A questionnaire posed to small business owners who attended the U.S. Chamber of Commerce Small Business Summit shows that the majority are at risk in the wake of a potential disaster.
Approximately 57 percent of small business owners surveyed feel only somewhat or not very confident that they have the appropriate insurance coverage to protect against insurable risks that can result in significant financial losses or cause them to go out of business.
Another 52 percent surveyed do not have a written business continuity plan or disaster recovery document that identifies and mitigates potential threats to a business, its employees and its customers in the event of a natural or man-made disaster or disruption.
“Given current economic conditions and increasingly unpredictable weather, small businesses have too much at stake to risk not having adequate coverage. While their larger counterparts may have the capital to self insure and cover gaps, a smaller enterprise without the same resources may be forced into bankruptcy. This has implications for not only small business owners, but also for their communities and our economy at large,” said Marc Schmittlein, President and CEO of Travelers Small Commercial Accounts. “The results demonstrate the need for small business owners to increase awareness of the risks facing their businesses. As one of the nation’s largest insurers of small businesses, along with our agents, we are committed to educating and arming entrepreneurs with tools and resources to manage risk, prevent business interruption and help them succeed.”
At the U.S. Chamber of Commerce Summit, Travelers hosted a breakout session, “Protecting Your Competitive Advantage and Employees,” to outline steps for building a business continuity plan. Small business owners can rely on the expertise of their insurance agents to help develop a plan and access risk control resources on Travelers’ website.
Travelers recommends that small business owners take the following steps to prepare for storm season to help prevent damage when things go wrong:
- Create a Business Continuity Plan and Establish an “Emergency File” – Review existing plans and communicate emergency evacuation and business interruption instructions to employees.
- Develop a Hurricane Emergency Plan – Identify how you will prepare, respond and recover to the threat of a hurricane. Include long-term and short-term safety requirements as well as procedures during and after the hurricane.
- Back Up Your Business – Consider keeping a backup generator and plenty of batteries on hand. Back up critical data and computer records off-site so that operations can continue. Having backup accounting documents and a record of business contents can assist in quickly moving the claim process for business interruption coverage.
- Review Your Policies – Understand insurance policies and ensure the business is properly covered for potential hurricane losses like wind, flood and interruption issues.
Highlights of the key findings of the Travelers questionnaire, which was conducted during National Small Business Week, are:
- Only 48 percent have a written business continuity plan or some other disaster recovery document that identifies and mitigates potential threats to a business, its employees and its customers in the event of a natural or man-made disaster or disruption.
- 57 percent are only somewhat confident, or not very confident, that they have adequate insurance coverage to protect against insurable risks that can result in significant financial losses or lead to going out of business.
The Travelers questionnaire was part of a broader commitment to advocating for small businesses. The Travelers Institute, the company’s public policy division, continues to host a national series of small business symposia, entitled “Small Business – Big Opportunity,” to convene government, community, business and economic leaders to identify common challenges and related solutions to ensure small business success.
The questionnaire was conducted on-site at the U.S. Chamber of Commerce’s annual America’s Small Business Summit held in Washington, D.C., from May 21-23, 2012, and is intended to represent the sentiments of approximately 300 small business owner attendees who participated in an in-person interview over three days.
The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. The company’s diverse business lines offer its global customers a wide range of coverage sold primarily through independent agents and brokers. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and operations in the United States and selected international markets. The company generated revenues of approximately $25 billion in 2011. For more information, visit www.travelers.com.