Disaster-Specific Insurance is Essential for Your Business

By Bernie Cosentino, Vice President – Habitational

Imagine this scenario: You have been successfully operating your business for five years, seeing massive year-over-year growth. One year, a flood comes through and wipes out half of your equipment and damages large parts of your main office building. No big deal, right? You call your insurance agent to go over your policy and make a claim. Uh oh. Turns out you don’t have flood insurance and that flooding isn’t covered under your general business and property policies. What do you do now? Eat the cost—that’s about the only option available to you.

Every business owner is well aware that general business policies and others, like workers’ compensation, are important. Many don’t, however, think about the importance of having disaster-specific policies which will cover them for disasters which could occur in their area. It’s very difficult to consider the types of disasters which could occur, and it’s even harder to understand and estimate potential losses that stem from those disasters. To compound the issue, consider the fact that right after a disaster occurs, a huge influx of claims is going to be filed at the exact same time.

Different insurance types are available for different natural disasters (and there are even some for man-made disasters, like acts of terrorism). Many natural disasters are understandably omitted from business and homeowners insurance, though. That is the key element. Believing you are covered and actually being covered are two very different things. What coverage you need depends on where you are and what kind of losses you could potentially see.

Specific types of insurance are available for almost all natural disasters, and understanding what you might need can be as simple as calling up a local professional who understands the geographic region you live in.

The Midwest may have a lot of tornadoes, the South may have hurricanes, the North may have huge snowstorms and flooding. It all just depends on where you are and what sort of protection you might need to have.

It should also be noted that this type of insurance is typically called catastrophic insurance due to the losses that could potentially be suffered and the large scale of the events. It is also different from hazard insurance. Confused yet? If you were, we wouldn’t blame you. Speaking with a professional is the best way to make sense of it all.

Do you know what types of disaster insurance you may need (or be required to have)? If so, you are already ahead of the curve. If not, you may want to pick up the phone and make some inquiries. Reach out to a professional today to keep you protected from disasters tomorrow.