Lessons from a Perilous Year

In retrospect, 2011 was a formidable year for catastrophes. Some of the most newsworthy and costly events included a devastating tornado and widespread river flooding in the Midwest, several wildfires in the Southwest, and Hurricane Irene’s ravaging of the East Coast.

Small businesses can be hit hard when extreme weather comes to town. In fact, at least 30% of small businesses have been closed for 24 hours or longer in the last three years due to a natural disaster.¹
Small businesses with thoughtful disaster plans and adequate insurance protection may be in a better position to reopen their doors after the “storm” passes. Here are a few ways to help reduce uninsured losses if your business is affected by a disaster.

Filling Insurance Gaps

• When crafting your disaster plan, schedule annual insurance reviews to make sure your coverage is keeping up with company changes. Updating your policy is especially important if you have expanded or purchased new equipment.
• You may have a choice between a standard policy or special coverage that is more comprehensive albeit more expensive. For an extra cost, additional property coverage may provide for pricey exterior items such as fences, signage, or awnings, which may be vulnerable to wind damage.
• Keep in mind that floods are usually excluded from business owner policies, but coverage may be available from the government’s National Flood Insurance Program or some private insurers. There is a 30-day waiting period before a flood policy takes effect, so it’s not a good idea to wait until the threat is imminent to purchase one. (Earthquakes and terrorism are also typically excluded.)
• Finally, keep an accurate inventory and take photos of the premises and all of your business property, and store them online for an extra layer of protection. Good documentation may help speed up the claims process and reduce the risk of a dispute with your insurer.

1) Insurance Information Institute, 2011

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek advice from an independent professional Naperville Insurance advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright © 2012 Emerald Connect, Inc.