By Kell Holland, Sheridan Jemison and Joe Deyo Zander Insurance
Wow. Just wow. It has been a crazy couple of years for small businesses. Most have been absorbing and ducking punches from the world like a championship boxer. The list of haymakers that have come your way is long, and includes COVID-19, lockdowns, a tanked economy, a surging economy, supply chain issues, work-from-home requests, inflation, cyberattacks, worker shortages, severe weather, killer bees and more. Oh, and don’t forget the usual small business challenges of providing a quality product or service that people want at an affordable price.
As insurance advisors we have a front-row seat to the challenges businesses face. This includes historic threats such as liability issues and property protection, current issues like competitive and compliant employee benefit packages, and the evolving challenges of cyber liability and identity theft protection. More than ever small businesses need a reliable and knowledgeable insurance advisor in their corner – one that is focused not on selling you something, but one that is there with good questions, good solutions, and good strategy. A good agent focuses on your current needs, but also helps you prepare for the next big thing – or bad thing.
Working with organizations in Tennessee and across the country, we have seen it all. Here are a few examples of coverages you may want to consider for your business.
Cyberattacks are one of the greatest challenges for small businesses today. Increasing 600% since the pandemic, cybercrime includes data breaches, ransomware extortion, malware, viruses, phishing, and social engineering where the cybercriminal tricks someone into sending funds, sharing passwords, or giving access to other critical information.
While cyberattacks reported in the media focus on large corporations, the reality is that small businesses, with less security and fewer resources, are often seen as easy targets. Recent market surveys show that in the past 12 months, 23% to 40% of small business have suffered at least one cyberattack with an average cost of $25K. The bad guys LOVE American small business.
Some of the potential costs arising from a cyberattack that can be covered by insurance include legal fees related to lawsuits by those affected, ransom demands, legal notifications to impacted parties, IT costs to recover lost data, money lost from transferred funds, and more. Remediation services are also a huge benefit to small business owners, helping you mitigate the negative impact that a cyberattack has on your client base and rebuilding trust. Coverage for this type of loss is typically excluded from your general liability policy, however both cyber policies and crime policies can offer security. Cyber Liability protection could save your business, so it’s important to speak with your agent about protecting yourself from this ever-increasing threat.
In the spring of 2020, a string of tornadoes moved through middle Tennessee causing extensive damage. One of our clients called the next day and shared that their business office and primary warehouse had been nearly decimated due to the storms. This thriving company essentially went out of business in the span of one day. Fortunately, they had a Business Interruption insurance policy in place that was designed for this very situation. It provided immediate funds that allowed the company to lease a new location, configure it for their needs, and quickly get back to full operations. While it was a difficult punch to absorb, it wasn’t a knockout blow.
Business Interruption coverage is great to have to protect against losses from situations out of your control, such as storm damage, natural disasters, prolonged power outages, unforeseen road closures, and more. While it doesn’t protect your business from a pandemic, in other situations it can make the difference in whether you can keep your doors open.
Finding and keeping employees is harder than ever. A recent survey noted that up to 45% of all employees are contemplating a job change or will soon. Yikes! One line of defense (and offense) that many employers are implementing is revised employee benefit offerings. Health insurance remains the centerpiece of most benefits packages, and is still the most requested. Beyond that, employees are also looking for dental, vision, disability, life, identity theft protection, and other optional coverages to choose from. One benefit that is getting increased attention lately is disability insurance – or the more aptly titled “paycheck insurance.” This pays an employee a percentage of their normal pay in case they are out of work for a sickness or injury.
Small employers should not assume that good benefits are too expensive and out of reach. With things like “level funded” plans for health insurance, voluntary benefits, Health Savings Accounts, and setting up employee classifications, having a quality benefits package that helps you attract and retain the talent you need is doable. Work with your insurance agent/advisor to learn about the options and put together a strategy that works for you.
Get A Move On
The last few years have provided some historic challenges for small businesses, and more punches are sure to come in the future. Having a reliable and trustworthy insurance agent/advisor in your corner is a key component of being ready for the fight – one that has a deep expertise in all the types of coverage that your business needs. Don’t sacrifice your success with an agency that only specializes in one area and just dabbles in other lines of insurance. Partner with your agency to conduct a top-to-bottom evaluation of your current coverages, assess any gaps or coverage you might be paying too much for, and get a strategy in place to take care of it. Doing that may just help you be a little bit more prepared for the next big thing – or bad thing.
For nearly 100 years, Zander has been putting clients first by simplifying the process of researching insurance products and allowing clients to purchase a complete portfolio from one office. This fourth-generation family/employee-owned business provides a comprehensive selection of business, employee benefits and personal insurance products to their nationwide client base.
The authors each have over 25 years of insurance expertise and specialize in serving businesses of all sizes. At Zander Insurance they work together with their teams to provide a cohesive and strategic approach to serving client needs.