Buying protection these days is certainly simpler than “buying protection” was during the prohibition. It’s not the muscle that keeps your business IN business, it’s financial stability, smart planning and loss prevention. Three days ago, Manila was under red alert (albeit only overnight) because a small group of disgruntled and detained soldiers walked out of their court hearing and holed up at a local 4-star hotel. Like last time (it’s their second attempt), it was hardly violent and resembled more of a press-con than a coup d’etat, which was a good thing because a violent, bloody engagement would only heighten damage costs and lives lost. The situation was resolved peacefully, and a day later things got back to normal in the city, although the hotel stays closed until today (it’s Dec 3) while surveyors estimated damages sustained among other routine investigation procedures and operations. A large sum of money is being lost every day that operations are halted.
This is an extreme case, but you’ve got to realize that situations that could potentially jeopardize your operation are plentiful. A pipe that bursts in your basement and floods everything (for home studio owners), a fire from a neighboring structure leaps to yours, a typhoon/hurricane hurtles through your area destroying anything in its path, a huge earthquake levels your city, or even just the neighborhood burglar making his holiday rounds (unfortunately, you left the studio double doors unlocked) are all incidents that have happened in the past and will continue to happen in the future: it’s the uncertainty that makes these risks seem incredulous or far-fetched, but when they do happen, they take the whole cake!
What’s important to realize is that there are steps you could take to protect your business from failing due to unforseen circumstances. This is the field primarily dealt by Risk Management, wherein you lower the chances of an act of God or accidental event from taking you out. A Risk Manager should be able to advise you upon consultation on what you could do to make your business more resilient physically. If possible, consider getting insurance coverage for your project studio: it’s relatively inexpensive (depending on your coverage) and worth the time and money, especially when you’re counting your losses while looking at the blazing structure where your studio is (or used to be). Here are some tips:
1. If your project studio is at home, ask your insurer if you need to declare your recording equipment. In cases such as Fire and Burglary/Theft insurance, the insurer would sometimes require you to list down the equipment inside an insured structure (known as Contents in insurance terms) along with their estimated values so that when a loss occurs, valuation by the adjuster is more accurate. Keep your receipts in a safe place.
2. If your project studio is in a commercial location and you still don’t have insurance or think that you’re insured, ask the building administration whether your monthly rental fee and association dues go to payment of some form of fire insurance. Usually, buildings are insured, but the contents of their tenants are not (they assume that you’d be getting insurance for that yourself, so it’s best to ask asap).
3. If your project studio is in a commercial facility with sprinklers, ask your insurer about Sprinkler Leakage and how you could have it included in your coverage. If a fire starts out on your floor and the sprinklers turn on, that’s great only if your studio’s being offended by the fire. Otherwise, you get smoke and water damage on your studio and equipment for nothing, and that’s going to cost you.
4. Keep a backup of all your computer data (if you’re going digital or analogue/digital hybrid) off-site and on-site. If your DAW is the lifeblood of your studio, it might be worth looking into Electronic Equipment Insurance, which provides a comprehensive cover for your hardware as well as your software.
5. Theft and Burglary is not exactly necessary for the small project studio, but a good insurance cover to have nonetheless, especially if you’re dealing with expensive vintage equipment. With the number of people going in and out of your studio, it’s difficult to filter out the meaning wells from the evil doers.
6. What to do if a client gets into an accident in your project studio? He touches a faulty plug and gets 110v straight to his spine, she slips on a newly polished spot on your hardwood floor and gets a concussion, they get a deep cut from running around the control room and accidentally step on a broken bottle of beer they dropped (accidentally also, we assume); Comprehensive General Liability is an insurance cover that responds to the accidents that happen to your clients when they’re inside your premises. If ever something happens to them inside your studio, CGL allows you a certain amount per incident wherein they reimburse you for costs. Have you ever claimed against a restaurant for medical bills you incurred after you had that plateful of bad oysters the week before? CGL reimburses the restaurant for claims made by its clients (in this case, food poisoning).
7. You can also check out the other common forms of insurance covers such as Typhoon/Flood and Earthquake, but just make sure that it applies to you and is necessary.
There are lots of other coverages you can avail of in non-life insurance aside from the ones covered here, but I won’t go into them anymore as I don’t know much about them. If you’re planning to run your project studio as your own business, check out some pre-need and health insurance covers as well.
Good luck and stay safe!