DISASTER PLANNING FOR SMALL
Tornado. Wildfire. Winter melt. Hurricane. Flood. Across the country, springtime can bring all kinds of potentially damaging weather. Now is the time for small business owners to get prepared for the possibility of disaster by reviewing their business insurance needs and policies. Because you never know when disaster will strike, here’s a checklist from the National Association of Insurance Commissioners' (NAIC) Insure U for Small Business education program to get your review started.
» Is your business ready for disaster?
» Minimize your insurance risks by:
»Review your insurance needs and your current policies.
Your property insurance policy covers you for damage or theft of the physical property and equipment of your small business. If you own the physical structure of your business address, your property insurance should cover both the structure and its other assets. If you lease the space you occupy, you are responsible for insuring your personal property/contents. As a leaseholder, you need to have a contingency plan in case your landlord or your landlord’s insurer is not able to promptly repair the building where your business is located.
» Here are a few things you should know about your property insurance policy:
Business interruption insurance covers lost earnings due to circumstances stated in your policy – such as fire or hail – that shut down your business for an extended period. Business interruption/continuation insurance covers expenses associated with running your business, like your payroll and utility bills, based on your company’s financial records. Business interruption/continuation may also help pay for the extra expenses to keep your business in operation until you recover.
» A few things to check in your Business Interruption/Continuation policy:
Liability insurance, also called Commercial General Liability (CGL), covers four categories of events for which you could be held responsible: bodily injury; damage to others’ property; personal injury, including slander and libel; and false or misleading advertising.
» Here are a few things to know about your CGL when preparing for a disaster:
Workers’ Compensation Insurance
Workers’ compensation insurance protects a business owner from claims by employees following a work-related injury or illness. It generally covers an employee’s medical expenses, rehabilitation costs and lost wages. Most companies are required to carry workers’ compensation insurance. Check with your state insurance department [http://map.naic.org] to see if your small business is required to have this coverage.
» Use this checklist to help keep your workers safe:
Commercial Auto Insurance
Automobile liability insurance – required by most states – covers medical expenses for injured persons and damages to the property of other individuals as a result of a motor vehicle accident caused by the insured’s negligence. Typically, commercial auto insurance policies have higher liability limits than a personal auto insurance policy. They also may have provisions that cover rented and other non-owned vehicles, including employees’ cars driven for company business.
» Here are a few things to check in your auto insurance policy:
Insurance choices can be some of the most confusing and stressful decisions when starting a small business or managing the growth of a company. Get help understanding your insurance choices from Insure U for Small Business. Go to www.InsureUonline.org/smallbusiness for tips and considerations on: Workers’ Compensation insurance, Business Property and Liability insurance, Commercial Auto insurance, Group Health and Disability insurance, Group Life and Key Person Life insurance and for insurance needs of Home-Based businesses.
If you have questions about business insurance requirements in your state, contact your state insurance department. Get contact details for the state departments of insurance at http://map.naic.org.
Don’t be a victim of insurance fraud! Before you sign a contract or write a check for coverage, STOP. CALL your state insurance department and CONFIRM that the agent and company you are working with are licensed to do business in your state.
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners
(NAIC) is a voluntary organization of the chief insurance regulatory
officials of the 50 states, the District of Columbia and five U.S.
territories. The NAIC has three offices: Executive Office, Washington,
D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office,
New York City. The NAIC serves the needs of consumers and the industry,
with an overriding objective of supporting state insurance regulators as
they protect consumers and maintain the financial stability of the
insurance marketplace. For more consumer information, visit insureUonline.org.
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