Insurance do you have the right insurance and it is enough?
We need to take time out from our normal blogs to talk about small businesses and the insurance coverage that many have and what is missing. When businesses call us it is usually because of an emergency situation. Of all the calls we get 50% of businesses will not reopen. Of the ones that do reopen most of them had an emergency plan in place as to how they will respond to the disaster and who to call. These disasters are costly in so many ways, another reason for an inability to reopen is the lack of the proper insurance that will cover all aspects of the business. Business insurance is not just one form of insurance it is an overall assessment of the type of business you do and what risks are involved with that and that area in which you work.
Let us dive into this a little bit more. What is a business, it is your livelihood, the way you provide for your family and its needs. The home that you live in, the food you eat, and the fun things you do together. Beyond just a business, it is your way to make your community better through job creation, solving a need within the area for your products and services. As well as a way of giving back to those less fortunate. Making sure all of these things are protected is important and while many of us look at insurance as scam or a requirement that is never used, talk to someone that has had a major life event and you will see it more than pays for itself with even just one problem.
Most business owners will obtain the lowest amounts of insurance coverage with a high deductable. This is due to the vast scope of the requirements. The main types of insurance required are general liability, Automobile, workers compensation, professional liability, Directors and officers insurance, data breach, home owners, renters, and life insurance. This sounds pretty inclusive right, very very wrong there are a few important insurance policies missing. Crime or Fidelity Insurance and business interruption insurance are very important.
What happens if there is a riot in the area and your business is looted and burned to the ground? Too extreme ok what if your business is robbed? These are crimes and without crime insurance could be your responsibility fully. How much money was taken, how much damage to the property did they cause, were your employees present and what lasting effects will they have from such a traumatic event? Still to unlikely for your business…Ok what about if some kids on a dare break in and graffiti the inside of your facility and leave a mess for you to comb through. Crime or fidelity insurance will protect you from this sort of damage. Of course no one thinks this will happen to them but if it does and a lot of damage is done it can put you quickly out of business.
Business interruption insurance. What is that you ask? Taking more of a look at what we said earlier about your business it is the way you make money. That can only be done when you are open for clients to come and partake in your services or buy your products. Many times a major event such as damage from storm or pipe burst can take more than 30-90 days for you to get back to normal. Do you have enough in reserves for your overhead to be covered for an extended period of time.
Should a major event cause you to close how does your money continue to be generated? How do your employees continue to be paid? Who is going to pay your bills?? If your employees will not be working for an extended period of time and they are a great staff will you lose them? They have bills to still pay and may not be able to afford to wait around for things to settle down. Business interruption insurance allocates for all of these things.
Businesses Owners Policy packages tend to have bundled insurance for all of your needs and can be customized based on the type of business you have. Bundles tend to save you money and allow for the fullest scope of coverage needed. Speak to your insurance broker today if you are not sure about the adequacy of the coverage you currently have. Being prepared is more than just having a plan, and knowing what to do. It is having everything in place and having the proper coverage before you need it.