Natural disasters including fires, earthquakes, hurricanes, and floods have increased in frequency in Hawaiʻi over the last decade. From 1953 to 2003, the island state averaged one federally declared disaster of any type every two years.
Today, it averages more than two a year. One of the best ways to prepare for hazardous weather is with the right insurance. Discover how the right insurance can help small businesses in Hawaiʻi recover more quickly after natural disasters.
Creating a Disaster Recovery Plan
Insurance is an important component of a business disaster recovery plan. After any type of natural disaster, you want your small business to bounce back as quickly as possible to minimize financial losses and maintain your customer base.
Having a good disaster recovery plan in place that is practical and concise can help get your business back up and operational. Disaster recovery plans focus on what needs to be done before, during, and after a catastrophe occurs.
Before a Natural Disaster:
Preparing for unexpected weather events is essential for recovery. This process involves backing up important records, storing valuable documents off-site, and having a tech solution that provides secure and continuous backups in the cloud.
Also, make emergency contact information readily available offline. This may include local emergency services, suppliers, lenders, insurance companies, and major clients and customers.
During a Natural Disaster:
In the midst of a disaster, a small business should follow its emergency response plan. To keep employees and customers safe, make sure all staff are aware of the plan and their role in it.
Also, create a strategy to protect your assets. This may mean moving inventory and equipment to a higher floor during a flood or having a generator on-site to operate freezers when the power is out.
After a Natural Disaster:
Rebuilding and recovery after a natural disaster will be different for everyone. Depending on the extent of the damage, it may be necessary to temporarily relocate while repairs are being made. During this time, continue to communicate with clients or customers and inform them when the business is ready to reopen.
Losses should be promptly reported to the insurance company. An experienced insurance agent can provide guidance on how to file a claim.
Insurance to Mitigate the Impact of Disasters
Natural disasters are a part of life, especially in Hawaiʻi. Having the right insurance policies can prevent small businesses from having to permanently close their doors after a catastrophe. While every business is unique, the following types of business insurance are recommended for small business owners in Hawaiʻi:
1. Property Insurance
Commercial property insurance protects a business’s physical assets from burst pipes, fires, vandalism, theft, and natural disasters. This policy should be used to insure the building itself, all office equipment, accounting records, inventory, equipment, fencing, signs, landscaping, and satellite dishes.
Any small business that owns property and physical assets should carry commercial property insurance.
2. Flood Insurance
Most standard property insurance policies do not include flood coverage. To protect against damage to a building caused by flood waters, small business owners in Hawaiʻi should consider carrying separate commercial flood insurance.
A flood policy can help cover repair and replacement costs of electrical and plumbing systems, appliances, water heaters and furnaces, windows, detached garages, solar equipment, and more.
3. Earthquake Insurance
Similar to flood insurance, most property insurance policies do not include earthquake coverage. A commercial earthquake policy will generally cover damage to the building and business property, such as inventory and equipment.
Most earthquake insurance policies also include business interruption insurance. This means that if you’re unable to continue operations, the policy can help cover the loss of business income.
4. Hurricane Insurance
In Hawaiʻi, hurricane season often brings significant wind damage, water damage from rain and storm surges, and business disruptions that have both short-term and long-term physical and economic impacts.
Hurricane insurance is designed to protect small businesses against the physical damage of a building and its content during a hurricane. It is an important supplement to any commercial property insurance policy.
5. Business Income Insurance
When a business faces an unexpected event that forces it to shut down, such as a natural disaster, it can lose a substantial amount of income. Business income insurance helps small businesses cover the loss of revenue if they are unable to operate due to a covered peril, such as a fire, wind damage, or theft.
Any business that has a physical location with equipment, products, or services can benefit from this coverage.
Protect Your Small Business with Atlas
In Hawaiʻi, our isolated location in the Pacific and coastal communities often suffer the brunt of Mother Nature’s wrath. If you’re a small business owner in Hawaiʻi, you know how important it is to keep your investment protected from natural disasters.
Atlas Insurance Agency is your local provider of comprehensive insurance policies tailored to meet small business coverage needs. Contact our agents today at (808) 400-6634 to see how we can safeguard your property and assets.