Considering the string of natural disasters affecting multiple areas of the country, many Main Street businesses could be playing with fire if they do not maintain appropriate levels of business insurance coverage.

A certain amount of skimping on property damage and business interruption coverage is understandable, given the cost. In general, a small business owner’s policy, which is designed for businesses in low-risk industries, costs between $500 and $3,500 per year depending on the underwriting factors and optional coverages selected. This type of policy is typically priced between $500 and $3,500, according to Pogo, which helps business owners find insurance.

As weather-related events continue to become more severe due to climate change, pinching pennies may not be a good idea. According to the National Centers for Environmental Information, there have been 23 confirmed weather/climate disaster events in the U.S. this year, resulting in losses exceeding $1 billion each, which was above both long-term and five-year averages. Among these events were two floods, 18 severe storms, one tropical cyclone, one wildfire, and one winter storm. 

John Hyland, who leads Sentry Insurance’s unit that provides business insurance solutions, says hurricanes and tornadoes aren’t just confined to Florida and Kansas. It is becoming more and more common for natural disasters to strike your neighborhood due to changing weather patterns. 

When areas are declared inaccessible after a disaster, business owners need to understand the nuances of business interruption coverage, which can include waiting periods, co-insurance requirements, and provisions for civil authority bans. 

Keeping the fine print in mind is important, Klein said. As an example, he cites a company with multiple locations and insurance coverage of roughly $20 million. Businesses that suffer extensive damage to multiple locations may not be adequately covered if there is a $1.5 million limit per location.