What insurance does a small business need in winter?
As a small business owner, you will likely need one or more of the following types of business insurance:
- Commercial property: If you own a storefront, warehouse, manufacturing facility, equipment, computers or inventory, business property insurance protects you from losses related to theft or physical damage. For example, if your roof caves in after a heavy snowstorm, property damage coverage will reimburse you for the repairs and damaged office equipment. This is one of the most significant kinds of coverage, according to insurer The Hartford, water and freeze-related events comprised 15% of its small business insurance claims.
- General liability: General liability covers events like bodily injuries, damage to others' property, personal injuries involving libel or slander or damages related to false or misleading advertisement. For example, if a customer slips on icy steps in front of your shop and breaks a leg, general liability would help cover your legal fees and the customer's medical expenses.
- Commercial auto: The Federal Highway Administration says that each year, more than 1,300 people are killed and more than 116,800 injured in vehicle crashes on snowy, slushy or icy pavement, highlighting the importance of car insurance. If you or your employees operate vehicles for your business, commercial auto policies protect you from damages or injuries related to accidents.
- Business interruption: Business interruption coverage provides added peace of mind in winter. If your building or property is damaged by the weather, such as hail wrecking your delivery vehicles, business interruption insurance covers some of your lost income.
- Worker's compensation: If you have employees, there is an increased risk of injuries due to icy roads and sidewalks during winter storms. Worker's compensation is a required coverage that pays for employees' lost wages or medical costs if they're injured while on the job.
- Business owners policy (BOP): A BOP is a package of commercial insurance products. These policies usually include property, liability and business interruption insurance.
What is seasonal insurance, and who needs it?
Some businesses make the majority of their income during certain parts of the year. For example, the following business types are usually classified as seasonal enterprises:
- Ski resorts
- Snow removal companies
- Christmas tree farms
- Halloween stores
- Landscaping services
For these businesses, seasonal business insurance policies provide temporary coverage, such as insurance for three or four months, for your property and liability.
Even if your business operates year-round, if you have certain months where you have increased business needs, you may need to adjust your coverage or purchase additional insurance. For example, if you have a snowplow company that needs to hire additional staff during the winter, you may need a higher coverage limit.
Some policies also include business interruption coverage; if your ski shop is damaged in a blizzard, business interruption coverage would help cover the revenue you lost from closing the business during your peak months.
Seasonal coverage can be cheaper than year-round coverage.
However, not all insurance companies offer seasonal coverage. You should be aware that starting and stopping coverage will create gaps in your coverage, leaving your business vulnerable during times you don’t have coverage, according to small business insurance broker Insureon.
How to file a snow damage insurance claim
If your business is damaged by snow or ice, follow these steps to file a commercial insurance claim:
- Contact your agent or insurance company: Procedures vary by company, so call the claim phone line to report the damage and discuss the next steps.
- Document the damage: Take photos and video of the damage and impacted property. Make a list of damaged items or buildings.
- Protect your property: If it's safe to do so, take some measures to protect what's left of your property. For example, you may need to temporarily board windows or get tarps over the damaged roof to protect your property. Discuss these measures with your agent or insurance company to ensure they don’t affect your claim.
- Meet the adjuster: The insurer will send an adjuster to view the property and assess the damage. You may need to meet the adjuster to let them inside the property and call out any damage.
- Get quotes: Typically, you'll need quotes from two or three contractors for repairs.
- Keep good records: Track your expenses for temporary repairs, such as the cost of wood panels and nails, and any invoices from contractors.
What should small business owners do to prepare for the winter season?
Ahead of winter, small businesses should review their insurance coverage.
"It’s a good idea to review your business insurance at least once a year to make sure your coverage levels reflect your current risks and value of your property and assets," said David Embry, chief executive officer of Mylo, a small business insurance broker. “An end-of-year review can ensure you enter the new year with ideal protection. Review your policy with an expert agent to ensure you’re covered for winter-related risks.”
- Discuss your coverage: If your needs have changed — for example, if you moved locations, added a storage facility or hired new employees — you may need to add new coverage or increase your policy limits.
- Identify new risks: Business needs and risks change over time. If your operations or services have changed, you may need added coverage. For example, if you now offer delivery, you may need to add commercial auto coverage to your policy.
- Ask about discounts: Depending on your business and insurer, you may be eligible for discounts. Some insurers offer discounts if you bundle multiple kinds of business insurance or install new security features. You may also be eligible for a reduction in your premiums.
What should small businesses do to minimize winter risks?
When it comes to owning a business, one of the best ways to protect your property is to take preventative measures:
- Winterize your property: Ahead of the winter months, replace your furnace filter, trim back tree branches on the property, check the windows for drafts or gaps and perform any maintenance on your heater or electrical systems.
- Consider investing in a generator: If you have property that could be damaged by the cold, investing in a generator to maintain your heat and cooling systems could prevent catastrophic losses.
- Practice emergency drills: Ensure you and your employees are prepared for a storm. Emergency drills will help you handle everything from a burst pipe to a power outage.
- Make sure that walkways and parking lots are cleared. Be sure to salt and/or sand pavement before the business opens.
"Prevention is the best safeguard against these risks and being vigilant about preventing wet and slippery surfaces in and around your business is vital," said Hammer. "Inside your business, use non-slip floor mats and caution signs to warn of wet floors and be vigilant about keeping floors dry."
What our expert says
Q: What’s the best way a small business can minimize risks from winter damage and injury?
