Inventory insurance: are you protected from riots and covid-19?

If you have inventory and have not checked your insurance policy lately, today would be a great day to do so. We have all kinds of risks floating around these days that you need to make sure you have covered.

Small businesses in many cities have been decimated first by COVID-19 and then by the social unrest in urban areas that includes some vandalism and looting. While these social issues are obviously hitting cities hard, it would be a mistake to assume that your warehouse is out of danger just because you are in a less populated area. In fact, I think it is likely that social unrest is going to impact all areas of the country eventually.

Here are major risks we are monitoring:

  • Risk of some kind of logistics breakdown (perhaps with delivery services) that stops our operations long enough to lose inventory because of expiration dates.
  • Risk of inventory being stolen or destroyed by violence.
  • Risk of loss of income because we cannot operate during an unsafe time.

It would be a mistake to assume that your insurance will cover all of these risks. Hopefully, it does, but you should never assume anything about insurance. If you want a reality check, ask your agent to send you the list of risk exclusions for your policy. As you thumb through page after page of exclusions, you will start to wonder if there is anything that actually IS covered.

Probably, you have insurance that will protect your inventory from vandalism. However, make sure that there is not an exclusion for social unrest and riots. Also, while you are at it, make sure the dollar amount of coverage is adequate for your inventory.

Very likely, especially if you are a smaller business, you also have loss of income insurance. However, again, check to make sure there are no exclusions for riots or pandemics.

Unless you specifically have purchased it, it is unlikely that your insurance policy covers spoilage (expiration date issues) but you can possibly get this added.

We made our call to our agent last week and someone in the office joked that we should protect our inventory by sitting on the roof with a gun. She may or may have not been half-serious, but please don’t risk any lives over inventory. It is just inventory and you have insurance for a reason. Just make sure you have your bases covered in that area. On another note, if you’d like to read about managing your inventory with better cash flow, check out this article.

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