How to Select a Business Interruption Insurance Agent

Select an expert to help you get insurance geared toward your geographical area and the type of business services you provide. This will help you get the funds to stay in business or relocate, even if a natural disaster destroys your establishment.

Difficulty: Moderately Challenging

Instructions

1. Set up several consultations with the large insurance companies in your area. Evaluate how the staff works to identify the specific loss of sales in your business before you select an agent. In the event that your business is put out of commission due to an emergency or weather-related cause, you want an agent who knows how to attribute the lost business income to direct physical damage.

2. Examine the business practices of a potential agent. Find out whether he uses custom software to analyze and quantify financial losses resulting from business interruptions. For instance, he might examine your business records or recover database files relevant to the financial loss experienced by your business.

3. Select an agent who can professionally assess your facility and address the specific insurance needs of your company. In some instances, an agent can help you connect with a contractor, architect or local expert to determine your natural disaster risk level and predict subsequent damage based on the age and stability of your structure.

4. Hire an insurance consultant to help get the best policy for your needs and your organization. A consultant often assists in substantiating property and business interruption losses, and works closely with your controllers and general contractors to coordinate the claims process and garner an effective settlement. An expert can help ensure that your building and its contents are properly valued. You rely on your financial statements to value not only your property, but also the current replacement costs. Unfortunately, the average business owner falls prey to incorrect valuations based on old data.

5. Rely on professionals who have broad experience with business interruption insurance, finance and the settlement process. This experience will help bridge the gap between harnessing the insurance laws and maximizing your loss recovery.

Tips & Warnings

• Before increasing your policy with business interruption insurance, have your agent cover the most risky and largest needs first. Work with the agent to go over your list of secondary priorities. Watch out for agents who recommend needless coverage, but don't try to save money by under-insuring or overlooking risks that could cause significant loss.
• Ask your insurance agent what actions are required of you in case harm comes to your business. Some policyholders may be required to make an inventory of damaged property showing in detail the quantity, description and retail price of the items.