Small businesses are not immune to disasters. There are many disasters such companies could end up encountering, such as fires, natural disasters, cyber attacks, employee fraud or major thefts. When a business owner is caught unprepared for such disasters, it could have significant ramifications for their business. Such disasters could even leave their business financially unable to carry on.
So, disaster preparedness can be very important for small businesses. Having the right insurance coverage can be a key element of such preparedness. However, despite this, not having insurance or not having the coverage they would need to be able to withstand a disaster remains rather common among small companies.
Why is this case? Many things could lead to a company not having their insurance situation aligned with their needs, including: the owner putting off thinking about the possibility of a disaster someday striking, the owner trying to cut costs or the owner and their insurance broker not being on the same page regarding what the business’ needs are.
What do you think would go the farthest in getting more small businesses to be properly prepared, insurance-wise, for disasters?
A business can end up feeling quite desperate when a disaster strikes and it isn’t prepared for it. This desperation (along with things like confusion over policy terms) could lead to the business filing an insurance claim for damage that isn’t actually covered under the policies it has. This could create a very difficult situation for an insurer. How such a situation is dealt with have can impact many things for an insurer, including the likelihood of the situation flaring up into a contentious legal dispute with the policyholder. This is among the tricky situations in which an insurer may find a skilled insurance lawyer’s advice helpful.
Source: Claims Journal, “Many Businesses Don’t Have Enough Insurance to Cover Disaster-Related Losses,” Joyce M. Rosenberg, Nov. 28, 2016