Disasters can take many forms but their common element is that they are sudden and unpredictable. How do you know what type of disaster to insure for? You can get liability and disaster insurance for your business from most companies, but not all policies cover all potential disasters. Paying for a policy that covers all of them may not fit your company budget, or be necessary.
The European Commission recently issued a green paper on the insurability rates of natural and man-made disasters that looks to clear up the understanding of what you can insure for specifically, and what a general policy would be your best hope.
Can you predict the future?
Having insurance for your business beyond liability, health and worker’s compensation is very much like trying to foretell the future. How can you know what will happen? A “disaster” policy isn’t offered by insurance companies, but based on your market, you can predict what other types of business insurance will be most helpful to you. The European Commission looked not at the rate of incidences to try and project what may happen in the future, but a different set of criteria.
The green paper reports on which businesses and markets would recover the swiftest if their damage had been covered by insurance, rather than relying on government aid and intervention to rebuild. From there, they have made certain recommendations about the best types of insurance to have in place that will allow for disaster coverage.
Here are a few types of business insurances that can keep you covered in the event of a disaster.
Business Interruption/Loss of Earnings:
This insurance is an option offered on most Property Insurances for businesses. It doesn’t look to specify why the business was interrupted except that it was out of reasonable control. This can help immediately in assuming payments in wages, bills and coverages necessary to be continued even if the business itself has lost its physical location.
Business Owner’s Policy (BOP):
This is the closest to an umbrella policy that is offered to businesses that includes vehicle, property and business interruption insurance. It is not suitable for every business, however, because it may cover too much. If you don’t have a fleet of commercial vehicles, you may not be able to opt out of that addition in coverage.
Commercial Property/Vehicle Coverage:
Many business owners make the mistake of thinking that their rental or lease agreements and insurances will be enough to cover their equipment in the event of a disaster. If you lease, it is wise to carry a separate policy from what the leasing company offers to protect your business should a disaster interrupt your earnings or damage the equipment. For those who own property and equipment, a policy addition that specifically addresses their coverage is wise.
As seen on Confia Insurance Agency, Business Insurance is not a single commodity that you can purchase and have all your bases covered. By thinking through what potential problems your type of business, and market, may encounter you will be prepared.
About the Author: As the asst. administrator for an search engine marketing business, Daniel toils as a visiting poster to assist corporations from the Mother Land. He lives in SoCal, and is drinking in these times along with his pleasant wife and three munchkins. D-to-the-H requests sightseers to look at his Google society when they can.
