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Businesses can prepare for a busy summer season, an upcoming holiday, or new laws that impact their company, but few are ever fully prepared if a major disaster strikes, like a fire, flood, or hurricane. When rough times hit your business, the last thing you want to be is unprepared with limited Commercial Insurance coverage that doesn't do much to help you repair and recover what's been lost.

Recent studies have found that 75% of all U.S. businesses are underinsured, making them much more vulnerable to high out-of-pocket expenses if they experience major losses. In today's Aegis blog, we examine four ways your company could be underinsured and what can be done to better protect your business if a major event disrupts daily operations.

Building Replacement or Repair Costs

A majority of businesses have some basic Commercial Property coverage in place to protect the value of their building and business property. However, the original coverage amount needed at the start of the policy might not be able to cover current day expenses for repairs or building replacement if there is a catastrophe that impacts the business.

For example, if your business began 10 years ago, the cost of repairs, labor, and materials at that time would be much less that at today's market rates. If your business property experiences a total loss today due to a fire or other covered event, but your Commercial Property coverage was not ever adjusted to reflect current market costs for repairs and property replacement, then you would face significant out-of-pocket expenses for the difference.

Extended Income Loss

Another area where your business could be underinsured or completely uninsured is regarding income loss. Business Income Insurance, also known as Business Interruption Insurance, protects businesses by covering the loss of income due to covered events such as theft, fire, or windstorm damages.

Without this important insurance coverage, your business will have a much harder time staying afloat and covering expenses such as your lease or mortgage payments, corporate tax payments, payroll, and utility bills. Business Income Insurance allows your company to have the financial resources needed to make important payments and ensure your financial stability as you recover and rebuild.

Lengthy Utility Interruptions

With certain industries, a lengthy utility outage can be extremely difficult to overcome because of the nature of their business. Although an accounting office or law firm could easily have employees temporarily work from home because of a power outage, a retail store can't successfully operate if there's no electricity, and a restaurant cannot legally open or serve customers if there is a significant interruption in water services.

Companies that are vulnerable to lengthy utility disruptions should ensure that they have Utility Disruption Insurance in place to avoid costly losses and damages to their business. Without this type of coverage, it can be much harder to recover from a significant utility outage and the lost revenue that can result.

Lack of Flood Insurance

Finally, a substantial number of businesses along the Texas Gulf Coast are uninsured from one of the most catastrophic causes of property loss, which is flood damage. Flooding events have steadily increased in frequency and severity in our region, but many businesses lack Flood Insurance that would protect against the staggering amounts of damage that a couple inches of flood water can cause your business.

Flood Insurance is an important policy for business owners to carry simply because no other type of Commercial Insurance policy can help cover the losses caused by flood waters. Too often, businesses mistakenly assume that Commercial Property Insurance or other kinds of commercial insurance can help protect against flood damage, only to discover too late that they must cover all losses on their own.

Aegis Can Help Protect Your Business

Aegis Insurance & Financial Services is a leading provider of reliable, top-quality Commercial Insurance coverages across a wide range of industries. We can assess your current risk factors, analyze your existing policies for gaps in coverage, and make recommendations based on our decades of extensive business experience.

For more information about areas where your company may be underinsured, or for a free quote on our full range of Business Insurance policies, contact Aegis today at 713-850-7622 or fill out our online form for a free quote.

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