The Best (and Necessary) Motto: Be Prepared
Disaster can strike! In recent months, I have been reminded a couple of times how disaster can strike our businesses. Over the holidays one of our franchise members had a break-in that caused a fire, burning the center to the ground. Disaster struck, but fortunately, the owner had good insurance coverage, a second location that allowed for minimal business interruption and a franchise network for support.
I also heard about a West Coast firm that recently had a devastating fire that destroyed the building and damaged neighboring buildings. The news article quoted a fire chief: “There’s chemicals, a lot of equipment, a lot of the back area was used for storage. Quite honestly, it was pretty cluttered.” This sounds like he was implying conditions existed that could have caused the fire. I wonder if that created any problems with the insurance company or with the neighbors. Some people love to sue, and insurance companies are notorious for trying to deny claims. I don’t know the outcome of this one.
Why should you care? “It will never happen to me” is a common thought. Well, these two examples prove that it can. And even though the odds may be low that it could happen to you, it can happen. Is it worth betting your business and the security of your family and employees on it? I am sure you will agree, it is not.
What should you do? First you should do a complete audit of your insurance coverage. Are you covered for business interruption? Do you have full coverage on the replacement value of your equipment, software, art files and furnishings? What about floods, earthquakes, tornados or “acts of God?”
If you rent or lease, is it clear what you are responsible for and what your landlord requires you to have? Does he/she cover your tenant finish or do you? What do your equipment leases say about insurance coverage? Most likely, it’s your responsibility.