A survey by The Hartford of Superstorm Sandy victims finds thatsmall businesses took an average of seven days to reopen primarilybecause of connectivity and power issues, and few had businessinterruption (BI) insurance to cover their losses.

The carrier's survey of 451 New YorkTri-State area business owners impacted by the Oct. 29 catastrophefound the vast majority—74 percent—had to close their doors for aperiod of time. Seventy-one percent experienced power outages and11 percent said their buildings suffered structural damage.Fifty-two percent said they experienced loss of sales or revenuesand 36 percent called the overall impact on their businesses“significant.”

New York was the state hardest hit, with business closures at 81percent compared to 78 percent in New Jersey and 64 percent inConnecticut.

Ray Sprague, senior vice president of the Small Commercialinsurance segment for the Hartford, Conn.-based insurer, says theloss of cell phone and Internet connectivity had a major impact onsmall businesses because they were unable to contact customers oremployees in order to keep their businesses open. Businesses thatmade advance preparations, such as having emergency communicationsystems in place and the 25 percent of those surveyed who said theycreated backup copies of critical data and programs, were in abetter position to reopen after the event.

Additionally, 20 percent of those surveyed said they preparedemergency survival kits and the same number protected theirbuildings by boarding up storefronts or taking similar measures toprotect their property.

Only a third of those small businesses surveyed had BIcoverage—which Sprague says covers business closures due to fire,water damage or theft—but only 10 percent had off-premisesutility-interruption protection covering power outage, a typicalendorsement to standard BI policies. “That was really the need[during] Sandy, and it was a surprise to us because of the productwe provide in our Spectrum Businessowners policy,” said Sprague.“We have extensive penetration in our customer base foroff-premises power interruption, and that was a big part of ourloss in the event.”

Sprague said that while speaking with small business owners at apanel discussion yesterday–sponsored by the Greater New YorkChamber of Commerce–he learned that some of the small-businessowners expressed dissatisfaction with their coverage, and wassurprised that they were not considering reviewing their insuranceprogram. That, he says, demonstrates a need to educate smallbusinesses about insurance and underscores how reliant theseentrepreneurs are on their agent.

“We encourage our customers to have a very focused conversationwith their agent and understand what their needs are and help themwith protection and coverage and working on their businesscontinuity plans,” Sprague adds.

Over the long term, businesses financially impacted by Sandysaid they will need to make financial adjustments: The survey says35 percent of respondents will re-evaluate their business strategy;32 percent will cut costs; and 25 percent will either scale back orstop hiring new employees.

The survey, conducted three months after the superstorm,identified small businesses as an establishment with three to 100employees that had been in business at least one year in the areasmost affected by Sandy. The results included 150 businesses in thefive boroughs of New York; 150 in New Jersey, and 151 in threecounties in Connecticut.