Insuring Against the Weather

While it's impossible to predict the exact damage wrought by hurricanes and other weather phenomena, you can assess your risk through insurance.

By Jacquelyn Lynn

Opinions expressed by Entrepreneur contributors are their own.

Last year, four major hurricanes struck Florida, then unleashedtheir fury on states up the Eastern Seaboard and as far west asTexas. This year's hurricane season, which began on June 1, isalready well "above average"--the devastating hurricaneKatrina was this season's 11th named storm. Even if you'renot in Hurricane Alley, weather can still damage your business. Thebest way to deal with such hazards is a combination of property andbusiness-interruption insurance, and other risk-managementstrategies.

"Unfortunately, many events, whether precipitated by astorm or other catastrophe, are not covered within the basicstructure of most policies, particularly commercial propertypolicies," says Anita Setnor Byer, president of Setnor ByerInsurance & Risk in Plantation, Florida. "And theinsurance, if available, is often cost prohibitive."

It's impossible to insure against all potential weatherdamage. Instead, Setnor Byer advises, review your policies withyour agent to clarify exactly what weather-related damage iscovered. Then look at what recovery alternatives, including backupsystems and cash reserves, will assure your company's survival.Keep in mind that even if you don't suffer direct propertydamage, you could be affected by a general slowdown in the localeconomy. Setnor Byer suggests that you have enough cash on hand tocover at least 30 to 60 days of operating expenses.

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