Business owners work hard to keep their business flourishing and invest substantial cash in such enhancements, such as: advertising, staffing, security, training, etc. But what happens when you are faced with the unexpected? You may want to consider how your business would be impacted from such events as:
- Severe weather
How is your business’ financial stability affected? Can your business continue after such event? Alternatively, a simple slip and fall on your premises can turn into a large injury claim. The good news is you can minimize your risk by carrying proper business insurance and by implementing some simple strategies on your own.
What to Consider When Searching for the Right Coverage
- General liability (coverage for bodily injury or property damage (BI/PD) to a third party): Although liability coverage provides protection against BI/PD, the most important way to deal with many incidents is to prevent them from happening in the first place. For example: proper signage for wet floors, proper signage for exit signs, fix loose railings/stairs, have safety/evacuation procedures in place, etc. Small steps in safety ahead of time can prevent huge headaches later.
- Business property (coverage for building, equipment, stock, office contents, tools, etc.): Is your building insured to value? Does your policy have a co-insurance clause? Are you aware of how this may affect you in the event of a loss? If your property is not insured to value, if faced with a loss, you may be subject to a co-insurance penalty. Check with your insurance agent to better understand your coverage or read through your policy.
- Business interruption (coverage against the loss of income to a business): So, you’ve suffered a loss and your insurance policy covered your property damage losses, but your business operations were down for three months. Have you thought about the impact of not being able to operate your business for a period of time? Can your business survive three months without generating revenue, or can your business recover from being nonoperational for that amount of time? The time to consider this is BEFORE you’re struck with an emergency. There are many options for business interruption coverage that suit the unique needs of your business. The best way to find out what will benefit your business in the event of a loss is to speak to your insurance broker.
There are many types of insurance programs to protect different types of operations and their levels of risk, but as a business owner, the minimum coverage you should have in order to protect yourself is to carry General Liability and Commercial Property. Finding the right insurance professional to provide you with expert advice is also very important.
Did you know?
If you run a home-based business, you need business insurance coverage which is different than personal coverage. Be sure to check your home owner’s policy for what is covered, as business-related contents are not usually included. If you rent, check with your landlord to ensure you can operate a business from home, and ensure you have specific business insurance to cover business activities or supplies in your home.
Minimize Your Risk: Build a Recovery Plan
While it’s important to ensure you have insurance coverage to protect you and your business, there are several steps you can take to reduce the impact of a disaster to your business operations. You play a very important role in minimizing your risk and exposure by implementing and practicing your own catastrophe recovery plan. Here are a few things to include in your plan:
- Install a fire and burglar alarm
- Maintain a clean premises and repair any faulty items that may give rise to a claim
- Remove hazardous/flammable materials from premises and dispose of them responsibly
- Clear snow outside and keep floors clean inside, to avoid slip and fall claims (the most significant claims are slip and falls)
- Keep a first aid kit
- Keep a list of important phone numbers: police, your insurance company, 24 hr claims service, ambulance, fire department, etc.
- Keep copies and/or back-up of your business records and all your important documentation
- Keep your insurance broker posted of all changes to operations, property, and any incident that may give rise to a claim
By managing your risk, you are helping to ensure your business’ continuity and financial success. Thinking about possible impacts on your business in the event of disaster BEFORE it happens is the best time to prepare, rather than waiting until an emergency strikes. It doesn’t have to be a daunting task, as some of the tips mentioned above are very simple and inexpensive to implement. When in doubt, consult with an insurance broker for advice.
Want to learn more about business insurance options available to you? Check out the Insurance Bureau of Canada or contact guest author Evelinne Teichgraber at Caliber Insurance Brokers Ltd.