Reminder to Businesses from Irene
Posted on Mon, Sep 19, 2011
As business owners locally and up and down the East Coast continue to deal with the aftermath of Hurricane Irene, it’s a good reminder to be prepared for natural disasters with proper insurance. Businesses that recover quickly are those that plan in advance. Property damage from disasters—whether natural, such as Hurricane Irene, or caused by an act of terrorism, such as the 9/11 attacks—can destroy a business. Fortunately there are steps you can take to be prepared.
Business insurance provides wind coverage for property damaged by hurricanes and some other natural disasters. In addition to coverage for the business’s property or structure, it also covers office furnishings, inventory, raw materials, machinery, computers and other items essential to business operations.
Business income insurance (also known as business interruption insurance) will cover the loss of income if there was direct physical loss or damage to the business premises. Coverage depends on the individual policy, but typically begins 72 hours after the premises suffered the physical loss and ends when either the property is repaired or replaced or when the business is resumed at a new permanent location, whichever is earlier. In addition, if the business has extra expensive coverage, it will pay for extra expenses during this time after a loss, such as the costs associated with temporary relocation, space rental, advertisement and equipment.
Coverage for flood damage resulting from surface water, including storm surge caused by hurricanes, is excluded under standard business insurance policies. Flood coverage is available both from the National Flood Insurance Program (NFIP) and from some private insurance companies. Commercial policies, which are more comprehensive policies for businesses, may include flood coverage, so business owners need to check with their insurer. Flooding to commercial vehicles is covered under the comprehensive section of standard commercial auto insurance policies, which is optional.
In addition to making sure you have adequate insurance coverage for your business, every business owner should prepare or review their own Preparedness and Recovery Plan. The Massachusetts Emergency Management Agency (MEMA) recommends these tips to ensure your business is prepared for the unexpected.