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Property coverage rates expected to decrease in 2014

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Firms that want property coverage in 2014 are in a good place to buy since prices may drop. Buyers of business property insurance are expected to see lower costs for property coverage next year, according to Business Insurance

In the 2014 Marketplace Realities Report released by Willis Group Holdings, prices are projected to drop an average of 10 percent to 12 percent for noncatastrophe-exposed risks. Liabilities that involve natural disasters like hurricanes are expected to decline 5 percent to 10 percent.

Complement disaster recovery plan with insurance
Firms that do not prepare for disasters using a recovery plan and the right amount of business insurance coverage are in danger of being shut down permanently, according to Insurance Journal. As a consequence of major disasters, almost 25 percent of businesses are not able to operate again, the Insurance Information Institute said.

"Business owners are busy building their businesses, but they need to invest the time and money to develop a disaster recovery and contingency plan," said Loretta Worters, vice president of the III.

The III suggests that firms have electronic and written records as part of a business contingency plan. This plan should include obtaining resources needed to keep a business functional after a disaster, such as extra equipment or supplies and contractors that can perform repairs to facilities. To help cover the costs of physical damages, businesses can purchase property insurance to pay for lost furniture, machinery, electronics and inventory.

As part of their contingency plan, business owners should come up with an alternative location for their company. Another type of insurance that is applicable to disaster recovery is business interruption insurance. This insurance policy allows companies to recover monetary losses in the form of lost income from business operations being down or costs related to having to relocate after their regular facilities were damaged or destroyed.

When preparing an emergency and recovery plan, business insurance is essential for firms that want to rebuild and start running again quicker to prevent any more financial losses. Having the right insurance policy can not only help businesses bounce back from disaster but also ensure they are able to continue their legacy. 

"You've worked hard to build your business and like any other investment, there are potential risks," Worters said. "That's why it's important to reduce those risks as much as possible with the right type of insurance coverage."

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