Many Hawaii small business owners underestimate the importance of insurance until a catastrophic event occurs that requires coverage. Since 1868, over 30 magnitude-6.0 or greater earthquakes have impacted the Hawaiian Islands, according to the U.S. Geological Survey (USGS), affecting countless businesses across the state. Small businesses in Hawaii are also susceptible to volcano eruptions, floods, and other natural disasters.
Having adequate business insurance can help Hawaii small business owners protect against financial losses that could ultimately force them to close their doors.
Here are some signs that indicate the need for Hawaii small business insurance.
1. You Have a Growing Workforce
The need for small business insurance grows with an organization’s workforce. The more employees a business has, the greater the risk of financial losses. In Hawaii, employers must carry workers’ compensation insurance for all employees except federal employees, some real estate brokers, and some domestic workers.
2. When a Contract Requires Coverage
Hawaii business owners may require small business insurance to meet the contract requirements. Sometimes, this could be a commercial leasing contract, such as when a business wishes to open a storefront. Insurance requirements may also be found in contracts with major clients or third parties.
3. When There are Nearby Active Volcanoes
While volcanoes have been forming near the Hawaiian Islands for millions of years, not all are active. Operating a business near an active volcano can put business owners at great risk. Some active volcanoes in Hawaii include Kilauea, Mauna Loa, Hualalai, Mauna Kea, Kama’ehuakanoloa, and Haleakala.
4. If You Are Near High Earthquake Areas
Earthquakes occur in Hawaii nearly every day; however, not all occur at a catastrophic level. Three main types of earthquakes occur in Hawaii: volcanic, tectonic, and mantle.
The majority of these earthquakes occur in areas of high volcanic activity, such as Kilauea, Mauna Loa, and Kama’ehuakonoloa. Operating a small business in these areas puts business owners at a significantly higher risk, making insurance a must-have.
5. When You Live in Areas Affected by Floods
Floods and similar coastal hazards can put Hawaii small business owners in danger of significant damage to their commercial properties. Having adequate small business insurance can help protect these business owners from the effects of flash floods and associated debris flows that commonly occur in areas such as Niu, Hahaione, and Kuliouou Valleys.
6. When You Want to Draw in New Clients
Attracting new clients or customers to a business can be tough, especially in competitive industries. Businesses can stand out from their competition by building a reputation of professionalism and trustworthiness.
Having adequate insurance coverage can help build trust between businesses and customers by showing that the company is committed to its craft and striving for customer satisfaction.
7. When You Invest in Costly Equipment
Hawaii small businesses spend significant sums on equipment to operate their organizations as efficiently as possible. A natural disaster or other peril could damage this costly equipment.
Without the right insurance coverage, a business owner would be stuck repairing or replacing their equipment out of pocket, an expense that most small businesses are unable to pay.
8. When You Require More Office Space
Many entrepreneurs begin their small businesses at home. However, the growth of a business can cause business owners to outgrow their home office, resulting in the need for a commercial space.
However, having adequate insurance coverage is essential before upgrading to a commercial office space to ensure that the organization is protected from potential liability if consumers visit the new brick-and-mortar location.
9. You Have a Physical Business Location
Whenever a Hawaii business owner has a physical location where customers can visit, they face certain risks. A customer can slip and fall on the premises, resulting in costly medical bills for which the business may be held liable. A general liability insurance policy is essential to cover medical bills, income losses, and attorney fees that may accumulate as part of a lawsuit.
10. Your Current Coverage Is Outdated
Small businesses grow and change over time. Suppose a business owner purchased small business insurance when starting their business. In that case, they may find that the coverage no longer meets their current needs.
It is important for Hawaii business owners to regularly review their insurance policies to determine if updates need to be made, such as increases in coverage.
Speak with an Insurance Expert at Atlas Insurance Agency
While most Hawaii small business owners do their best to safeguard against common threats, not all dangers can be avoided. From major earthquakes to widespread flooding, natural disasters, and other threats can result in significant business losses throughout Hawaii.
Contact the experts at Atlas Insurance Agency today to learn how we can assist you with your small business insurance needs.