10 MOST COMMON HOLES IN BUSINESS COVERAGE
You may have a business insurance policy, but does it fully protect you for many of these common claims that often occur?
- ARE YOU COVERED…WHEN THE POWER GOES OUT IN YOUR AREA?
Off-site power failure can be devastating for any business. In this day and age, it’s almost impossible to operate without electricity. If you are unable to continue operations due to a power outage off premises, will you be compensated for loss of business income?
- ARE YOU COVERED…FOR CLAIMS DUE TO EMPLOYMENT PRACTICES?
Claims against a business owner from current, former, or even prospective employees are becoming more and more common today. Not only are they extremely frustrating, they can be quite costly to defend. Will your policy protect you if you are sued for any of the following accusations?
- Wrongful termination
- Failure to hire
- Sexual harassment
- ARE YOU COVERED…FOR LOSS OF BUSINESS INCOME?
If you experience a covered claim and your business is shut down for a period of time, will you be compensated for the income you would have received during that time? It would be very difficult for most businesses to remain viable without any income coming in. Will your policy reimburse you for your loss of business income…and how long will your coverage last?
- ARE YOU COVERED…FOR LOSS OF BUSINESS INCOME IMMEDIATELY?
If you experience a covered claim and your business is shut down for a period of time, will you be compensated for the income you would have received during that time right away? If your policy provides coverage, does it have a “waiting period” before this coverage begins? If so, how long can you go without any business income before it impacts your ability to stay in business?
- ARE YOU COVERED…FOR THE FULL VALUE OF YOUR CONTENTS?
If the contents, supplies and equipment that you use to operate your business are damaged or destroyed by a covered claim, will you have the protection that you need? Is the amount of your coverage adequate? And if it is, does your policy provide “replacement cost” protection?
- ARE YOU COVERED…FOR ADDITIONAL LOSSES DURING BUSY SEASON?
Most business insurance policies provide an established limit for contents coverage. But what if a claim occurs during your prime season when your inventory is higher than usual? Does your policy provide additional coverage if your loss exceeds the amount of contents coverage during your busy season?
- ARE YOU COVERED…FOR REBUILDING YOUR BUILDING?
If you own your building, do you have enough coverage to rebuild the entire structure in the event of a total loss? Many business policies provide only a limited amount that may not be enough to rebuild and may leave you hanging in the event of a partial loss. Make sure that your policy provides enough protection to rebuild and repair your valuable property.
- ARE YOU COVERED…FOR CLAIMS OUTSIDE YOUR PROPERTY?
If someone is injured outside your business premises but nearby, will you be covered? Some commercial policies limit your protection only to events that occur on your premises, but you could be held liable for claims beyond your boundary. It’s important to know where your coverage begins and ends.
- ARE YOU COVERED…FOR ACCOUNTS NOT RECEIVED?
Are you covered for the loss of accounts receivable? Suppose you were working on a project for a client that was not yet completed when a loss occurs. Would your policy pay you the amount you would have received had the job been completed? In some cases, this could add up to a substantial amount of money.
10.ARE YOU COVERED…FOR THE LOSS OF A PARTNER OR KEY EMPLOYEE?
If you depend on a partner or a key employee, are you protected in case something happens to that person? If they were no longer able to work with you, how would this impact your ability to continue operating your business? Many businesses cannot survive the loss of a partner or key employee. It’s important to plan for this contingency and protect your most important asset.
BONUS HOLES FOR RESTAURANTS
If you own or operate a restaurant, there are additional holes to watch for in your business coverage. See if your policy protects you in case of the following:
- SPOILAGE – Are you covered if your food spoils due to a power outage or other covered claim? If you are covered, what is the limit on your policy? Is it enough to adequately protect you?
- EQUIPMENT BREAKDOWN – Are you covered for vital equipment that may break down? It doesn’t even have to be a fire or other claim. If the equipment you are counting on every day goes out, what will you do? You need to be protected in case this occurs.
- CONTAMINATION SHUT DOWN – Are you covered if the health department shuts down your restaurant due to a concern regarding contamination? Will your policy provide “loss of business income” if this happens? If you have to close your restaurant for an extended period of time, this could be quite costly.
- FOOD-BORNE ILLNESS – Are you covered if your amount of business is diminished due to negative media-reporting about items on your menu? Suppose that the number of people coming to your restaurant is down because something on your menu has received negative publicity, will your policy provide “loss of business income” in the event that this occurs?