Keep reading, and ask yourself, “Am I exposed in any of these areas?”
1. Low liability coverage.
This might be one of the most common mistakes I see. Years ago, when you first took out your commercial liability policy, a million dollars seemed like a lot of money. But not so anymore. We’ve seen lawsuits rise at a frightening rate, and juries now award stunningly large amounts to plaintiffs.
When is the last time you looked at your liability limits?
How much is enough? That’s a question best answered as a team, and your team should include an insurance agent.
2. Incorrect locations or insureds.
This one sounds strange. How could you insure the wrong location? Or completely miss a location? But it happens. Businesses expand. They add on to buildings. They add new buildings to existing property.
Business also rent space in other locations to accommodate growth, and we are in a growth economy. Is that additional rented space listed on your policy?
I’ve seen wrong addresses on existing polices, and even incorrect owners listed. Partnerships (and sadly, sometimes marriages) change. When they do, policies often need to change too. Your agent can ask the right questions when you bring in your policies for a review.
3. Under-insured property.
This is a costly and common mistake.
Property values are on the rise again- especially commercial property. When you insured your building years ago, it’s likely that the value you insured it for was lower than it would be today.
Why does this matter?
There is a requirement in most commercial insurance policies that you insure your property for a certain percentage of its appraised value. If you don’t and there’s a claim, your claim will be adjusted downward in what’s typically called a “co-insurance penalty.”
You should drag out those old “dec” sheets and revisit the insured amount and the policy language that could penalize you for being under-insured.
4. Deductibles too low or too high.
This one’s easy.
- If you have deductibles that are too low, you are paying unnecessary premiums.
- If your deductibles are too high- you risk being in a difficult spot at claim time.
5. Business continuation insurance- missing or not enough.
Finally, let’s talk about one of my favorite topics.
Think of business continuation insurance as disability insurance for your business. If you get hurt, you need an income to pay your ongoing personal expenses.
Your business needs this too. It has ongoing bills to pay.
Many companies go out of business because they missed this key coverage. Talk to your agent, and look at your current policy to make sure you have this, and that it’s enough.
I’ve said it several times in this article; call an agent to review your coverage. It’s their job to make sure you are properly insured. Don’t go it alone- get help with this. Do it today.
Bruce Sackrison is an insurance property and casualty broker affiliated with Professional Insurance Associates helping clients with insurance needs for personal, commercial and business insurance. Bruce can be reached at 707-931-0186, firstname.lastname@example.org