Business Interruption coverage can save you from bankruptcy.
The tragic fires of Slave Lake this spring remind us of Mother Nature’s force. It’s also a reminder for business owners of the damage that can occur.
1) You could have a claim more often than you may think
Gougeon Insurance program statistics indicate that 5% of our resort clients had a claim last year, however industry statistics indicate that in a 5-10 year period a business’ likelihood of having an insurance claim is greater than 20%.
It’s worth confirming that your property is insured to value: don’t skimp on proper valuation. During your insurance renewal, you are less likely to consider increased or additional coverages given it’s also the time that premiums are due.
However, it’s not worth skimping on insurance valuation. There are other ways to lower your insurance costs. Some of the other ways to consider are deductible variations and minimization of other add-on frill coverages.
2. Forest fire fighting expense is a valuation insurance coverage
Some add-on frill coverages are quite cool and very useful if your location is more remote and, therefore, has a higher exposure to forest fire loss. If you, your employees or your customers start, or are somehow involved in starting, a forest fire because of their actions or as a result of your operations, you could be liable for forest fire fighting expenses and thus charged back from the Ministry. There is a specific property extension that can be added to your policy to cover your business’ liability for this exposure. It’s now more common on insurance policies compared with what it was prior; it’s worth checking out if you have this on your resort insurance policy.
3) Business Interruption insurance is very useful
Only 42% of seasonal businesses in the Gougeon programs are buying business interruption coverage. Operators who are mainly seasonal feel that they don’t require this coverage; the reality is that a large loss can significantly cripple your business and threaten its survival if you don’t have proper insurance.
Insurance is a costly expense item for business and given the intangibility of business interruptions and lack of priority over liability insurance, it is often overlooked as “nice to have” vs. “need to have”.
More details regarding business interruption:
Business interruption is insurance that offsets the loss of expected earnings.
When a business suffers an insured loss to physical assets, direct damage policies respond. But, during the post loss period, how do businesses meet their ongoing financial commitments?
Business interruption policies are designed for the express purpose of
sustaining businesses financially during a given post-lost period. With business interruption coverage, we are dealing with your ongoing finances as set out in your profit and loss statement / income statement.
There is some work involved to establish the amount of coverage required, however, your insurance broker can help you in this process.
Should a forest fire occur and stop your business from operating, Business interruption coverage will kick in and ensure your business is sustained financially while your business is closed. Saving you and your business from bankruptcy!
For additional information on Fire Safety and Fire Extinguisher Training, please download our free guide.