MALVERN, Pa. — Lightning poses significant fire risks to small- and medium-sized enterprises (SME)—including laundromats—causing billions of dollars in damage annually, according to the Insurance Information Institute (Triple-I) and the Lightning Protection Institute (LPI).
“Recovery costs from lightning can be devastating to a business,” says Tim Harger, executive director, LPI. “Not only can it cause damage to structures and electrical systems, but it can result in business interruption and lost income. Every SME should assess their risk and take action before a strike happens. It’s the first step to protecting their operations—and their future.”
National Small Business Week, which started Sunday, highlights the importance of obtaining professionally designed, installed, inspected, and certified lightning protection and grounding systems, which can help mitigate this risk, as well as the right type and amount of insurance to protect these businesses.
According to the Small Business Administration (SBA), 40% of small businesses do not reopen following a disaster, another 25% fail within a year, and more than 90% fail within two years.
“While larger commercial businesses tend to be more informed on the benefits of insurance as well as predicting and preventing risk, oftentimes smaller and mid-sized businesses simply do not have the resources, and ironically, they are most at risk when disaster strikes,” says Sean Kevelighan, Triple-I CEO. “As much as purchasing insurance and taking steps to mitigate risk may seem like an added cost when budgeting is tight, the reality is they will recover faster and have a greater chance of staying in business.”
Protecting a small business from lightning, according to the two institutes, requires these strategies:
- A properly designed, installed and certified lightning protection system to provide a specified path to harness and safely ground the supercharged current of a lightning bolt. The system should factor in risks such as location, storm frequency, soil composition and building occupancy because every building is unique.
- Selection and installation of appropriate surge protection devices can help prevent electrical and electronic equipment from strikes and surges that can enter a building through the electrical system, telephone, data or other outside wires.
- Business property insurance to pay to repair or replace damaged physical assets such as the building, equipment, furniture, fixtures and other items a business depends on to support daily operations.
- Business income and extra expense insurance to provide coverage when a business is forced to close temporarily due to a covered loss, such as a fire from a lightning strike. It can help replace your income and expenses such as rent, payroll, relocation costs and advertising fees.
- A utility services endorsement to business interruption and/or extra expense coverage can add protection for disruption of basic utility services, such as electric, gas or water provided to a business’ premises by public or private utility companies.
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].