Carriers targeting the small-business insurance market have their risk management jobs cut out for them in a key area: Many clients don’t have a written disaster recovery plan in place despite a need for one.
Nationwide’s latest Small Business Indicator survey found that 68 percent of respondents lacked a written discovery plan. That response comes even as 49 percent said they’d need three months or more to recover from a natural disaster.
The gaps exist in other areas, too, Nationwide said. Consider:
- 71 percent of small-business owners lack business interruption insurance. Nationwide said this is a vital product option to keep businesses running, because a quarter of businesses remain closed after a major disaster strikes.
- 21 percent of respondents lacking a written disaster plan said it simply isn’t a high priority to have one.
- 22 percent said they’ve already been impacted by natural disasters.
It’s not all gloom and doom, of course. Nationwide noted, for example, that 82 percent of small-business owners said they can work remotely if natural disaster strikes. Another three-quarters said they duplicated and stored their company’s important records at an offsite location. Close to 80 percent pointed out that they can access alternative suppliers if the need arises.
Nationwide said that action on improving preparedness and coverage for small-business insureds is crucial, considering data such as this: The insurer saw a 26 percent spike in the average severity of commercial catastrophe claims when comparing 2014-2016 with 2007-2013. As well, there has been a 14 percent jump in unique commercial catastrophe events that hit a business when comparing those same time periods.
Nationwide generated its findings from a second annual survey, conducted online by Harris Poll for the insurer from June 10-23. The survey targeted 502 U.S. small-business owners with fewer than 300 employees. It included 284 small-business owners who did not have a written disaster recovery plan in place.