HG Insurance Agencies loss prevention for business

Loss Prevention for Your Business Due to Fire: What You Can Do

Insurance and the steps you take in effective loss prevention work together to help keep you, your employees, and your business safe in the case of fire loss to your business.

As a business owner, you need to know the risks you potentially face. By understanding common risks and taking action to effectively mitigate those risks, you can prevent potential significant losses. 

Some risks are obvious, while others are unearthed by a qualified professional, someone who knows where to look and what questions to ask. To learn more about the various means of loss prevention, talk with your broker to identify trouble before it happens and suggest ways to control, reduce or eliminate risks altogether.

Fire is certainly catastrophic when it destroys the physical property of your business. However, a lesser known and often more significant risk is the damage it can do to your business operation due to fire loss. 

Closing operations even temporarily, moving to an interim location and significant inventory loss following a disaster can threaten to shut down your organization permanently. In fact, as many as 40 percent of businesses forced to close following a disaster never open their doors again.

The most common causes of business interruption (BI) loss are fire and explosions, accounting for over 59 percent of BI claims worldwide. And, most of these are due to human error or technical failure, making workplace fires often avoidable.

Property owners and managers can both reduce their risk of  explosion or fire loss, and at the same time, secure better property and business interruption insurance, terms, conditions and pricing with the following tips:

  1. Plan for the unthinkable. Be sure that you have developed a comprehensive emergency response plan. A thoroughly thought out response plan will provide communication guidance procedures for fire, emergency personnel, and local utilities. The plan should be drilled periodically, with emergency exits clearly labeled, paths well-lit and unblocked. Don’t forget, too, to outline an emergency vendor list, including the following: your insurance broker claims representative, a disaster restoration/remediation contractor, a fire protection contractor, an electrician, a plumber, and other relevant and qualified professionals and trades.
  2. Practice regular housekeeping. Don’t let dust or dirt accumulate on electrical equipment or motors and store flammable/combustible liquids in UL or FM approved cabinets. Designate outdoor smoking areas at least 20-ft. from the facility, ensure all combustibles are kept at least 36-in from electrical boxes and panels and maintain 18-in. of clearance from the top of storage units to the automatic sprinkler heads.
  3. Prioritize preventative maintenance. Have a licensed electrician perform routine inspections and maintenance and inspect your facility for visible electrical deficiencies on a routine basis. Open or damaged electrical panels, use of extension cords as permanent wiring, electrical tape repairs to wiring and missing ground prongs are common fire hazards that can easily be addressed.
  4. Ensure “hot work” is kept cool. Welding, grinding, brazing, and cutting tend to be common causes of workplace fires. Establish a formal permit system that indicates the scope and location of hot work and conduct pre- and post-work inspections to identify potentially hazardous conditions in the work area. Provide a fire extinguisher within 25 feet or less of the work area, and implement a dedicated fire watch during all hot work and one hour past work completion.
  5. Keep your fire suppression and protection equipment up-to-date. Proper inspection and maintenance of your automatic sprinkler system are the most effective protective measures in preventing fire damage. Make sure they are installed and serviced by a licensed, insured and qualified contractor in accordance with regulatory standards. Similarly, monitor the system with central station alarms attended to 24/7/365.

Businesses don’t think twice when securing fire and general liability policies to protect their property. But, not everyone thinks about backing their business entity, which still needs to run even if your facility is burned to the ground.

HGINS home-based business insurance

Insurance for Home-based Businesses

If you work from home, be sure to talk to your broker about adding property and liability coverage to your home insurance policy.

In this Internet Age, one of the fastest growing sectors today is the home-based business.More and more Canadians are operating successful businesses from their homes. What they may not know, however, is how this might impact their home insurance

Home-based business coverage is available as an extension of your home insurance but it’s important to understand that most residential policies do not provide coverage for businesses operating from home.

And, even if you’re only operating a home business part-time, you should consider home-based business insurance to make sure you and your business property are covered.

Benefits of a home-based business insurance plan

A home-based business insurance plan will cover your office equipment, business inventory on and off-premise and business interruption insurance if anything were to happen to your home because of an insured loss.

It covers the things you need to run your business, including furniture, equipment, desktop and laptop computer, software, cell phone and fax machine. It also includes items you stock, or goods you hold for sale.

Most importantly, it will cover you for additional liability for clients, delivery personnel and employees.

Should I insure my home-based business?

The answer really depends on what your business activities consist of.

If you have a lot of high-value equipment and no clients or employees coming to your house, it may be less expensive for you to add your equipment to your existing home coverage as an additional endorsement.

If you do work for the government or other high-profile agencies such as working as an author, event organizer, HR consultant, marketing consultant, translator or for a non-profit organization, you may want to consider Errors & Omissions insurance – in the event your business is held to be liable if a client claims financial loss due to an error or omission on your part, or that of an employee – which is required for some contracts.

Note that if clients or employees come into your home for the business purposes, you may not be covered under a standard home insurance policy for liability.

Additionally, if your business is larger than the typical one to two-person home-based business operation, you may need to consider standard business insurance. Your broker will be able to advise you as to what your particular situation requires.

We offer home office insurance extensions to bridge the gap between your residential policy and the needs of your small, commercial business. Talk to us!