Gables Assurance Group

5 Business Insurance Gaps To Patch Before Disaster Strikes

From a family-owned winery to a growing startup in Silicon Valley, it can be difficult enough for a company to keep up with the daily demands of running a business, let alone remember to update their insurance.

As a result, businesses tend to overlook certain areas of insurance coverage. The beginning of the year is a great time to review your policy and ensure your business is protected. As those policies are reviewed, here are five things for business owners to consider:

1. Business Income Coverage

Should something happen to your business, you may think you’ll close up shop for only a week or two. Unfortunately, business owners tend to overlook or underinsure for this type of protection. While property insurance covers the physical damage to a structure, business income coverage covers the additional costs caused by a business interruption. The coverage is designed to be applicable for all businesses, in order to put a business back in similar financial position prior to the incident.

For example, consider natural disasters, such as wildfires or severe winter storms. Monterey County witnessed this last summer with the devastating Soberanes fire, cited as the most expensive wildfire in United States history. Powerful winter storms have flooded the region already this winter while heavy snow hit the Sierra Nevada and triggered an avalanche just west of Lake Tahoe. And that’s just the short list.

When damage occurs from these instances, reconstruction or repairs can take much longer than expected due to stretched resources. Your business needs to be covered for that loss of time and lack of income. Consider permit acquisition, municipal building inspections, and supply and contractor availability. This must all be considered, when insuring for loss of income.

2. Building And Ordinance Coverage

Business owners who own and operate older buildings, this one is for you. While it’s easy to underinsure or disregard this coverage, it’s a good idea to reconsider. Depending on the age of your building, municipal building codes can require extensive updates to an entire building even if only a portion is damaged. For the best protection, and to avoid additional out-of-pocket expenses to rebuild, you should add the cost of updating the entire building when you purchase insurance.

3. Umbrella Coverage

Business owners should consider umbrella liability coverage to add an extra layer of protection. The umbrella of liability is essentially a safety net in the event of a large claim and when your existing policies require extra limits to cover the unforeseen costs. Usually for only a fraction of the cost of the package or auto policy, you can extend their liability coverage dramatically by adding this. The coverage provides extra protection, and can be tailored to the needs of different business types.

4. Business Name Change Or Reorganization

When a business undergoes a name change, rebrand or reorganization, it’s important to update the insurance policy to reflect those changes. For example, what if your company transitioned into a limited-liability corporation? Insurance updates will ensure that entity is included for liability coverage and that any checks issued to cover damages are made out to the correct entity. Otherwise, there could be a significant delay in your benefit provisions.

5. Review Your Policy Ahead Of Each Renewal

A best practice for business owners is to review and renew their insurance policy 90 days prior to the start of the next term. Companies should have an established process in place, and maintain a strong relationship with their insurance agent to ensure their policies are updated. The agent should understand the nuances of what makes your business tick and what you need to protect it.

As with any type of insurance, business insurance is there to protect your business for the unexpected. Work with an agent who knows your community and industry, someone who emphasizes personalized, local-decision making and expertise. By doing this, you can have the confidence to take on the challenges of your daily business and hopefully — with more peace of mind.


Source: North Bay Business Journals

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