According to FEMA and the Small Business Administration, 40 percent ofbusinesses do not reopen after a catastrophe or other disaster, andanother 25 percent fail within a year.
|What can businesses do to help their chances of surviving anincident?
|Related: Nationwide survey reveals small-business ownerslack a disaster recovery plan
|The answer is business interruption coverage. Also known asbusiness income insurance, business interruption insurancecompensates policyholders for lost income if their company has tovacate its premises due to disaster-related damage that is coveredunder a property insurance policy, such as natural catastrophes,supply chain disruptions or cyber risks.
|Two in five businesses have suffered a business interruptionloss in the last five years, according to the 2017 RIMS Business Interruption Survey.Additionally, a 2015 Nationwide survey found that 66 percent ofsmall businesses, generally identified as those with 50 or feweremployees, lack business interruption coverage.
|Related: 4 ways to prevent business interruption from anatural disaster
|“Many businesses are often unaware of the true costs and impacta business interruption can have on their operations without theproper coverage," said Loretta Worters, a vice president of theInsurance InformationInstitute (I.I.I.). “Many businesses do not survive becausethey either lack coverage or have inadequate limits for thatcoverage.”
|See the infographic below from I.I.I. for more stats aboutbusiness interruption insurance.
|(Click image to enlarge.)
|
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