Spring and summer weather is here, which means increased threats from wind, hail, tornadoes, and more. Insurance coverage may be more or less straightforward for your personal home, but for a business, it gets more complex and intricate. What happens if the wind blows a hole in the roof and rain destroys your manufacturing equipment? Does insurance cover this? What about loss of revenue while your facility is undergoing repairs? Or if an employee is injured during a storm or from debris? We’ll cover the 3 main threats to your business from the weather and how to get ahead with your insurance coverage.
Threat 1: Not Having Business Income Loss Insurance
Business interruption insurance, also known as business income insurance, is designed to mitigate financial losses resulting from interruptions to normal business operations. Specifically tailored for weather events, this coverage extends beyond property damage to encompass lost revenue, ongoing expenses, and even relocation costs incurred during the downtime.
For example, if a piece of equipment is damaged in a fire, your business would be covered for the loss of income for that piece of equipment being offline. Without this insurance, you may only be covered to replace the equipment, not for the loss of income from it being unusable. Not having the income may be even worse than the loss itself, so be prepared with business income insurance.
Threat 2: Weather Specific Coverage Considerations
Weather events such as hurricanes, tornadoes, floods, and severe storms pose significant risks to businesses and have to be covered differently for many businesses. You may have heard of an area having a torrential downpour of rain in a short period of time, but policyholders are not being covered for a broken window letting water in because it is considered a “flood” event. How your business is covered for specific events in your area is a huge consideration.
Working with a risk advisor who understands not only your business but also your geography and has seen what can happen is critical to ensuring you have the right coverage, coinsurance, and deductible to protect your business. Don’t let gaps in your coverage threaten your business.
Threat 3. Location Coverage
If or when a weather-related event happens, what is the plan for continuing to operate if your building is unusable? Your business may need to relocate or cover operating expenses in the interim. These areas may not be covered under business income insurance, leaving you to make payments or have the cash on hand to cover these expenses. Having a plan and discussing with a risk advisor what your needs and plan will be is important. You may not need the coverage if you have cash on hand or are flexible on where your business operations take place, but you may need to line up a few options and have a disaster plan in place, with enough coverage to cover
In conclusion, here are the three specific areas to consider for your business and weather-related events.
- Lost Revenue: Compensation for the income your business would have earned if it were operating normally.
- Weather Specific Coverage:
- Relocation and Operating Expenses: Reimbursement for ongoing expenses like rent, utilities, payroll, and taxes, even if your business is temporarily unable to generate revenue.
- Relocation Costs: Coverage for expenses incurred if you need to temporarily relocate your business operations due to damage to your premises.
Schedule your free assessment with a risk advisor today. We’re here to help review your current policy for areas to save money, improve coverage, or adjust your business operations and cash flow. We’ve helped businesses all over Ohio with coverage that better aligns with their business needs. See the difference working with our team can make, schedule your free insurance review today!
