With about three weeks to go, the 2019 Atlantic hurricane season has been less active than recent years — yet it still has more named storms than the historical average, according to The Weather Channel. However, even an inactive hurricane season can produce storms that cause widespread destruction.
According to FEMA, nearly 40 percent of small businesses never reopen following the effects of a natural disaster. Preparing for natural disasters is essential for any business owner or manager. We will not review every aspect of disaster preparedness here, but instead focus on an insurance solution: business income insurance.
A business income insurance policy allows the policyholder to recoup lost assets and income caused by a covered loss, such as Hurricane Dorian. If a business had been heavily damaged by the hurricane and closed temporarily, they could file a claim for their lost income during the storm and the time it took to return to normal operations. This allows small businesses that normally would shut down operations for extended periods of time to weather the storm and return to business upon its conclusion.
When considering a business income insurance policy, there are several important steps small business owners should take, with the help of their insurance agent or broker. In order to receive adequate coverage, they need to provide accurate income numbers to their insurer, based on recent history and peak seasonal values. This helps provide an accurate projection of lost sales for the duration of the storm. To that end, management should estimate the total sum of expenses, particularly continuing expenses such as rent, utilities and payroll. Lastly, business owners should project their maximum income loss, extra expenses and the cost of restarting business in the aftermath of a storm.
Hurricane season causes significant damage to businesses across the country, in addition to forcing many small businesses to close. As winter storm systems begin to threaten the northern parts of the country, business owners everywhere can take this reminder to be prepared with proper insurance coverage, including business income insurance.
For more information regarding Brownyard’s business income insurance coverages and how we can help you, talk to your insurance agent or visit https://brownyard.com/insurance-programs/.
Kathy Lopez, Account Manager for SASSI, the Salon and Spa Specialty Insurance program at Brownyard Group. She can be reached at klopez@brownyard.com.
