Insurance

Organizations have typically viewed business continuity plans as insurance against disruptions, but that is not necessarily the case. Even if you have a plan, you still may need business interruption insurance to aid in your recovery.

Since business interruption concepts are intimidating to some involved in crisis management, a good place to start is with an understanding of some of the basics. (Item #1)   Business interruption coverage is designed to provide additional money to cover specific kinds of losses and expenses. (Item #2)   Before getting interruption insurance, here are some issues to consider. (Item #3)  

There are several important points to consider around business interruption coverage and many lessons learned from Hurricane Sandy. (Item #4)   What should you do about payroll insurance? (Item #5)   Do you have these 13 types of insurance for your business? (Item #6)  

As always, we look forward to hearing your comments & insights regarding business continuity. If you have a topic you'd like us to cover, email me at [email protected].

Bob Mellinger, President
Attainium Corp

1. Understanding Business Interruption

BI coverage is governed by a policy limit and specific terms and conditions. It is a contract between the customer and the insurance company to pay for claims under certain circumstances. It is not a blanket promise to reimburse the customer regardless of the cause of the business interruption. Typical conditions include the interruption being the result of direct physical impact that would be covered by the property insurance policy and exclusions or restrictions for business interruptions caused by war, actions by civil/military authorities, utility interruption, inability to access their property and terrorism.
http://www.continuityinsights.com/articles/2008/04/understanding-business-interruption-insurance

2. Getting (Back To) Business Interruption Insurance

Business interruption insurance provides funds to make up the difference between your business' normal income and its income during and immediately after a forced shutdown. When a business suffers a property loss it may be forced to close for some time or move to a new location, temporarily or permanently. A property insurance policy will cover the cost to repair or replace buildings, equipment, and inventory and it may contain special wording that covers loss of income. If it does not have that special wording, you need a separate business interruption insurance policy to cover lost income.
http://www.uphelp.org/library/resource/getting-back-business-interruption-insurance

3. Business Interruption Insurance: What It Will -- and Won't -- Cover

Most business owners don't have interruption insurance. Cost may be a factor in why entrepreneurs pass on such coverage: policy prices range from $750 to $10,000 or more, depending on business size. But businesses may want to reconsider interruption insurance given the rising number of natural disasters. The annual total has increased from 400 major incidents in a typical year to more than 600, according to a recent survey.
http://www.entrepreneur.com/article/224982#ixzz2i6FrAYL8

4. Business Interruption: A Brief Primer and Lessons Learned from Superstorm Sandy

According to a recent National Hurricane Center report, Superstorm Sandy was the deadliest hurricane in the northeastern US in 40 years and the second-costliest in the nation's history. Many businesses and individuals are still recovering from the damage. As with any catastrophe, there is an opportunity after the fact to review disaster plans and insurance coverage with an eye to being better prepared next time. One of the areas highlighted by Sandy is business interruption coverage.
http://usa.marsh.com/NewsInsights/ThoughtLeadership/Articles/ID/29908/Business-Interruption-A-Brief-Primer-and-Lessons-Learned-from-Superstorm-Sandy.aspx

5. Business Interruption Insurance: Should You Insure Ordinary Payroll?

Among the many decisions an employer makes when buying Business Interruption Insurance is whether to insure ordinary payroll, and if so, for what length of time. It is important to consider and revisit this question periodically, because your business needs can change from year to year based on type of operations, plant or office locations and the economy.
http://www.sciroccogroup.com/index.php?option=com_content&view=article&id=194:business-interruption-insurance-&catid=17:timely-topics-category&Itemid=172

6. Thirteen Types of Insurance a Small Business Owner Should Have

As a business owner or operator, you know that insurance is a critical business expense. Forbes magazine offers information about what types of insurance a small business should have.
http://www.forbes.com/sites/thesba/2012/01/19/13-types-of-insurance-a-small-business-owner-should-have.