By Catherine Powell
|Image courtesy Pixabay|
A year after COVID-19 reared its ugly head, business owners are still reeling from its effects. With more consumers staying home, every business from restaurants and travel to retail have found their profits way off. Even many service-based businesses have seen profit margins plummet due to the pandemic. While this health crisis is unprecedented, it isn’t the only disaster that business owners have faced in recent years. Less than four years ago, we in North Florida had to deal with the destruction caused by Hurricane Irma which hit a year after Hurricane Matthew. While some businesses were forced to close their doors after they blew threw town, others were able to weather the storm, especially those who had business insurance. If you own a business and don’t want to be derailed by disaster, let me show you what you need to know.
Who’s driving the bus?
Entrepreneurs like to think they’re in charge of their business. Everything from the staff to the products and the marketing is planned and executed like a military campaign. No stone is left unturned to make sure that the business plan is a roadmap to success. While this is a great way to build a business, what can derail even the best-laid plans is to be confronted with the unexpected:
1. A fire can damage or destroy your office or warehouse.
2. A storm can flood your business.
3. An earthquake or tornado can cause destruction.
4. A client can get injured while on your property.
5. A customer can be injured by one of your products.
6. Your computers can be hacked.
7. You can be sued by a disgruntled client.
How business insurance helps you deal with disaster.
Image courtesy Pixabay
While nobody can foresee the future, what business insurance can do is help you deal with disruptions that can occur without warning. That being said, what would happen to your business should disaster strike? Who would pay the rent and your employees if something beyond your control were to shut your business down for weeks or months? Do you have the financial resources to defend your business in court, or to pay a substantial judgment against it? Business insurance is designed to help owners deal with unexpected problems that can damage a company’s ability to survive disruption.
1. Property damage coverage can help you repair or replace furnishings, electronics, inventory, and even the structure in which your business is located.
2. General liability protects you should a customer be injured while on your property.
3. Worker’s Comp covers you for work-related accidents that happen to your staff.
4. Product liability can make sure that a product defect doesn’t cause your business to shut its doors forever.
5. Errors and omissions help you rebound from a costly error by you or your staff should a client sue you for harming their business due to something you or your staff did or did not do.
6. Cybersecurity insurance is there to help you deal with everything from data loss to ransomware that can disrupt your business or even result in a lawsuit by your customers.
7. Business interruption insurance makes sure that you can cover business expenses should your business be shut down due to unforeseen circumstances.
What kind of coverage is best for your business?
Image courtesy Pixabay
With so many different kinds of potential calamities to deal with, some business owners fear that getting covered is going to take a big bite out of their bottom line. This couldn’t be farther from the truth. In fact, in an effort to simplify business insurance for small businesses, the insurance industry has developed a policy that’s designed to bundle a variety of coverage in one cost-effective package. It’s called a Business Owner’s Policy, otherwise known as a BOP. While this package isn’t a one-size-fits-all policy, for many businesses it’s a good fit. Does your company:
1. need multiple kinds of insurance coverage?
2. use your cars or rent cars for business purposes?
3. lease computers, office equipment, and/or furniture?
A BOP is designed to cover a business from losses due to property damage, liability issues, and business interruptions. This kind of business insurance can also be augmented to include additional coverage such as theft, forgery, commercial auto coverage, flood insurance, and inventory spoilage. Even cyber liability insurance can be added as an endorsement with some carriers. What it doesn’t include is worker’s comp, professional liability, health or disability insurance. Still, if your business qualifies, a BOP could simplify many of your business insurance needs in one policy. The only caveat is that when it comes to the qualifications for a Business Owner’s Policy, insurers put limits on the size, class, and revenue of a business.
Does insurance cover losses due to pandemics?
While a BOP and other commercial business insurance policies offer a great deal of coverage, there’s little you can do to insure your company against contagion. That’s because there are currently no insurance products available to cover a business from losses due to pathogens such as COVID-19. The reason for this is that the risk of pandemics is difficult to assess and price. But that doesn’t mean that insurance companies won’t offer such policies in the future.
In the meantime, if you’re looking to find out more about how business insurance can protect your company from unforeseen calamities, call your insurance agent today.
Catherine Powell is the owner of A Plus All Florida, Insurance in Orange Park, Florida. To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com/