Small Business Insurance for Bad Weather (or Good)

Be it a pandemic that forced the closure of over 30% of small businesses or constant weather conditions affecting different states across the country, small businesses are always highly impacted. 

Since the beginning of 2023, the country has experienced approximately 24 disasters, each costing $1 billion in destruction. These disasters have various effects on communities, individuals, and small businesses. When it comes to small businesses, the consequences can affect not only the operations but also the extended families of owners and workers. 

However, there are some guidelines and tips every small business can follow to avoid a temporary or permanent shutdown. This includes but is not limited to keeping yourself and your employees safe, working on the safety of your setup, and ensuring that your business survives the storm. 

Taking the appropriate insurance plans that suit your needs is one of the best things you can do to address all these aspects. Let us look at the top insurance policies that will prove useful for your small business in extreme weather.

Property and Asset-Related Insurance Policies

When discussing weather-related disasters, it is critical to keep track of all disasters likely to occur in the location or vicinity of the small business. This could be a flood if the company is based in Texas, for instance, or a wildfire if the business has been set up in California. These weather-related disasters can not only halt operations but also cause significant structural damage.

Business interruption insurance is frequently adequate to cover the costs when equipment fails, or operations cease due to theft. However, it does not cover extensive damage or business interruption caused by floods, earthquakes, or other natural disasters. These disasters can also cause property damage. According to reports, floods and flash floods cost over $3 billion in property and crop damages in 2021.

These damages are alarming, and small business owners must develop a proper actionable plan to tackle the impacts of harsh weather. Every small business must be aware of its surroundings and the patterns of local disasters. Based on that, purchasing a separate policy for each significant disaster, such as flood insurance, earthquake insurance, etc is advisable. 

It is always best to confirm and not assume whether hurricane, wildfire, tornado, or windstorm-based insurance policies are included in another insurance policy. After comprehending what is included and what isn’t, small business owners can decide what separate disaster-related policies are mandatory for end-to-end support.

Liability Coverage

Because of limited resources, capital, or backup, it becomes critical for small business owners to be extensively prepared to deal with bad weather. Liabilities can be of various kinds. A general liability, for instance, would look like a customer slipping and falling on snow due to faulty winter shoes they bought from a small business. These types of disputes can quickly escalate, and the small business may be held liable for compensation or legal fees to resolve the issue.

When the weather turns bad, every small business should think about purchasing general liability insurance. This can be extremely useful if a customer complains about poor service or is injured while being on the operational premises.

Apart from that, small businesses must take care of their employees. According to Forbes, 16% of all small businesses (5,431,541) registered in the US had only 1-19 employees. However, because these employees rely on the business to meet their basic needs, it becomes a critical liability to emphasize. If an employee is injured and cannot contribute at work or dies on the job, the small business is responsible for providing compensation.

When dealing with inclement weather, it is critical to obtain worker’s compensation so that it is uncomplicated to provide help and dues when needed. If an employee is injured in a wildfire or gets in a fire-related accident, liable compensation can be provided without financial hardship.

Weather Insurance

Climate change is not only causing an increase in natural disasters, but it is also drastically changing the temperature and other living conditions. Heat waves have recently become popular in states like Texas and Florida. According to reports, July 2023 was the hottest on record since the 1960s.

Temperature changes can have a significant impact on small businesses. For example, if an event planner with an open space for parties experiences heavy rains, they will be unable to earn anything. Businesses can suffer massive losses in such circumstances. Certain weather insurances, such as rain insurance, temperature insurance, snow insurance, and so on, can help avoid this. 

Small businesses can maintain their revenue stream and cash flow by avoiding losses caused by extreme weather conditions with the help of such weather-related insurance policies.

In a Nutshell

Due to weather-related damage, small businesses struggle to maintain revenue streams and basic operations. This is where purchasing the right insurance policies becomes critical. But before proceeding with it, a proper valuation must be carried out. This portfolio analysis is based on factors such as location, employee count, business nature, and so on. At Gonzalez Insurance, we understand what a small business requires for all-around protection. Contact us today to learn more.