In light of the massive fire that tore through eight local businesses last month in Jackson Heights, business owners should consider ways to minimize massive losses in the future through the power of knowledge and insurance.
“I didn’t have insurance,” said Robinson Valderrama, the owner of Stylo Boutique clothing on 84th Street between 37th and 35th Avenues. The store was destroyed during the accidental fire on February 13. “I never did the legwork to get insurance, never thought of it. Logically with what happened, now I see that it is an obligation.”
Not only did Valderrama lose his about $85,000 in merchandise but his livelihood – both he and his wife worked at the store. But according to Queens insurance broker Ricardo Bellido, owner of Bellido Insurance Brokerage Inc., the business owners who lost their property could have recovered most of their losses had they been better informed and insured.
“I learned that the people don’t know (about insurance), and it’s not just an ethnic thing, it’s not just the Latino market,” said Bellido, who has been in the insurance business for over 30 years. “Businesses are falling, not because of a lack of business, but because of lack of knowledge.”
According to Bellido, small-business owners have a common misconception that adequate insurance isn’t required when working with family members, close friends or illegal immigrants. However, he recommends that new business owners take out three types – workers’ compensation, disability and fire liability insurance – the former two of which are required by law.
“It’s not a choice. It’s mandatory by law to have workers’ comp and disability when you own a business,” said Bellido, the first Latino to serve in the New York State Department of Insurance, speaking from knowledge he as gathered during his career. “They put a red-tag on the front door and the business is closed. If you do not have workman comp, a (full) license is not issued.”
“Make sure that you are actually talking to a licensed person, whether it is a broker or an insurance agent,” said Bellido. “To sell insurance, you have to be licensed.”
Potential business owners can go to a variety of places when looking for the right type of insurance. The borough of Queens alone has an abundance of agencies where future business owners can receive assistance.
New York City Business Solutions Queens Center, located in Jamaica, is one of those agencies. Business owners can schedule meetings to ensure that they have received the right information, and are properly protected. Although they do not sell insurance, they do point their clients in the right direction.
“If the business has employees, we recommend workers’ comp and disability to the owners,” said Katherine Tejada, account manager at New York City Business Solutions. “They should shop around. Go to at least two or three agencies. They also need insurance in the event something happens to their business.”
Both Tejada and Bellido agree that all businesses should be insured, regardless if they are restaurants or cleaning services. The type of the insurance, however, depends on the nature of the business. Restaurants and child daycares might require higher insurance because the number of people something can occur to is greater.
According to Bellido, however, insurance rates are designed to help smaller businesses. If a business is struggling, and their revenue is low, their rates will be accordingly lowered. On the other hand, if business is thriving, then insurance rates would rise as well.
– With additional reporting by Claudia Cruz