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November 2, 2011
ÍřĆŘĂĹ’s Berry presents LA small business concerns to Louisiana Property and Casualty Insurance Commission
Director of the ÍřĆŘĂĹ College of Business Administration’s Risk Management and Insurance Studies Program Dr. Christine Berry recently presented concerns about the condition of Louisiana small businesses’ risk management efforts to the Louisiana Property and Casualty Insurance Commission in Baton Rouge.
The concerns presented by Berry came from a risk assessment survey she designed which was conducted by her risk management and insurance majors and business continuity consultants from the Louisiana Small Business Development Center.
A total of 240 small businesses in parishes across the state of Louisiana were surveyed in 2010 as part of an ongoing statewide effort by the LSBDC and the ÍřĆŘĂĹ RMI program to provide education, training and assistance to Louisiana small businesses in managing risks, both from disasters and from day-to-day occurrences.
The effort is being funded in part by a three-year grant from the U.S. Small Business Administration.
Based on the assessment findings, 10 major concerns were identified:
• More than one quarter of “smaller” small businesses have no basic property insurance
• Many “larger” small business appear to have overlapping insurance
• Knowledge about most types of business insurance is lacking
• Business interruption insurance is unavailable or unaffordable
• Many businesses with employees do not have workers’ compensation insurance
• Newer (less than five years) businesses are under or uninsured
• A higher level of formal education of the business owner relates to more insurance and more planning
• South and central Louisiana businesses have more significant property coverage and planning issues than north Louisiana businesses
• Business continuity/disaster recovery planning is sorely lacking
• Many small businesses have access to only a narrow array of insurance products and their insurance is probably not “shopped”
The 10 concerns, according to Berry, point to a need for significant education and assistance to small businesses, particularly those most vulnerable to risks like hurricanes, floods, crime, and employee injuries.
In response to this need, the ÍřĆŘĂĹ College of Business Risk Management program has developed a proposal to create the Small Business Risk Management Institute.
The proposal is currently pending approval from the governing bodies of Louisiana higher education.
According to Berry, SBRMI will act as an advocate for small business owners by working to improve the affordability and availability of insurance and by focusing on policy matters related to small business risk management.
The Institute will also continue to conduct research through the ÍřĆŘĂĹ RMI program and will design the educational materials and deliver those through partnerships with the LSBDC and other entities.
Berry’s presentation to the LPCIC was made to bring attention to the issues facing small businesses and to hopefully identify potential partnerships between ÍřĆŘĂĹ and other agencies that can help create a more resilient small business community in the state.
The LPCIC was established in 2001 for the primary purpose of reviewing and examining the availability and affordability of property and casualty insurance in Louisiana.
The commission is composed of members of the legislature, designees from the Office of the Governor, the insurance commissioner, attorney general, designees from the Office of Motor Vehicles, Louisiana Highway Safety Commission, Louisiana District Attorneys Association, the Louisiana Workforce Commission, and representatives from insurance company and agency associations.
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