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Business income and severe weather events



  Insurance Insurance Courtesy of iii.org

Courtesy of iii.org

With predictions of an above average hurricane season issued by Colorado State University this week, companies must take steps to prepare and increase their chances of survival , according to the Insurance Information Institute (III).

Forty percent of businesses do not reopen after a disaster and another 25 percent fail within a year, according to the Federal Emergency Management Agency (FEMA). But by taking action now to prepare, companies can increase their chances of getting back on their feet financially and keeping their doors open.

I.I.I. and the Insurance Institute for Business & Home Safety (IBHS) recommend the following steps:

Develop a business continuity plan

Having a business continuity plan is crucial for companies to be able to prepare, survive and recover from a hurricane. Use IBH's free OFB-EZ® (Open for Business) Continuity Planning Tool to create a plan that focuses on recovering from the first emergency. Share your plan with employees, assign responsibilities and offer training so that your staff can work together in the recovery of your business. Do regular exercises to assess and improve the answer.

Keep key information out of

To get your business up and running as quickly as possible after a disaster, you need to have access to critical business information. In addition to backing up computer data, keep other critical information outside the site, such as your insurance policies, bank information and telephone numbers of employees, key customers, suppliers and suppliers, your insurance staff and others. If you have a spare seat, make sure it is far enough away not to be affected by the same risks that threaten the primary seat. Use IBH's free EZ-PREPTM emergency response and tool planning for response planning with checklists that can be customized for your business to make sure you have a well-organized plan and are ready to respond when disasters occur.

Create a company inventory

Include all business equipment, accessories and goods ̵

1; and do not forget commercial vehicles.

Review your insurance coverage

Time to review your insurance is before the disaster strikes and you must file a claim. It is important that your company has both the right amount and type of insurance for its needs and risk profile. There are two types of insurance you can buy as a business owner:

A Business Ownership Policy (BOP) is commonly used by small businesses. BOP policies combine property and liability insurance into one insurance policy and are usually less comprehensive than a commercial policy.

A commercial multi-risk (CMP) policy combines several areas of protection – such as commercial property, liability, inland navy and commercial vehicle – into a single policy. It is usually cheaper to buy a CMP insurance than to buy the cover individually. a combination of both. Reimbursement cost coverage will pay for rebuilding or repairing properties, based on current construction costs. Actual cash value coverage will pay to rebuild or replace the property minus depreciation. Depreciation is a decrease in value due to wear and tear or age. If your business is ruined and you only have real cash value coverage, you may not be able to rebuild completely.

Think about tenant coverage

If you rent or rent a building, consider tenant. coverage, which insures your local property, including machinery, furniture and merchandise. The building owner's insurance does not cover your contents.

Do not forget flood insurance

Floods are not covered by standard commercial insurance, so consider purchasing a separate flood policy. If you are in a flood zone with high to moderate risk, you can protect your business from devastating financial losses. Commercial flood coverage is available from the National Flood Insurance Program (NFIP) and provides up to $ 500,000 in building coverage and $ 500,000 for content. You can also get coverage through private insurers.

Visit the Insurance Section in I.I.I. website for more information.

RELATED LINKS

Facts and Statistics: Disasters

Articles: When Disaster Strikes: Preparation, Response and Recovery; Does my company need flood insurance?

SOURCES:

Colorado State University

Insurance Institute for Business & Home Safety

National Flood Insurance Program

National Hurricane Center

Seasonal Hurricane Predictions

Small Business Administration


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