Cover Your Assets
We love disasters--hurricanes, earthquakes, fires, you name it, and we glue ourselves to our TVs to watch every grim moment. But fun as it may be to be a disaster-voyeur, what if it was your business that went up in smoke, went down in the 150-mile-per-hour winds of hurricane Floyd, or got bombed to smithereens by a kid who figured out how to make explosives by cruising the Internet?
Isn't there a vaccine that can stop your business from evaporating when bad stuff happens? You bet. Plentiful insurance policies are available to protect your business equipment and offer cash flow while you regroup. Here are steps you can take beforehand that cost little but just may minimize losses, no matter what evil befalls you.
If anybody knows disasters, it's the Federal Emergency Management Agency (FEMA), which offers a free guide to help businesses reduce losses. Get your copy of Emergency Management Guide for Business & Industry at http://www.fema.gov/library/bizindex.htm
Learn the basics of business insurance by scanning a few Web sites that offer pointers on shopping for it, types of coverage to look for and where to get more info:
- Small Business Insurance" at the Insurance Information Institute (http://www.iii.org/individuals/business/small_business.html)
If you're hit hard, how will you meet payroll, pay your office rent or even cover personal living expenses? Business interruption insurance, or coverage designed to keep cash flowing into a business that's been shut down, could save you. Get the facts at:
- Business Interruption Without Profit Interruption" (http://www.mnp.ca/Publications%20archive/PubMarch2.htm): A short but sound commentary from a Canadian accounting firm.
- Underlying Principles of Business Interruption Insurance" (a href=http://www.insurancefraudlaw.com>http://www.insurancefraudlaw.com/a_under.htm): This survey covers the basics and more, including why some insurers deny claims.
Hidden in the fine print of many insurance policies is a bit of bad news: Your computers may not be covered. The good news: Specialty insurers will cover your machines--even laptops--and, for many lean businesses, that's all the coverage you need. Find out what can be insured, and for how much, at these sites:
- In addition to covering computers, InsurePoint(http://www.insurepoint.com) offers a wide range of insurance (business interruption, liability and more) specifically tailored for the needs of small start-up tech companies.
- Safeware (http://www.safeware.com) and South Coast Metro Insurance Brokers (http://www.coveragelink.com/PC_Ins/default.asp) cover computers against damage, theft, power surges and other high-tech disasters.
Most insurance books are unreadable. Two exceptions:
- The Buyer's Guide to Business Insurance, by Don Bury (Psi Research-Oasis Press, $19.95, http://www.amazon.com): This step-by-step primer's focus is getting adequate insurance but saving money, too.
- Insuring the Bottom Line: How To Protect Your Company From Liabilities, Catastropes and Other Business Risks, by David Russell (Silver Lake Publishing, $29.95, http://www.amazon.com): This 424-page book from the Taking Control Series tells you what you need and how to buy it cost-effectively.
Are they worth it?
A nasty thought: If you have a claim, will your insurance company have the cash to pay up? Some have shaky finances, so before paying for any policy, check out the ratings provided by Standard & Poor's and Duff & Phelps.
Robert McGarvey wishes he had an insurance policy that covers mental lapses.