In the past few years alone, U.S. residents and business owners have witnessed (and recovered from) the devastation caused by hurricanes, tornadoes, wildfires, floods and other forces of nature. One of the most shattering realizations in the aftermath of a natural calamity is the damage incurred by local communities.
Since we’re in the thick of the 2015 tornado season, which typically ranges from April through July, it is important that business owners and residents alike keep severe weather preparedness, safety and recovery top of mind. Beyond the threat of an actual tornado, severe thunderstorms, flooding and damage caused by intense wind combine to make this time of year one of the most costly in terms of insurance claims.
While many focus on the residential side of recovery, an important sector affected by natural disasters is local business. Local businesses support the community, providing a place of employment and the essentials needed to thrive.
Without proper insurance coverage or a suitable crisis plan, it can be difficult for businesses to reopen their doors after a natural disaster and recoup losses from an interruption in operations. In fact, according to the Institute for Business and Home Safety, roughly 25% of small businesses never reopen after a natural disaster.
Business Insider recently reported that one in three business owners have been affected by natural disasters. And, one in four businesses affected never reopen. Why? Because many business owners are not fully aware of what their existing insurance plans actually cover, if they have insurance at all, and assume compensation will be received for areas not addressed by coverages in place.
To help avoid becoming a statistic, make sure you are well informed of the necessary precautions needed to stay afloat in times of crisis.
3 Tips to Protect Your Business Against Natural Calamities
- Invest in the Appropriate Insurance.
There are a variety of insurance policies you should consider to ensure your company is fully covered during a natural calamity. Property insurance covers the damage incurred to company property, such as buildings, expensive equipment, computers and company documents. You can customize your policy to include coverage for certain perils, such as flood and earthquake, which are not included in standard policies.
Business interruption coverage is one of the most important coverages you can add to your insurance package. This type of coverage will reimburse lost income that might have been generated during the interruption of business that follows damage to insured property by an insured peril. Be sure to consult with your insurance specialist to identify the most appropriate solutions for your business.
- Develop a Disaster Plan.
Many natural disasters are unexpected—all are unwanted. So, it is vital to develop a plan before a potential crisis occurs. Important factors to include in the plan are outlined below:
- Decide who will be in charge of notifying employees of the disaster, and which method of contact will be used.
- Identify if there is a backup office arrangement in case the building cannot be inhabited.
- Develop and educate employees on the evacuation plan.
- Prepare the office if time allows. Forward calls from your desk phone to a mobile phone, ensure all equipment is in a secure location within the office, and, if possible, remove any devices from areas near windows and make sure electronics are unplugged.
- Invest in software that will backup essential, sensitive documents that may be lost or damaged during a disaster.
- Decide how customers or clients will be notified of any potential delays in deliverables, and who will be the point of contact for client communications.
Although it may seem as though some of the above factors may be common sense, it is best to not rely on assumptions. Develop a plan in writing, and review the details with employees to ensure everyone knows what to do.
- Stay Up-To-Date.
Your business’ risks and liabilities evolve over time—and so should your insurance coverage plans.
To ensure your business is prepared for unexpected natural disasters, put a plan in place and evolve it as needed. Know where you are covered and where you are not. Appoint a leader to be in charge of reviewing and modifying your company’s insurance coverage plans to confirm that your business has the coverage it needs in case of an emergency.
As a business owner, it is imperative that you understand the level of compensation you would receive in the event of a natural disaster. If you are unable to assume the potential remaining losses, then adjust your insurance now to better align coverages with expectations.
Insurance policies can be confusing, but that is where we come in. Schedule a consultation with one of our trusted experts to ensure that your business insurance adequately covers unforeseen natural calamities.
Is your business covered against natural disasters? Check out our business insurance plans and learn what it takes to get covered.
Image Credit: Kara via Flickr