When summer comes, humans migrate outdoors. Bars and cafes spill out on to the streets, and workers take every opportunity to soak up the sunshine. For small businesses, the summer season brings with it new risks that may not be covered by their current insurance policies.
Many small businesses hire seasonal employees or interns to help with the additional work or reduced staff challenges that summer brings. Hiring these employees, even part-time, requires workers’ compensation coverage, which just 17% of SMBs carry, according to a recent poll from Insureon and Manta.
“Whenever situations change, including the seasons, it’s usually good for small businesses to re-evaluate their insurance coverages to make sure they’re in good shape,” said Insureon president Jeff Somers. “For example, if SMBs take on seasonal or part-time workers, it’s essential they understand and abide by the workers’ compensation regulations for their state. There’s variation across states in terms of when employers are required to purchase workers’ compensation insurance coverage, and it’s important SMBs keep on top of that if they’re hiring new workers.
“Another thing to consider during the summer season is heat related illness. A lot of small businesses have employees working outdoors who may become vulnerable to heat-related illness, which can result in increased workers’ compensation claims.”
A spot of sunshine and the great outdoors often leads to fun and games. Companies take advantage of the season to promote staff happiness and wellbeing by sponsoring events and hosting company sports tournaments.
But nobody’s laughing when an employee breaks their wrist diving for an MLB World Series-winning catch in the company’s “non-competitive” work baseball game. The SMB could be held liable for the “work-related” injury, therefore highlighting the need for SMBs to check-in with their insurance broker or advisor to ensure they have appropriate coverage in place before hosting extra-curricular summer events, Somers explained.
“A seasonal risk that SMBs tend to forget about is the likelihood of severe weather events,” Somers told Insurance Business. “Hurricane season officially started on June 01, and so its crucial for SMBs to be aware of that risk and to ensure they have an appropriate disaster recovery plan and insurance policies in place. This often slips people’s minds until it’s too late and they’re caught in the middle of a hurricane hoping they’ve got the right insurance coverage.”
A survey conducted by Insureon earlier this year found that many SMBs are vastly underinsured. The poll found that only 28% of SMB respondents held a business owner’s policy (bundle of general liability insurance commercial property insurance), and even fewer respondents reported carrying several other common small business insurance policies, like business interruption insurance (6%), workers’ compensation insurance (17%), and cyber insurance (2%).
“SMBs need to understand how important it is to have the right insurance coverage. They can’t just wait for key moments like a hurricane or a workplace injury and then hope they’ve got it covered,” Somers added. “As an industry, we can help to ensure our SMB clients don’t discover their insurance gaps too late.”