Have you considered how you would manage if a fire or other disaster damaged your business premises? To quickly resume business after a disaster, business interruption insurance is key. Here are a few things you should know about this essential coverage:
- Business interruption typically covers loss of income and continued business operation expenses.
- There is generally a 48-hour waiting period after the loss before coverage is effective
- Think about the amount of time you will need to get your business up and running again, and consult with your agent to make sure your limits are sufficient.
In the event of a natural or man-made disaster, have a plan in place to execute the recovery of your business. Here are some tips for developing a plan:
• Client retention plan
Decide on a communications strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, e-mail, or regular mail; place a notice in local newspapers.
• Back-up resources
Consider the resources you may need during an emergency. Do you need a back-up source of power? Do you have a back-up communications system?
• Business-to-business coordination
Even if your business escapes the physical damage of a disaster, your operations may suffer significant losses due to the inability of suppliers to deliver goods or services, or from a reduction in customers. Businesses should communicate with their suppliers and markets (especially if they are selling to a business as a supplier) about their disaster preparedness and recovery plans so that everyone is prepared.
• Protect your building
Conduct regular inspections of your business property to identify potential hazards. Look for signs of defective electrical wiring, leaky gas connections, and structural defects. By identifying hazards ahead of time and making necessary repairs, you can reduce the threat of injury or death and minimize property damage in the event of a disaster.
• Continued business activity
Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you would require to run the business at another location.
For guidance on generating your business recovery plan, check out the Business Recovery Checklist at www.fema.gov.
The coverages discussed herein are for illustrative purposes only. The terms and conditions of your specific policy may differ from those described. Please consult the provisions of your policy for the terms, conditions, and exclusions that apply to your coverage.