Checking BI Coverage Key in Hurricane Season

With hurricane season in full flow, E.G. Bowman Company is reminding people to make sure their business interruption coverage is in place. Among the recommendations for protecting property:

Mark exits: “Make sure clear, well-lit emergency signage and egress information are posted. You have to go to each building and see what its hazards are,” says Harry Nolan, Ph.D., chief loss-control engineer with E.G. Bowman Company, an insurance brokerage and loss-control consulting firm in Manhattan.

Fortify: Steel-door entrances and shatter-resistant windows are recommended. Safe rooms provide a fortified area in which people can hide during severe weather without fear of missile-like debris.

Plan: Ask yourself, “Do we have hazardous materials in our buildings? What’s the make-up? Is it a large-span roof or is it a multi-story building?”

Check your business interruption insurance

While most organizations* probably have some business interruption insurance, underinsuring BI risk isn’t uncommon, says Marjorie Young, vice president at E.G. Bowman Company.

BI insurance covers the income an organization would lose if it had to shut down because of an insured peril such as hurricane, flood, or earthquake.

“It’s just as important as basic property and liability insurance,” Young says. “Thousands of businessowners in the Gulf Coast owe the survival of their business following Katrina to BI insurance.”

BI insurance can even cover your organization if it has to shut down because a key supplier is closed. This is called contingent BI insurance. Available for a small additional charge, it covers the financial loss you’d incur because of someone else’s physical loss—fire, flood, storm, earthquake and the like. “It seems like a small thing, but it could have a big impact if your company is dependent on one or two key suppliers,” she says.

There’s another key wrinkle. Your site could be untouched, but if a storm destroys highways or bridges in the area and cuts off access, you’ll be shut down until the infrastructure is repaired.

An “ingress and egress endorsement,” protects you if you have to close because of conditions in the area or a government edict. This add-on is essential, and the additional cost is low, according to Young. If you’re in an area that could be hit by terrorists, you’ll want to have terrorism coverage added to your BI policy.

*Small businesses often don’t. A 2004 survey of 500 small businesses (with fewer than 100 employees and less than $1.5 million in revenues) found that only 46% had BI insurance.

For further information, visit www.egbowman.com .