Is your business covered if disaster strikes? Imagine an earthquake, flood or fire damaging your business. Would it survive? The answer often depends on the type of insurance you carry. When shopping for the best California earthquake insurance coverage, it is important to remember that no two policies are exactly alike. Often, a better rate means less coverage. Most large insurance companies use standardized insurance forms, but every company offers a variety of coverage, from top-of-the-line products to economy packages.

There are literally hundreds of insurance policies available to the small-business owner. Whether seeking insurance for a start-up or looking to find better or less expensive coverage for your current business, begin by speaking with an insurance agent who will take the time to explain what a policy does and does not cover, and how it differs from the policy you currently have or others you are considering.

Enlist the services of an insurance agent with access to multiple carriers who can give you enough choices so that you can intelligently purchase a policy best suited for your needs. Unfortunately, insurance agents, unlike other professionals, cannot be held accountable for failing to convey less attractive aspects of the products they sell. For example, if a lawyer fails to advise a client of the adverse consequences of an action the client is taking, the client can later sue the lawyer for malpractice for not disclosing the dangers of the action. 

With insurance agents, the standards of conduct are not as high. The policyholder must specifically ask the agent "Would I be covered to the same extent as I am now covered under my current policy?" or "What is the downside to this policy?" Only then, if the agent does not properly advise the client of possible deficiencies in coverage, can the agent be held liable. 

If you contact an agent and merely say "I want to get a better rate than what I'm paying now," and the agent provides a lower quote but with substantially less coverage than the client intended, the agent cannot be held liable. An "all risk" policy provides coverage for every risk except for what is specifically excluded in the policy. A "named peril" policy covers losses only from the "perils" listed in the policy. For small businesses, the all-risk policy is usually preferable because California law puts the burden to prove exclusion on the insurer. 

With a named peril policy, the burden of proof is on the insured to show that a peril was initially covered in the policy. Number typically will list the endorsements for your specific business. Make sure the endorsements match the numbers listed elsewhere in the policy. Some California earthquake insurance policies will not cover business contents, only the structure, and most do not cover the cost to research, replace or restore information stored in valuable papers and records. While your insurance policy may cover the physical damage caused by a disaster, it may not cover the revenue lost while the business is being repaired.

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