Across the U.S., severe weather is on therise. As winter draws to a close, Mother Nature willnow phase into its next cycle: spring storm season. Withoutinsurance, damage from spring storm season will hit small-businessowners the hardest. 

Nationwide's annual Small Business Indicator survey revealed thata majority (68 percent) of small-business owners don'thave a written disaster recovery plan — even though about half (49percent) said it would take their business at least three months torecover from a natural disaster.

The survey was conducted by Harris Poll on behalf of Nationwidefrom June 10-23 among 502 U.S. small-business owners with fewerthan 300 employees. The survey found that: 

• 71 percent of small-business owners don't have businessinterruption insurance, which can be vital to survival since anestimated 25 percent of businesses never reopen following a majordisaster
• 21 percent of small-business owners without a written disasterplan said they don't have one because it's not a high priority forthem
• 22 percent of small-business owners have already been impactedby a natural disaster

PropertyCasualty360.com asked Mark Anderson,a Nationwide catastrophe expert with 40 years of on-the-groundcatastrophe experience, who reported on Nationwide's survey last year,what small-business owners should do to prepare. 

Keep reading to see what advice Anderson offered for smallbusinesses.

Related: Wildfire: An expandingthreat? 

Disaster recovery plans are an essential preparation toolfor small-business owners, especially as severe weather is on therise in the U.S. (Source: Shutterstock)

What are some specialty offerings that help independent agentscustomize products for clients who want business protection fromdisasters?

Most policyholders do not understand that business interruption does not apply if there wasno direct physical loss to their covered property. Forinstance, if a major storm impacts an area and power is out for anextended period of time and there is no direct physical loss to thepolicyholder's business, there is no coverage for the period oftime the business is closed due to the interruption of power. Theagent and policyholder should know that there are companies thatoffer coverage for these types of situations.

• Utility services – time element,which is an endorsement that covers losses for an event in whichwinds break down a power line or a water main is broken, includingloss of income and expenses, up to a predetermined time limit oruntil the power or water service is restored
• Utility services – direct damage,which is an endorsement that's an extension of property insurance,providing protection against damage to property resulting from aninterruption of any of the utility services named in the policy asa result of a covered cause, such as a windstorm

Why does this information serve as great tools for independentagents to use when talking to clients about business interruptionand other forms of insurance beyond basic property insurance?

Most small-business owners are not well prepared for naturalcatastrophes. A majority (68 percent) of small-business ownersdon't have a written disaster recovery plan — even though nearlyhalf of those surveyed said it would take their business at least threemonths to recover from a natural disaster.

Of the small-business owners that indicated they did not have adisaster recovery plan for their business, 68 percent alsoindicated they do have a family evacuation plan at home. If abusiness owner feels that a disaster plan is important enough fortheir family and the protection of their family, they should havethat same concern for the safety and health and well-being of theiremployees, as those employees depend on that business to supporttheir families.

Disaster can strike at any moment, but a little preparation cango a long way to keep your small-business up and running when itdoes.

For tips on creating a disaster recovery plan, check out theInsurance Institute for Business & Home Safety or Nationwide'sBusiness Interruption Insurance page.

Mark Anderson is associate vice president of commerciallines property technical claims at Columbus, Ohio-basedNationwide.

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