Property Insurance for Small Businesses

Business represent the cornerstone of the social and economic growth of a particular area, and small businesses can have a very large impact. ‘Never forget the impact that your small business can have in your community and the world at large. There are three primary ways that small businesses contribute to our nation. They give people the opportunity to achieve financial independence, encourage innovation, and create employment opportunities.’ (source: huffingtonpost.com) Isn’t that something that you’d want to protect as best as possible?

The following is an excerpt from a recently published article in Dialogue written by one of our partners Greg Strahl:

These enterprises are driven by individuals who are passionate about what they do, and who pour their hearts and souls into their businesses. They often wear many hats – everything from CEO/CFO/COO to chief cook and bottle washer. They are responsible for every facet of the business and must be “experts” in every major business function, including risk management. However, the hard reality is that it is nearly impossible to be an expert in all areas, and when it comes to procuring adequate property insurance a mistake could be costly. If underinsured the business may not survive a serious property loss. In this article, we will provide an overview of some important insurance considerations for small business owners.

Check your lease
When leasing commercial space be sure to have the insurance clause reviewed by your insurance broker. Among other things, the lease will require the tenant to maintain insurance coverage over certain types of business property. There is one category of property coverage which is often over-looked, or not fully understood. As a tenant you may not intuitively consider insurance for the leasehold improvements to be your responsibility; however, whether installed by you, a former tenant or by the landlord most leases will require you to insure the full replacement value of all fit-ups. This is not always a straightforward number to calculate, and we recommend consulting with the Landlord to determine the appropriate amount of coverage.

Disability insurance for the business
If your business were to be badly damaged, or even destroyed, by fire how would you continue to cover ongoing expenses such as your own salary, or that of key employees? Every business ought to consider carrying Business Interruption insurance, Extra Expense insurance, or both. This important coverage will ensure that your business can survive a major loss. If purchased on a “profits form” basis, the coverage will extend beyond the reconstruction period and continue until the business attains the projected sales level that pre-loss trends would suggest. Most commonly, business interruption coverage is limited to the twelve month period immediately following the date of loss. Depending on the nature of your particular business twelve months may not be sufficient to re-build and have the business returned to profitability. Ask your insurance broker to provide you with a Business Interruption worksheet, which is a useful tool in determining the correct level of coverage needed.

You can read the rest of his article here , download our ‘Business Interruption Worksheet’ here and contact us to learn more about our small business insurance products to effectively meet the needs of your business.