Millions of small business owners across Canada may be aware of the many risks which would require an insurance claim their companies can face over time. But the thing that many may not consider is that as their companies grow and change, so too do their insurance needs as a whole. Consequently, owners would do well to continually evaluate their changing insurance needs, and make sure the policies they’re buying match them as closely as possible.
This issue recently reared its head in Edmonton, where the popular Italian Bakery was the site of a major fire that destroyed one of its locations, according to a report from the Edmonton Journal. To make the incident more troubling, though, is that this location was its primary baking hub, where almost all of the bread it makes on a daily basis was produced. As a result of the total loss here, hundreds of customers and wholesale clients around the city will be out of luck until the family-owned business can get production going again.
“This location is almost the beating heart [of the business],” co-owner Renato Frattin told the newspaper. “We can’t do the production in our other location. We don’t have the pans, we don’t have the right machines and there’s not enough room there to supply our customers at this point. We’re just in limbo right now. We don’t have a plan … I’ve been up all night.”
The fire started in the small building late on a Saturday night, and in the end it took nine fire trucks nearly five hours to even get the blaze under control, the report said. It wasn’t fully extinguished until after 8 a.m. the next morning. Further, in addition to the bakery facility being completely destroyed, nearby businesses including a shop, deli, and cafe were damaged quite badly by both the smoke from the fire and the water used to put it out.
No one was hurt in the fire itself, but its cause is as yet undetermined, the report said. The fire also impacts the 25 people who worked at the bakery, meaning those people are at least temporarily out of jobs. Fortunately for the business, its clients, and employees, though, the owners say that they fully intend to rebuild despite no damage estimate having been advanced yet.
What’s the lesson?
When other small business owners deal with these issues, the insurance problems that result are often difficult to navigate. The fact of the matter is that while many companies are fully equipped to handle such incidents, those that are not will likely have major financial problems, and may even end up having to close altogether. For this reason, it is vital that entrepreneurs keep close tabs on how their businesses’ insurance needs have developed over the years, and adjust their policies accordingly.
“Small business owners are effected by the slightest change and unlike large multinational companies they don`t have risk managers to assess all the potential exposures,” says Kent Pitkin, Director Commercial Lines at APRIL Canada. “Understanding which potential issues could effect their small business will help them plan ahead for contingencies and have a backup plan in the event that the business is shut down. This is as important as having the correct insurance. For small business that are large enough to have multiple locations, they should diversify enough so that each location can stand on their own and assist the other locations if required. Those that are not large enough, should speak to other small business to coordinate and look to ways to help each other. It is also recommended that small businesses ensure that they have a comprehensive extension package within their insurance policy to assist during brief or extended shutdowns.”