How to Survive a Business Interruption, and Reputation Insurance Info

Soon Reputation Insurance May Be Available to SMBs

In 2012, Goldman Sachs employee Greg Smith quit his job. Instead of bemoaning his fate in private, Smith wrote a New York Times op-ed piece saying that Goldman’s environment was “toxic” and that the company “sidelined” clients’ interests.

There’s no telling how many people read that piece in print and online, then shared it via social media. And that’s not even allowing for the thousands of words written in post-publication commentaries.

However, apparently as a result of this firestorm, Goldman Sachs experienced a whopping $2.15 billion decline in market value. That’s how expensive damage to a company’s reputation can be.

With word spreading so quickly via social media, it’s now essential for companies large and small to guard their reputations. Although reputation insurance is now primarily accessible to the “big kids” on the playground, it’s worth keeping an eye out, because it likely will be available soon to small and medium-sized businesses (SMBs).

How can an insurance policy put a stop to rumor mills? Most reputation policies provide companies with public relations expertise before something happens, and it covers the costs and expense of anything from recalls to damage control if something does happen. It would not only cover losses like Goldman Sachs’, but also the repair costs, too.

Currently, most reputation insurance products cost roughly $10,000 annually. As business magnate Warren Buffet once said: “It takes 20 years to build a reputation, and five minutes to ruin it.”


ENTREPRENEURS
Happy 25th WWW: Here’s to an Amazing Next 25 Years

The Internet is 25 years young. In March 1989, symbolics.com was registered as the first ever dot-com, kicking off a new era in communications. Since then, the Internet has grown to 80 million dot-coms and more than 200 million websites.

The World Wide Web was initially conceived as a way to share complex information. Today the Internet is connecting people, things, knowledge, and processes as well as data, and transforming organizations, industries, and lives. E-commerce has become a dominant economic force and a key driver of innovative new products, services, and business models.

The Internet is making us smarter, safer, and more efficient, and redefining our roles as consumers and citizens. At the same time, users are experiencing unprecedented value.

As more and more people become digitally engaged, getting news and information, shopping, enjoying entertainment, learning, socializing, and working online, here are just some ways the Internet will evolve:

  • The Internet will become further integrated      with the world around us. Think smart homes and cars, Internet-enabled      medical procedures, and more.
  • Technological innovations will improve the      quality of lives through advances in healthcare delivery, productivity,      and security.
  • Companies and their customers will      communicate directly online, eliminating the middle men and dramatically      driving down costs.
  • Internet connectivity will allow us to      scale and manage our resources more effectively. Already,      Internet-connected devices permit consumers to control their energy usage      via smartphones and tablets.
  • Intelligent transportation systems linked      to GPS navigators and phone apps will alert users to real-time traffic      conditions and hazards, making travel more efficient.

Today, virtually everything is or will be connected to the Internet. And it’s not yet reached its peak; in fact, the next 25 years look even more transformational.


MARKETING
Relationship Building: Today’s Way to Close a Sale

With pushy sales techniques out of style, innovative businesses are finding new ways to maintain control over the selling process.

Consumers are not getting more gullible; they’re getting smarter. Resources available on the Internet make it easy for those savvy consumers to research products, prices, and vendors; make no mistake, these customers know what they want. In some cases, the customer becomes the pushy one, and this can throw off an otherwise excellent salesperson and derail the entire selling process.

The key to closing a sale these days is two-fold: adapting to buyers’ concerns and building trust. To encourage this kind of an environment, today’s top closers need to stay in control and step away from the urge to argue when interacting with customers.

An increasingly popular approach to sales training teaches the importance of regulating the emotional environment of a sale. Sales professionals must remain focused on establishing their honesty and integrity; in today’s market environment they can’t afford to antagonize, nor can they afford to let customers hijack the process based on their Internet research, which may (or may not) be specious.

At the same time, consumers are looking for a solution, and they are demanding that their salesperson provide them with one. It’s important to be honest when you don’t have the answer. Instead, recognize how to adapt the company’s products to the potential customer’s needs. Build that trusting relationship with creative problem-solving techniques.

Prospects may have unmet needs; rendering creative solutions easily separates the winning organization from the stagnant one.


INSURANCE
How to Survive a Business Interruption

On Sunday, August 28, 2005, business owners in New Orleans closed up shop for the day, unaware they’d be closing for a very long time. And some, forever.

Unfortunately for them, many of these small businesses were missing an extremely important part of their commercial insurance – business interruption coverage.

Unexpected circumstances – such as hurricanes like Katrina – can close businesses for an undetermined amount of time. Unlike employees of a large company, business owners don’t have workers’ compensation or sick leave to tide them over during a long closure. But there is an “equivalent” for businesses: Business interruption (B.I.) insurance. Here are several common situations that are covered by B.I. insurance:

  • Fire: Even if only a part of your business’s building      is damaged, you may have to close for a while for restoration.
  • Windstorm: When your roof or your siding is torn off      your building in a storm, it’s no laughing matter. New roofing or siding      is costly. And, without a roof over your customers’ heads, the risk of a      liability claims greatly increases.
  • Hail: That outdoor patio may be romantic, but not in a      hail storm. Restaurants welcoming guests to open-air dining have issues of      liability and cleanup, both of which can be time-consuming and costly.
  • Vandalism: Whether it’s graffiti or broken windows, you      still may have to close down for cleanup.
  • Damage to equipment: Machinery does break. Depending on      your type of business, this could totally shut you down. Repairs may take      a long time, and, of course, they’re costly.

If your business closes from a covered loss, you will be reimbursed for revenue you would have earned if you had remained open. Insurers use financial records to determine the compensation you’ll receive, so be sure to keep them up to date and accurate. Fixed expenses, such as rent or utility bills, don’t stop just because your company had to close. On average, 23 percent of a business’s revenue goes towards operating expenses, and these are covered by B.I. insurance while you’re closed.

Coverage amount: The amount of coverage is business-specific and depends on revenue, monthly expenses, and risk. Consider the following:

  • How much will your bills be if you shut down for three      days. What about three weeks? Three months?
  • Do you do business in an area at risk from floods,      tornados, hurricanes, or wildfires?
  • What is the average recovery time for businesses      dealing with the same risks you face?
  • Do you want to continue to pay your employees while      business is interrupted?
  • Do you have enough in the bank to get through a long      closure?

Cost: Cost varies all the way from $750 to $10,000, depending on the size of the business and coverage needed. Businesses in high-risk tornado zones or coastal areas will likely pay more. Business type plays into risk, too – restaurants may pay higher premiums than a shoe repair store due to higher fire risks.

Regardless of premium cost, B.I. insurance is much cheaper than what you stand to lose without it.

November 5th, 2014 by Lightship Insurance