Most small businesses underestimate how long it will take to rebuild their property, resume operations and return to previous income levels in the event a disaster strikes. What's worse, the majority do not have business income insurance to recover costs/damage such as payroll, operating expenses and lost profits.
Experts say it takes 4 to 6 months to rebuild property and resume normal operations after a disaster. Then another 6 months to a year to return to previous income levels.
Yet a new nationwide survey by Safeco Corp finds that 45% of small businesses seriously underestimated the recovery time, thinking it would take less than 3 months to recover their normal operations. And 55% did not have business income insurance.
"This is a real problem in the small-business market. Too often we find that by the time entrepreneurs are able to rebuild their workplace, they're in poor financial shape, and reopening is not easy," said Caryn Siebert, vice president of claims for Safeco Property and Casualty Companies.
Safeco, a top-five provider of insurance to small businesses in America, conducted its survey to understand why businesses may fail after experiencing a major crisis. Previous studies have shown that 25 percent of all businesses fail to reopen at all. And 40 percent of small businesses fail within a five-year period of a crisis.
Safeco provides a fast, easy online calculator to help small businesses calculate their business income insurance needs. Click here for the Safeco calculator.
This is yet another example of a large business targeting SMB market dollars, and reflects the growing attractiveness of the SMB market.
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