Insurance & Business Continuity

Whether you've bought business interruption insurance or you're just thinking about it, it's important to understand how it works. What does it cover or not cover? At what levels? How important is it to business continuity? These questions and more are answered in this week's articles, which include a new insurance just introduced: business interruption Ebola insurance (see item #6).

Most business owners view the whole insurance purchase and claims process as a black art; here's a plain-language focus on explaining it. (Item #1)     Business continuity planning might or might not lower insurance premiums. (Item #2)     Is life insurance on key people in your organization part of your BC planning? (Item #3)    

When do small businesses need interruption insurance? (Item #4)     Before you get business interruption insurance here are some issues to consider. (Item #5)     As Ebola appears in various spots across the globe, the insurance industry this week launched a new product to provide coverage for losses incurred as a result of government-mandated closures. (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 Insurance Coverage for Business Continuity

The main purpose of business interruption coverage is for business continuity. It provides funds to pay for continuing expenses that remain even though the business is not operational at the moment. These are deemed necessary expenses to keep the business viable for its eventual return. There are very specific loss formulas and calculation variables that are used by insurance carriers contained in your policy that determines the amounts.
http://www.metriskadvisory.com/about-us/our-blog/understanding_
business_interruption_insurance_coverage_for_business_continuity

2. Will Business Continuity Planning reduce my insurance premiums?

Insurance is an example of a risk mitigation strategy where the risk is transferred to a third party: in this case the insurance company. Insurance premiums are usually set using actuarial calculations based on the probability that a claim will be made and the magnitude of that claim.
http://www.businesscontinuityuk.net/businesscontinuity/will-business-continuity-planning-reduce-my-insurance-premiums

3. Using Life Insurance to Ensure Business Continuity

The loss of critical personnel can be life threatening to small businesses; however, it's a risk that life insurance can often mitigate. In fact, life insurance policies are frequently used in plans aimed at making it possible for a business to survive a change of ownership or the loss of a partner, the chief executive or an employee whose creative talent, technical knowledge or salesmanship drives the business.
https://www.qcbt.com/ic-article-july2013

4. When Do Owners Need Business Interruption Insurance?

Business interruption insurance can be as vital to your survival as a business as fire or property insurance. And of course few people would ever consider opening a business without buying insurance to cover damage due to fire and windstorms. According to the Insurance Information Institute, too many small business owners fail to think about how they would manage if a fire or other disaster damaged their business premises so that they were temporarily unusable.
http://insurance.about.com/od/PandCgloss/a/When-Do-Owners-Need-Business-Interruption-Insurance.htm

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

If you think you don't need business interruption insurance, you might want to talk to Allison Dorst. The Chatham, N.J., resident, who operates three ecommerce websites selling sportswear, was reimbursed for $10,000 in storage and relocation costs after an early winter snowstorm in 2011 caused a week-long power failure and melting snow endangered $50,000 of inventory stored in her basement.
http://www.entrepreneur.com/article/224982

6. Insurance companies launch regulatory business interruption Ebola coverage

Increasing anxiety over the Ebola scare has prompted many travelers to reassess their emergency medical coverage and businesses to reconsider sending employees overseas. Now, however, there is a specialized insurance product for businesses facing the possibility of government-mandated closure due to spread of Ebola.
http://www.ibamag.com/news/insurance-companies-launch-regulatory-business-interruption-ebola-coverage-19871.aspx