The Real Reason You Buy Insurance
July 17th, 2010 | 
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In cases of disaster and catastrophic loss, money can make a big difference in how quickly or even if your business is able to rebound. Unexpected events and circumstances beyond your control do occur, that is why casualty insurance protection is as essential a business need as is equipment and competent personnel. However purchasing insurance coverage alone is not enough. Things change, property values go up, staff increases, the amount of inventory on hand grows, liability exposure multiplies, therefore, it is important to review your insurance coverage regularly to make sure you have sufficient coverage to protect your business in case a catastrophe strikes.
The basics insurance protection most business opt into are property, liability, and business interruption coverage. This basic coverage may not be tailored specifically to your individual business needs. This is especially true when it comes to business interruption coverage. It is important that you review the fine print in your policy (or have your agent explain it to you), especially, what does “interruption” mean. Each insurance company’s interpretation of this policy coverage varies. With a thorough understanding of your insurance company’s interpretation, it can make a substantial difference in the amount of lost revenue you are able to recover and how much assistance with business relocation you will receive. Once you understand your business interruption insurance coverage, you may discover it is necessary to adjust your policy limits or purchase endorsements to customize this coverage for your business specific needs.
Our natural “immortality mentality” causes us all to believe nothing is going to happen to us therefore, few business people consider the inclusion of key man and disability insurance coverage, which pays if disaster causes the death or disability of the owner or other covered key employee. Disability insurance coverage can also be coupled with a business overhead endorsement which reimburses business overhead expenses in the event one of the covered key personnel becomes disabled. Another often overlooked coverage is automobile vehicle coverage. Be sure your coverage is up to date and all business vehicles are listed on the company’s policy. It is also important to review the liability coverage limits on your businesses auto policy. The “sue you mentality” of today’s society require you carry much higher coverage’s then standard basic liability limits to insulate the business owner and the business assets.
The purchase of higher then standard basic liability limits should also extended to your business casualty insurance coverage. Lately liability exposures have been interpreted in the courts to include areas never before considered. Protection in this area should not be under emphasized. If disaster should strike it is important that you document everything. Photographs before and after, video documentation, invoices, receipts, logs, journals, actual damages, and a narrative of what you have done to help mitigate your losses, everything possible to substantiate your claim. You want to give the adjuster everything necessary to justify their paying you the maximum amount possible for your claim as quickly as possible so that you can resume your business operation. Isn’t that why you purchase insurance coverage?
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