Many small business owners are still attempting to recover from the recent storm activity on the East Coast and could use some sound advice to deal with their insurance coverage. The first step for business owners who suffered an interruption in service and damaged products and property is to get in touch with their insurance agent. They are more than willing to assist in sorting out the particulars of the policy and help property owners get back on their feet.
Property Insurance and What it Covers
Property insurance typically provides coverage for damage or theft of the physical property and equipment of the small business. Anyone owning the physical structure (the building), their property insurance program should cover both the structure and its other assets.
Anyone leasing the space they occupy is likely responsible for insuring their personal property and other contents. As a leaseholder, there should be in place a contingency plan in case the landlord or their insurer is not able to promptly repair the building where the business is located.
Business Interruption for When a Disaster Occurs
Business Interruption insurance covers lost earnings due to circumstances stated in the policy, such as weather or a fire that shuts down a business for an extended period of time.
Certain events will trigger this insurance that generally covers expenses associated with running a business, such as payroll and utility bills, based on the company’s financial records.
Benefits paid under this type of coverage may not be payable for a certain number of days after the business interruption has occurred, based on the severity of the incident and the number of people and businesses affected. The insurance may also help pay for the extra expenses to keep the business operating until a full recovery is made.
General Planning for Potential Future Severe Weather or Natural disasters
Be sure to consider these issues ahead of a disaster:
- Is there an emergency response plan for employees and customers?
- Are there copies of important papers and information stored off site?
- Does the stored information offsite include: receipts, photos, insurance policies, contact details, employee roster, etc.?
These documents will be of great assistance when disaster strikes, and later, when the time comes to file a claim.
Be sure to review current insurance policies – are policies up-to-date with insurance coverage needs, and are the limits for coverage at a level that protects investments? Speak with a professional insurance agent about the appropriate coverage and be sure to review policies every year.