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Business Insurance: Are You Protected from a Natural Disaster?

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Whether you live and work in an earthquake zone, the pathway of hurricanes, the snow belt, the Mississippi River flood plain or in tornado territory – natural disasters will pose a threat to your small business. You may think you have taken reasonable precautions against the most common ones, like a fire or burst pipes. But in all likelihood, you probably have not been spending most of your time contemplating how the forces of nature can undermine your years of hard work.

That’s what insurance experts are for. If you have not invested some time and money in securing adequate coverage for your business against natural disasters, you should make that a priority. If you do have coverage that includes protection against natural disasters, you may want to review your policy with some of these thoughts in mind:

1. What is a natural disaster? Different policies offer different definitions, and different levels of coverage, against the forces of nature. Is that power outage caused by an earthquake or a hurricane actually a natural disaster? It can take your business down for precious days or weeks, but if your policy doesn’t cover it, you’re out of luck. Review your policy, preferably with an independent insurance consultant, to make sure you have the coverage you think you are paying for. According to Answers, here’s a list of natural disasters. (We doubt you’ll need meteor/asteroid strike coverage.)

  • Avalanches
  • Cyclones
  • Earthquakes
  • Floods
  • Hurricanes
  • Landslide
  • Meteor/Asteroid strike
  • Mud slide
  • Tornadoes
  • Tsunamis
  • Typhoons
  • Wildfires

2. Insure globally. Whether you are a global warming believer or not, global weather patterns are changing, and natural disasters that once were typically limited to certain regions of the globe are now having an impact well beyond their historic geographic realms. If you live on a fault line in California, you are doubtless well acquainted with the details, and expense, of earthquake insurance. In New Orleans, you better have flood insurance, if you can get it. In Buffalo, you’ll want to be protected against a blizzard that damages your roof. But what about all the other natural disasters that don’t occur regularly in your area, but could destroy your business in one fell swoop? Floods happen in L.A. Hurricanes, as we now know, can shut your business down even if you’re well inland. Tsunami coverage might be wise these days, especially if you live on the West Coast of the U.S. You don’t want that once-a-century storm to destroy the business you built simply because you didn’t invest in extra insurance coverage for the unforeseen.

3. Road warrior disaster coverage. Suppose you had plans to attend a major trade show in New York that was cancelled due to Hurricane Sandy. You had invested in airfare, a hotel suite for a week, had tickets to Broadway shows for entertaining clients, and rented a place in the Hamptons to unwind after your week of hard work. Did you invest in travel insurance that covered cancellations and related losses due to natural disasters? Most business travelers now accept the flight cancellation coverage, but if you travel regularly as part of your business, experts recommend that you should add a short-term natural disaster policy for your major trips.

Whatever your business, it makes sense to make sure you’re protected properly. Taking that extra hour to review your policies could mean a world of difference in the case of “what if.”

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