In the fall of 2019, wildfires fueled by high winds erupted in parts of Northern and Southern California, threatening structures in multiple communities.
Wildfires have long been a concern in this sunny and dry state, but in a recent twist, millions more residents and businesses were impacted when public utilities cut off power to help prevent downed power lines from sparking fires.
Small businesses can be hit especially hard when extreme weather or other unforeseen events result in major damage and/or force temporary closures. In fact, nearly 40% of small businesses never reopen following a disaster.
This is why it’s important to identify the potential risks that threaten your business, create a thoughtful disaster plan, and obtain adequate insurance.
This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing the types of coverages that may or may not be included in a standard business owner policy:
Check Your Coverage
A business owners policy (BOP) is a package that typically combines property insurance, business interruption insurance, and liability protection (up to policy limits). Property insurance helps protect a company’s buildings, equipment, and contents against a specific list of covered perils.
Business interruption insurance helps cover lost income and operating expenses that may continue while a business is closed because of a disaster. It also helps cover relocation and advertising costs so a business can operate from a temporary site. This coverage generally kicks in after a 48- to 72-hour waiting period under three sets of circumstances:
1. There is physical damage to the premises that forces your business to close.
2. There is physical damage to other properties (caused by a covered peril) that prevents customers and employees from reaching your location.
3. Your property is inaccessible because the government shut down the area due to widespread damage caused by a covered peril.
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 21 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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