Lightning poses a considerable threat to small and medium-sized enterprises (SMEs), with significant financial implications resulting from fire damage, as reported by the Insurance Information Institute (Triple-I) and the Lightning Protection Institute (LPI). The organizations emphasize the importance of having preventive measures in place.
“Recovery costs from lightning can be devastating to a business,” stated Tim Harger, executive director of LPI. He highlighted not only structural and electrical system damage but also potential business interruption and lost income. Harger advised SMEs to evaluate their risk before lightning strikes as a primary step to safeguarding their operations and future.
National Small Business Week, running from May 4 to 10, underscores the necessity for SMEs to acquire professionally designed, installed, inspected, and certified lightning protection and grounding systems. These systems significantly mitigate risk alongside appropriate insurance coverage.
The Small Business Administration (SBA) reports that 40% of small businesses do not recover post-disaster, with an additional 25% closing within a year, and over 90% failing within two years. Commenting on this, Triple-I CEO Sean Kevelighan noted, “Larger commercial businesses have been ahead of the curve in terms of predicting and preventing risk.”
Despite larger businesses being more aware of insurance benefits and risk prevention, Kevelighan mentioned that smaller companies often lack resources while being the most vulnerable to disasters. He pointed out that investing in insurance and risk mitigation, although it may seem like an extra expenditure when budgets are constrained, accelerates recovery and enhances a business's survival chances after a disaster.
There are five strategies to protect a small business from lightning:
1. Installation of a well-designed, certified lightning protection system, tailored to the building's specifics such as its location and the frequency of thunderstorms.
2. Incorporation of surge protection devices to safeguard electrical and electronic systems from surges and lightning strikes.
3. Business property insurance to provide funds for repairing or replacing critical physical assets.
4. Business income and extra expense insurance to cover temporary closure due to damages, including income replacement and other operational expenses.
5. Utility services endorsement for additional protection against disruptions to basic utilities.
These strategies are recommended to ensure small businesses are better prepared to withstand lightning impacts.