These are unprecedented times. The COVID-19 pandemic has shuttered the economy, peaceful groups marching to protest the death of George Floyd have been joined by small factions of others bent on expressing their frustration with smashing and looting, and nearly 41 million jobs have been lost.
More than 40% of small businesses may never reopen. It is sobering, to say the least, and definitely not business as usual.
These are seismic shocks, and uncertainty about the future is going to persist for some time. Stock market rallies and federal government stimulus packages have provided some relief, but the long-term outlook remains unclear.
A crisis of this scale tests business leaders and owners. Smart companies are taking whatever steps they can: conserving cash, pivoting to provide different services, shifting focus to ecommerce. Along with these efforts, it is vital to take a close look at your commercial insurance. It is not without nuance or complexity, but understanding it and getting the maximum value from it is worth the effort.
Here are three ways to get the most out of your business insurance coverage right now.
1. Maintain open and honest communication with your broker.
With all that’s going on with business, it can be easy to skip regular check-ins with your broker. That’s a mistake—your broker should be your partner right now, and is in a better position to help if you provide a clear understanding of your situation.
In this country, insurance is governed by the states, and the departments that regulate it provide ongoing guidance. Currently, they are issuing regular updates on everything from reimbursement for claims to the suspension of premium payments. Through consistent communication with your broker, you’ll know if they are paying attention. And you’ll be positioned to take advantage of any opportunities that can improve your cash position.
This is a time to demand creativity. There is virtually no history to guide us at the moment, so the best brokers are working diligently with their carrier partners to find solutions for their clients. Flexibility, persistence, the ability to think outside the box—these qualities have never been so important.
2. Submit a Business Interruption claim
Business Interruption insurance is part of most commercial packages and protects companies when they must suspend operations, usually due to acts of nature or man-made crises that make it impossible to continue normal activity. There has been no shortage of debate surrounding the COVID-19 pandemic and how this type of coverage applies, since claims are typically paid when there is actual physical damage to a business property.
Most carriers have insisted the language in these policies protects them from paying claims related to COVID-19. Relatively few businesses have sustained physical damage in these recent months—most are simply enduring a period when regular commerce has evaporated.
Obviously, that’s not positive news for anyone trying to weather this storm. But it doesn’t mean that you shouldn’t submit a claim. In fact, many state legislatures are stepping in, and introducing laws that require insurers to cover pandemic-related losses.
Even if you’re unconvinced you will be covered against losses, you should submit a claim. If you haven’t filed one, you’ll be that much further from receiving payments if insurers are forced to provide them. A diligent broker will stay on top of the shifting regulatory process and ensuing court challenges, so you’ll stay informed about the possibility of financial compensation
3. Re-examine your property coverage. And yes, submit a claim
Property coverage can extend to all kinds of damage that your business may have sustained. A great property policy, usually called “special form” property coverage, is expansive and covers anything from inventory loss to unpaid receivables.
Many property policies also include damage from riots or civil commotion, something that has happened to many storefront operations in recent weeks. If your company has suffered this kind of misfortune, your broker should be fighting for you and might be able to help use your property coverage to help you recoup some of the concurrent losses caused by COVID-19 closures.
Once again, it’s difficult—well, impossible—to receive a payment if you don’t submit a claim. Submit one as soon as possible, and lean on your broker to help you navigate the process. And remember this moment in the years ahead—making sure your next property coverage policy provides a real financial backstop will help you sleep well at night.
In times of crisis, it’s all-hands-on-deck. Now is the time to rely on your broker and, in fact, test their ability to be the kind of representative who will work to protect the future of your business. Ask questions. Be proactive about submitting claims. Position yourself for whatever comes next.
This is not the 2020 anyone expected, but getting the most out of your business insurance can help your company get through it.