In the Know
Weathering the Storm
After eight hurricanes in 2004 and 2005, hurricane season is a constant threat for Florida business owners. "You can't start worrying about it on June 1 every year," says Alan Rubin, an attorney with Akerman Senterfitt in Miami who helped lead the Beacon Council's economy recovery efforts after Hurricane Andrew.
Put together a disaster plan
The Florida Division of Emergency Management has created "Starting Point," an interactive tool to help Florida businesses assemble customized task lists. The planning focuses on four tasks: preparedness, mitigation, response and recovery. Go to floridadisaster.org/BusinessSurvey.
When a storm threatens, put computer equipment in waterproof bags or boxes. Make sure hard drives, software and equipment are stored off the ground - at least at desk height. Back up all computer records and store them off site.
Put financial records in a safe place
If you have to evacuate, take a set of financial records with you. You may need them to apply for disaster assistance.
Keep up-to-date lists
Compile employees' home telephone numbers, cell numbers and other emergency contact information. Put together an organized system, such as a phone tree, to check in with everyone after the disaster.
A Word About Avian Flu
Florida's emergency officials are urging businesses not to wait until the last minute to prepare for a potential pandemic. Check out the following sites:
Florida Department of Health
Need a Generator?
The South Florida office of the U.S. Small Business Administration has set up a Disaster Mitigation Loan Program, using the SBA's Community Express loan program as its basis. "They are typically working capital type loans," says John Dunn, assistant district director for the SBA in Miami. The SBA office says businesses can use the loans to fund costly hurricane preparation supplies, such as generators. Loans are typically $20,000 to $25,000.
For Florida businesses, a key feature of this Florida Department of Emergency Management site is "Starting Point," an interactive tool that lets you compile a customized task list designed for your business. There is also information on flood insurance news, disaster supply kits, the Florida Building Code and maps showing evacuation routes and storm surge zones.
SBA Disaster Loans
Physical Disaster Business Loans
A business in a declared disaster area that has suffered physical damage may be eligible for a loan up to $1.5 million. Funds can be used for repair or replacement of real property, equipment, fixtures and inventory. Loans over $10,000 require collateral. Interest rates vary.
Economic Injury Disaster Loans
Small businesses and small agricultural cooperatives suffering substantial economic injury may be eligible for an economic injury disaster loan up to $1.5 million. The money can be used to cover operating expenses the business would have paid if the disaster had not occurred. These expenses include accounts payable and payments on short-term and long-term notes. Loans over $5,000 require collateral.
Q&A from SBA
Where do I apply?
Businesses apply directly to the SBA. In most cases, they should NOT apply to banks and other SBA lenders.
What documents do I need?
In addition to the SBA disaster loan application (which can be downloaded from the SBA's website), businesses need a copy of their federal income tax form, a short history of the business, business and personal financial statements.
Should I wait for my insurance settlement before I apply?
No. There are filing deadlines for SBA disaster loans, so it is best to file as soon as possible. In the case of a disaster recovery loan, the SBA can approve a loan for the total replacement cost, but any insurance proceeds that duplicate the SBA loan must be applied to the loan.
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National Flood Insurance Program
Citizens Property Insurance Corporation
Citizens is the state-created insurance pool that provides insurance in high-risk areas and when insurance cannot be obtained on the open market.
What You Need Now
Suddenly insurance is one of the hottest topics at Florida business gatherings. After the 2004 and 2005 hurricane seasons, many entrepreneurs and business owners know more about their policies than ever before. If you've been lucky enough not to have to pull out the insurance policy yet, do it now. Keep a record of the basics - name of company, policy number, telephone contact number - where it will be handy for emergencies.
Liability coverage protects a business from loss as a result of injuries, deaths or property damage caused by a business's operations, employees or products. "Premises and operations" coverage pays when a business is legally responsible for an injury claim, if, for example, someone slips and falls on company property. "Products and completed operations" coverage, commonly called product liability, helps pay for monetary losses that result from injury or damage caused by a company's product. One type of liability coverage required in Florida is commercial automobile insurance. It covers vehicles owned by the company or personal vehicles operated by the company's employees while on the job.
Property insurance protects the value of physical assets. "Replacement cost" coverage pays to replace or rebuild buildings and other property, as long as the property is insured for its replacement value.
As many Floridians learned in 2004 and 2005, property insurance does not cover damage from flood waters, whether from rivers, bays, offshore water from the Gulf of Mexico, Atlantic Ocean or other bodies of water. The National Flood Insurance Program (NFIP) operated by the federal government provides much of the flood insurance nationwide. For the best protection, make sure both the building and contents are covered. Through NFIP, a small business's building and contents each can be insured for up to $500,000.
Type of construction, size of structure, proximity to water and location determine the cost of windstorm insurance. In coastal areas of Florida, if coverage is not available from a private insurer, policies are provided through Citizens Property Insurance Corporation. Citizens offers wind-only policies in areas that qualify - primarily coastal areas in southeast and west central Florida.
When a business must close because of an insured property loss, a business interruption policy, called "business income insurance," pays ongoing expenses such as rent, utilities and some or all payroll expenses. "Extra expense insurance," another type of business interruption coverage, reimburses for special expenses that help a business minimize losses by getting up and running. For example, if a business can restart operations in a week, rather than a month, by paying a surcharge to ship replacement equipment by air express, the extra expense insurance would cover the air express charge. Remember that most business interruptions occur in the first 30 days after a disaster, so it is important to get a policy that kicks in within a few days of the