No matter where your business is located, you’re likely to be impacted by natural disasters. The midwest and the South are impacted by tornadoes. Ocean states deal with a hurricane season. Businesses in California have to be wary of wildfires. Do you know if your business insurance covers these natural disasters? What insurance might you need to fill any existing gaps in your policy(s)? How do you help your employees prepare for natural disasters?
Types of Natural Disasters You Should Protect Against
What natural disasters should your small business account for with business insurance?
According to the National Severe Storms Laboratory, tornado season encompasses a chunk of the year. Peak season for tornadoes in the southern plans is May-June but in the Midwest (think Minnesota and the Dakotas) tornadoes are more likely in June-July. The gulf coast is normally impacted in the spring. But tornadoes are possible ANY time of the year.
If you live and operate your business in states or regions that are commonly affected by tornadoes, you need to make sure you have the proper commercial property insurance. You might also want to consider commercial auto insurance to protect your vehicles. Above all, make sure you have a disaster preparedness plan in place:
- Somewhere safe for you and your employees to seek shelter
- Make sure your businesses data and important invoices are backed up
- Have a plan in place to have your employees work remotely, if possible
The Atlantic hurricane season runs from June 1st to November 30th, with some unexpected outlying storms here and there. When most people think of hurricanes, devastating storms such as hurricane Katrina that all but destroyed New Orleans come to mind. Every year hurricanes impact the southern states and islands.
If you live somewhere where hurricanes frequent every year, you need to make sure your business is properly protected. While hurricanes are NOT excluded from property insurance policies, damage caused by flooding IS excluded. Most businesses damaged or destroyed by hurricanes are because of rising tides and storm surge—AKA flooding. If you are in a hurricane-prone area and a flood zone, you’ll need flood insurance as part of your business insurance package.
You should also consider a business interruption insurance policy. Business interruption protects your business if you’re forced to shut down due to a disaster. It can help cover lost profits, operating expenses, payroll, taxes, bills, and can even help temporarily relocate your business.
Flooding can be common in tropical areas that see heavy amounts of rainfall and devastating storms such as tornadoes and hurricanes. It is often common in areas that receive heavy amounts of snowfall. When spring arrives and the weather warms, those copious amounts of snow melt quickly and often cause flooding. As mentioned above, flooding is NOT covered by most insurance policies. You’ll need to look at commercial flood insurance to protect your business.
Wildfires are common across the United States and Canada, and can occur year-round in states like California. When areas go through droughts and have an especially large amount of forests, brush, etc. the risk of wildfires increases. Wildfires—and fires in general—are typically going to be covered under your commercial property insurance.
You’ll want to consider a Business Owners Policy (BOP), that combines property insurance, business interruption insurance, and general liability insurance. This insurance policy can help cover the cost to repair or replace the damage to your small businesses' building, it’s equipment, and other contents.
Just like you want a disaster preparedness plan for tornadoes, you need an evacuation plan for wildfires. If your business is in an at-risk area, make sure you and your employees are prepared.
When most people think about Earthquakes, they think about the western United States (Californai, Nevada, Arizona, etc.). But earthquakes are also quite common in South Carolina, Massachusetts, and Mississippi. Earthquakes can be mild, or they can be severe enough to compromise the infrastructure of your building.
What are some other things you can do to be prepared?
- Carefully story anything that can cause serious harm if dislodged during an earthquake
- Run earthquake drills with your employees so they know what to do if one occurs
- If you work in an area prone to natural disasters like earthquakes, you must make sure you have adequate property coverage for your business.
Many commercial property policies don’t include coverage for earthquakes. You’ll likely have to add it as a policy endorsement to your standard business owners policy.
How Natural Disaster Coverage Works
Generally, natural disaster coverage deductibles are a percentage of the loss, unlike your business property coverage which will have a set deductible. Depending on the amount of the loss, that can be a significant number. Work with your licensed insurance professional to determine what risk exposures your business has, and how to best manage the risk with a combination of business insurance and separate disaster coverage.
Get an Insurance Quote for Your Business
Speaking with a licensed insurance professional is important before determining what coverage is necessary and how it works in conjunction with your existing insurance policies. What you are trying to accomplish is a combination of coverage and policies which reduces your risk and doesn’t duplicate coverage. You want your premium dollars working for you for the maximum coverage.
At Tivly, we strive to help small business owners find the right insurance at a cost they can afford. To get a free insurance quote for your small business, complete the form at the top of the page or give us a call at 1-877-907-5267. We will gladly help you determine the necessary coverage to protect your business.
Related Articles: Boat Rental Insurance, Earthquake Insurance