It is a sad fact that 40% to 60% of businesses never reopen after a disaster. An unplanned emergency sends most businesses spiraling into a place in which they can never recover.
Do you know how to prevent this from happening to your business?
One way is with the right insurance. Here, we discuss nine reasons you need business hazard insurance to protect your company in the case of an extreme emergency or natural disaster.
1. It’s the Law
Most states now require that your business has insurance, be it a small business or a large one. When you are establishing your business, you need to check the requirements set out in your jurisdiction regarding this.
However, even if you are not required to have it, don’t write it off. There are a whole host of legal situations in which you could be responsible for out of pocket expenses. Business Insurance is important not only to protect your property but also if a customer gets injured on your property.
2. Hazard Insurance Adds Credibility
People will always feel more comfortable dealing with a credible business. Even a cheap business insurance package gives you more of an air of professionalism compared to an uninsured business. It shows that you do not cut costs and care about safeguarding your business as well as your customers and clients in the long term.
For example, put yourself in the place of a customer who needs to have repairs done on their roof. One company advertises that they are fully insured and certified, the other does not. Which one would you trust?
The obvious choice is the insured one. If an accident occurs, then the legality of what is covered and does not impact the customer. It’s important to note that hazard insurance can be comprehensive or could only cover the building. Either way, it still gives employees and consumers the impression that a company is dedicated to long-term planning.
It is not just customers who will notice and appreciate this either. Insurance adds credibility to potential employees, showing you care about the welfare and wellbeing of your staff.
3. Hazard Insurance Offers Peace of Mind
As a business owner, you will often have a lot of things weighing on your mind. With small business insurance safeguarding you against hazards, you no longer need to worry about the damage that could potentially come your way with any given storm.
You don’t have to be in in areas that are prone to natural disasters for this coverage to be essential. Time spent worrying about what you cannot control could be time spent building and growing your business.
4. Hazard Insurance Can Protect Against Various Disasters
When written properly, Hazard insurance for your business can cover you and your property against various disasters. Common hazards include hurricane, flooding, tornadoes, fires, lightning, and theft. It’s important to discuss other optional coverages with your Agent.
5. Hazard Insurance Can Protect Against Lawsuits
What if a natural disaster struck your facility and you were housing property that was not yours? Perhaps something was on loan or had been purchased and was ready for delivery? In these incidents, who would foot the bill?
Hazard insurance can back you up in these tricky situations. When the fault does not seem to lie with anyone, it is crucial to have legal counsel to determine who pays the damages. Insurance can do this, so you don’t have to be out of pocket.
6. Hazard Insurance Can Protect Your Mortgage
If the property you run the business from is your own, you might be paying it off with a mortgage. When disaster hits, you would still be required to carry on paying for the amount that you borrowed. This could be the case even though your business is not earning income at that time.
Generally, a homeowner policy could be sufficient to cover you in this instance. However, some jurisdictions may require you to have full hazard insurance. In addition, some lenders may not grant you a loan without first securing insurance to protect their interest in your loan. If you’re starting to do the math, good! You will quickly see how invaluable hazard insurance is to covering all aspects that you are responsible for as a business owner.
7. Hazard Insurance Works Even in Prone Areas
Some areas are so prone to natural disasters that they are exempt from standard policies. For example, properties near rivers that flood regularly may have flood insurance excluded from their standard policy. In these instances, it is possible to get a specific type of hazard insurance for any kind of disaster.
Other incidences could be areas that are prone to sinkholes or earthquakes on fault lines. Perhaps you are on a beachfront that faces regular hurricanes. In these times, it is not a case of if the hazard insurance will be worth it, but when.
8. Hazard Insurance Can Scale Up or Down
The amount of hazard insurance you need can be scaled up or down. Generally, you need an amount that would cover the whole building were it to be destroyed. It’s important to note that the policy should always be written at replacement cost. There is a significant difference between replacement cost and actual cash value!
Another important variable in your hazard insurance policy are the deductible options. This is the amount you pay before the policy comes into full effect. By raising your wind and all other peril deductibles, you can usually bring the premium down.
Not every business owner has money set aside in the event of a natural disaster. If you don’t have a sizeable amount saved up just for emergencies, your hazard insurance policy is invaluable for the continuity of your business.
9. Hazard Insurance Can Protect You from Nearby Developments
It is not just the environment that can cause problems for your business property. Nearby developments may have unforeseen effects that could impact your business buildings severely. One of the most common is when a new building disrupts natural run-off paths, turning your once dry patch of land into one that is suddenly susceptible to flooding.
Don’t Wait: You Need Business Hazard Insurance
Now you know the importance of business hazard insurance, you need to get a policy. Make sure that you have plenty of time to shop around for a great quote. Harris Insurance specializes in small business insurance and offers the most markets for property insurance in Northwest Florida. We work with you to shop all available markets to ensure we deliver the most competitive rates for your business property and operations.
Harris Insurance has been protecting Florida residents and businesses since 1965. Click here and let us help you protect your business today.
Your insurance probably already covers fire as a hazard in general, but you might want, or need, additional coverage. Generally, homeowners insurance covers fire and smoke damage to homes and property. But have you considered things like liability if a fire begins at your home and spreads therefore damaging neighboring homes? If you live in an area prone to ongoing damage from wildfires, having additional coverage can be necessary and beneficial when you are hoping for peace of mind.
LEGAL DISCLAIMER
Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.
