There are countless challenges that business owners tackle daily. From payroll and cash flow to competition and everything in between, business owners face several issues and risks head-on each day. While businesses often find themselves pouring their abilities and finances into the actual business itself, possible future damage to the building or business usually takes a backseat until it’s too late.
Here are 4 ways that businesses are typically uninsured or underinsured:
Damage From Certain Natural Disasters – While businesses probably have some sort of insurance policy in place against most major natural disasters, certain disasters may not be covered. It isn’t unusual for floods and earthquakes, for example, to not be covered on standard insurance policies.
Coverage for Lost Business – Often called business interruption coverage, this is usually an add-on to a business’s insurance policy. Business interruption coverage needs to be discussed with a certified agent in order to determine how much a business may need. The amount of business interruption coverage needed varies widely depending on the type of business you have and boils down to whether your business can operate in the event that it is damaged.
“One of the most important reasons to have business income coverage is so you can continue to pay your key employees,” said Darren Helmkamp of Weiss Insurance. “Nothing hurts a business more than losing its best employees during a 6-12 month restoration process, then having to restart with employees learning the job for the first time.”
High Deductibles – Many businesses carry high deductibles on their insurance in order to save money. Before you decide to do this, however, you need to be sure that you are prepared to pay the deductible in the event of a disaster so that repairs can be made and completed soon.
“Insurance carriers are placing separate wind and hail deductibles on property policies such as 1% or 2% deductible,” Helmkamp said. “The percentages are most often higher than all the other perils deductibles. While it doesn’t sound like much, you will want to be sure to do the math and ask your insurance representative about lower deductible options.”
Damage Caused by Owner or Employee – With so many things on our minds, it can be quite easy to become distracted in the workplace. Something as innocent as accidentally driving a delivery vehicle into a retaining wall or leaving the faucet running overnight can cause quite a bit of damage. These accidents should be covered as well. “Remember to read over the exclusions on your policies with your agent and have a discussion to evaluate if those exclusions could negatively affect your business,” added Helmkamp.
Because each industry is unique and has different needs, it’s important that business owners talk to an insurance agent who is well-versed in your industry. The needs of for-profit businesses and non-profit businesses are incredibly different, for example, and the needs of a Fortune 500 company can be incredibly different from a small-town business. There are often specialty companies and policies for many industries that will cover the very specific needs within your industry.