From tornadoes to explosions: avoiding insurance tragedies in 2023
By Jeff Zander, CEO of Zander Insurance
From the COVID-19 pandemic to the tornadoes and the downtown explosion, 2020 was one of the most challenging years in history for many Nashville business owners. Our hearts go out to those who had to permanently close their doors in a year that no one could have predicted would be so tragic.
We have worked with numerous businesses when natural disasters occur and, while we hope 2023 doesn’t bring us anything near what we experienced in 2020, it doesn’t hurt to plan for the worst and ensure your insurance policies are where you need them to be should another tragedy strike.
Natural Disasters
The top piece of advice I recommend to business owners (and anyone for that matter) is to compare policy rates through an independent insurance broker. On your behalf, a broker shops to find the best available policy and rates from an extensive array of companies. By comparison, going solely with a captive agency that only represents one insurance company won’t allow you to shop the market and compare options, thereby maximizing coverage and value.
With commercial insurance, most policies are written on an “all-risk policy” form. Contrary to its name, the all-risk policy will generally list what is not covered. Make sure to read the exclusions section of your policy to be clear on what is included. Usually, most all-risk policies will cover windstorms, tornadoes, hail, lightning, fire and other natural disasters; however, they typically exclude floods and earthquakes. These coverages can be added separately.
Start by reviewing what the policy will not cover and evaluate if your business should purchase an additional policy covering damage from those excluded perils or risks.
Bombings, Explosions and More
Much like natural disasters, explosions like the one that affected downtown Nashville on Christmas Day cannot be predicted. According to the Insurors of Tennessee, an “explosion” is a covered loss under most property policies, and in some cases, it may be named an “act of vandalism” and covered as such.
If the explosion had been certified as an “act of terrorism,” most small businesses would have been covered. However, in some limited cases, large specialty-type business risks may have a policy that excludes terrorism, but there is an option to buy back that coverage. Companies falling into this category should have been notified by their agent when the policy was purchased, and the option was presented.
Cybersecurity Threats
A Pew Research poll found that 71 percent of employees shifted to remote work during the COVID-19 pandemic. Additionally, with many schools doing virtual learning, students and parents are at an increased risk for identity theft and other cyber-crimes.
More remote work creates not only an increased risk for employees but also for their employers. In most cases, remote employees use personal devices to log into company systems, which may not maintain the same cybersecurity measures implemented in the office. A lack of cyber safety measures at home may expose the business to increased risks that could cause significant financial loss and disruption for their clients in the event of a data breach or other cyber intrusion. Small- and medium-sized businesses have become prime targets due to their less focused efforts toward cybersecurity.
Business owners and HR managers should educate employees on risk factors associated with working from home, emphasizing the importance of protecting their personal and financial information and the company’s information.
Additionally, you should ensure that all of your anti-virus, malware and other cybersecurity systems are up to date. Having a Data Breach insurance policy in place is another critical step since cybersecurity measures alone may not protect against a breach or other cyber attack.
I also recommend employers consider including identity theft as an employee benefit, especially since remote work is likely here to stay for many companies.
Plan Ahead
Whether you’re a business owner, employee or a stay-at-home parent, let this serve as a reminder to do a “check-in” on your insurance policies, whether they be commercial, life, health, automotive, identity theft or home. It never hurts to be prepared and rest knowing you’re adequately insured.
To learn more from an insurance broker, visit zander.com
Jeff Zander has more than 35 years of experience working in the insurance industry, and his knowledge dates back even further. Nashville-based Zander Insurance Group was founded nearly 100 years ago by his great grandfather Herman Zander, and Jeff is CEO of this fourth-generation, family-and-employee-owned business.