Insurance Questions for Small Business Owners

After a disaster, can your business recover?


Two out of five businesses that experience a disaster will go out of business within five years. Are you one of those? After an emergency, will your business have the resources to recover?

The best way to make sure you are covered is to talk with your insurance agent. Here are a few questions to get the discussion started:

Does my policy cover disasters? -- You’d be surprised. Most policies do not cover floods, and often many natural hazards are excluded. Make sure you are completely covered.

Tip! Keep copies of all the policies in a safe, waterproof place. Even better, scan them onto your computer and e-mail copies to yourself in a web-based email account. That way, you have access to them from anywhere, anytime.

What are my deductibles and limitations? -- Your coverage has limits – make sure you understand what they are. Also understand how much of the damage you will be responsible for (the deductible) before insurance kicks in to help.

Does my insurance cover only repair, or improvement? -- Remember, your business may have been ‘grandfathered’ under code requirements. When you repair after a disaster, you might need to do so ‘to code.’

How do I file a claim? -- Talk with your insurance agent to understand the process of filing claims. What documentation do you need? Do you need to supply photographs or inventories of equipment?

Tip! In many cases, you do not need to wait for insurance to pay out to make repairs. With proper documentation, you might be able to repair and get back to business while navigating the claims process. Talk with your insurance agent.

Is my business covered for loss of income? How long is this coverage available? How much is available? -- Because you still need to pay the bills, some policies provide coverage for the income you lost during a disaster. This money could pay employees and utilities, repair expenses, vendors, or even advertising costs if you move to a new location. Talk with your insurance agent about these policies and how they could help your business recover.

Do I need flood insurance? -- Most business policies do not cover flood damage. Special coverage is available through the National Flood Insurance Program. Your insurance agent may be able to bind such a policy. If not, call the National Flood Insurance Program’s toll-free number to obtain the name of an agent in your area who does write flood insurance. The number is 1-888-RAIN-924.

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