a lienholder on the property,” he said, adding that a market softening in recent months could help reverse that trend as insurance becomes more affordable in some cases.
“For small business owners, it is important to have an insurance policy in place to have that layer of protection,” Campbell added.
Understanding your policy
When purchasing or reviewing Commercial Property Insurance, business owners should work with an experienced broker to understand their risks and how they can be addressed. “There are a lot of misconceptions about what is covered and not covered,” Campbell said. “They should make sure their insurance policy actually covers what is important to them and that they understand the wording of their policy.”
There are a lot of misconceptions about what is covered and not covered [by Commercial Property Insurance].
The biggest misconception “is thinking that the policy is going to cover everything, when really it does not,” she said.
“The individual perils and exclusions need to be read to make sure that the policy is fully understood,” Campbell said. “Work closely with your retail broker to make sure you are asking the right questions so that if something can be covered, then that coverage has been requested on your insurance policy.”
While many losses cannot be prevented, commercial property owners are encouraged to trim back trees, update electrical and HVAC systems, ensure their roof is in good condition, and utilize security systems. “You also want to deal with a local, long-established broker or agent,” Cuyler said.
Security cameras are also recommended, Campbell said, as the recent mysterious “fireball” incident in New Jersey underscores. “Having cameras is a great tool for insurance purposes and your own personal purposes,” she said. “With a camera, it can provide a timeline to the incident and what actually occurred.”
