Disaster Planning Insurance – Part Two

shutterstock_54723730(This is an installment of Risk Management 101, a series of blog posts exploring AssuredPartners NL’ Risk Management offerings. To learn more about AssuredPartners NL’ approach to Risk Management, please click here.) 

 

Safeguarding your business from disaster is a necessary precaution. While you practice drills and prepare procedures, disasters are just a factor that you cannot control. However, you can mitigate the damage a disaster could have on your organization with fully comprehensive insurance coverage.

While we looked at mainly environmental and weather-related insurance coverage last week, read on to learn about other coverage areas to consider:

 

1. Have you filled out a business income worksheet?
Property insurance is recognized as covering your ‘bricks and mortar’ and your ‘stuff’. While it’s true that your building and contents are covered, the equally important business income coverage is often overlooked or under appreciated. While your building is being rebuilt, you’ll still have ongoing expenses that must be paid, like the mortgage or lease, utilities, salaries and property taxes. A business income worksheet takes a little time to understand and complete properly, but if you ever need the coverage, you’ll be very glad you did it correctly. Also, be sure to check into the insurance requirements of all vendor and payer sources.

 2. Are you covered by an extended period of indemnity?
After a disaster, your income is likely to suffer for months. A mini-mart’s sales may return to pre-loss levels within a couple of weeks after reopening but other organizations, including senior living facilities, can take much longer to recoup. Don’t shortchange yourself—discuss the extended period of indemnity option with your agent.   

3. Have you considered extra expenses?
Extra expenses are the costs you incur immediately after a loss, which help minimize damages to get you back in operation sooner. Expenses could involve moving costs to relocate contents from a damaged structure and storing them at an offsite location until rebuilding is completed. You may need to lease temporary space for a short period of time with unfavorable lease terms. You may need to pay extra to expedite shipping of a key item that will get you back in business sooner or pay overtime. Worksheets are available to help get you thinking. Resist taking shortcuts or you could end up paying for it when you can least afford it.

 4. Is your property insurance appropriate?
Lightning can be beautiful in the distance but deadly up close. Even if it doesn’t cause a fire at your building it can wreak havoc on sensitive electronic equipment. Surge protectors will help in many cases, but they aren’t 100 percent effective. If you suspect damage to some of your electronic equipment following a storm, check all your equipment out as soon as practical. Loss of some equipment can be inconvenient, loss of other equipment can be life threatening. Check with your agent to be sure your property insurance coverage is appropriate.  You may want to consider an inland marine policy for some items rather than relying on traditional property insurance.

Have you taken steps to protect your business from a disaster? Talk to your insurance agent and discuss these coverage areas before your next insurance renewal to make sure your business is safeguarded from disaster. To read part one of the disaster planning installment, click here. To learn more about protecting your business or to contact an agent, visit: AssuredPartners NL CORE Solutions.

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