The recent spate of natural disasters that devastated parts of North America included a violent variety of events. There were three major hurricanes – Harvey, Irma and Maria – wildfires in Northern California, an earthquake in Mexico and tornadoes in Oklahoma.

One thing these calamities had in common: They inflicted billions of dollars in property damage and adversely affected many small businesses. History portends that many of those operations won’t completely recover – ever.

Almost 40 percent of small businesses don’t reopen after a disaster because the cost of recovery is so high, according to the Federal Emergency Management Agency. One of the major reasons is that the businesses didn’t have sufficient insurance.

“Many small business owners will face additional losses due to these disasters, some of which may not be as obvious as flood or wind-damage claims,” says Peter J. Strauss, an attorney, captive insurance manager and author of The Business Owner’s Definitive Guide to Captive Insurance Companies.

“While utilizing the commercial market for major lines of coverage – property, general liability, etc. – is crucial for major events like a hurricane or tornado, it is very likely that not all the losses your small business could suffer will be covered.

“It’s a big blow – often a terrible surprise. So as a business owner, it’s critical that you know you’re completely covered. If you’re unsure, a little homework is necessary.”

Strauss gives three steps small business owners should take to be properly insured in a disaster:

Weigh the worst-case scenarios. A natural disaster can affect a small business in many ways so the owner needs to schedule a complete risk assessment and consider every aspect of potential damage when seeking an insurance policy. “Things like costs incurred by the property while the business is closed; extra expenses for moving to a temporary location; loss of customers and loss of employees because their home was badly damaged and relocating is the only feasible option for them,” Strauss says. “There are a multitude of scenarios that could occur, and as the business owner you really can’t afford to leave anything exposed.”

Don’t roll the DICE. Strauss references the insurance acronym DICE as a checklist for analyzing your policy. DICE includes the Declarations page, the Insuring agreement, Conditions, and Exclusions. “The business owner should read the policy thoroughly or go one step further and have an expert review the policy,” Strauss says. “The Declarations page is as far as most people will read. But when you dig into the Insuring agreement and beyond, that is where you will find the real meat of what is actually covered. Pay attention to key words and phrases and research the terms.”

Consider insurance alternatives. Some small business owners shopping the commercial insurance market find that the coverage is too restrictive or expensive for their kind of business. One of the best options available is to form a captive insurance company, or more commonly called a ‘Captive.’ “A Captive is an insurance company that their business owns and controls. Not only does a Captive help control the cost of premiums, because the business determines the risks it is going to insure, but there can also be significant financial advantages,” Strauss says.

“The commercial insurance market can be a sticky wicket,” Strauss says. “We make the conscious choice to spend money on various insurance policies versus sweating the odds of not being covered in an emergency. But what if the real gamble was buying the insurance in the first place?”