The concentrated cluster of thunder and hailstorms that ravaged the Midwest last month provides a good opportunity for insurance agents to review their commercial clients’ insurance portfolios.
A series of weather systems, including at least seven tornadoes, hammered parts of Illinois, Iowa and northeast Missouri with hail and damaging winds in mid-March. At least 40 homes were damaged and four destroyed in Moline, Illinois alone.
And while such storms usually bring in claims from auto and homeowners clients, there is a strong argument for shoring up coverage for commercial clients as well – according to data from the Insurance Institute for Business & Home Safety, one in four businesses never open again after 224 hours of closure in the wake of a natural disaster.
To keep commercial clients from becoming a statistic, a recovery plan is essential, advises Columbia, Missouri-based Shelter Insurance.
One of the most important things to prepare for is the possibility of power outage, downed trees or closed areas that may require temporary relocation.
“Consider a plan that allows you or your business to work remotely or in another location,” the company advises. “That way, you’ll be able to keep the most critical operations of your business up and running to meet your customers’ expectations.”
Small businesses may also want to invest in a generator to keep the lights and computers on, as well as refrigerated and frozen items cold.
Once a disaster plan is in place, Shelter recommends agents help clients run through the plan with staff.
“Make sure all your employees know what their roles are, whether it’s keeping the business working or staying in touch during a disaster,” Shelter said. “Then provide a feedback outlet for their comments and experiences after the fact.”
Of course, business interruption insurance is a key part of any disaster preparedness plan and agents should ensure clients are appropriately covered.
While most mid-size businesses carry some form of business interruption insurance through a business owners policy (BOP), additional coverage may be necessary for truly damaging winter events. Small businesses may not be covered at all.
“If you incur a direct hit and there’s fiscal damage to your property and you’re unable to operate for weeks, that policy will cover you,” said Michael Barry of the Insurance Information Institute. “I think that’s something for every business owner to consider.”
These kinds of policy reviews are especially important for people who live in areas prone to heavy, continuous snow and ice storms.
Severe winter weather caused 15% of all insured auto, home and business catastrophe losses in the US last year, said the III.
