Most property risk management reviews entail selecting insurance values for equipment, inventory, and buildings. We need these items to conduct business, so we insure them against accidents and catastrophes. We also need time. I’ll argue that time is equally as important and often under-estimated.

According to a report from the Federal Emergency Management Agency (FEMA), 40% of businesses do not reopen following a disaster. An additional 31% of businesses close their doors after 2 years. I assume most of these businesses have insurance, so why is their failure rate so high? Time.

Their risk management process failed to properly address the value of time. Consider that your business temporarily closes following a fire. Customers purchase their goods and services elsewhere. Revenue disappears. Expenses like monthly loan payments continue and creditors want payments. Your employees need to pay their own bills so they look for new jobs. It’s a dire situation and the clock is ticking. You need time to:

  • Allow fire, police, or OSHA to complete their accident investigations
  • Remove debris from your property
  • Request, review, and accept contractor bids
  • Secure building permits and approvals from local planning agencies
  • Receive materials, supplies and equipment
  • Monitor contractor timelines until the project is complete

Most businesses underestimate how long it will take to fully return to normal operations. During that time there is a significant strain on business finances to pay continuing expenses without revenue. This strain cripples the 71% of businesses that have not developed a business continuity plan.

The good news is that your property insurance policy can help. I encourage you to conduct a business impact analysis. Key figures to consider are annual profit, continuing expenses, payroll, and additional expenses you’ll incur following a fire. These four figures will help you identify potential liabilities and place a value on your time.

Prepare for the worst. Plan for the best. And insure your time.






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