Commercial insurance is a vital part of protecting your business and your livelihood. It provides coverage for property, damage, and workers’ compensation. Finding the right balance between coverage and cost can be difficult. But, it is an exercise that could save your business if the worst happens.
Knowing some common commercial insurance problems can help you find the right balance.
1. Paying too much for coverage
There are many insurance companies out there offering commercial insurance coverage. Since you are going to be paying a lot of for coverage, it just makes sense that you find the most reasonable rates. It pays to speak with more than one company. Just be sure to compare what they offer and make sure you are not sacrificing coverage for a lower price.
2. Not planning for the worst case scenario
What would happen if a tornado or hurricane came through the area and your business location suffered extensive damage? That is the time when you need insurance to kick in. Unfortunately, many businesses find they don’t have enough coverage or the right kind of coverage. When buying insurance, it is important to plan for the worst case scenario. Hopefully, you will never need it, but if you do, it will be there.
3. Unique business situations are not covered
Most commercial insurance policies are generic in nature. They do not provide coverage for scenarios that are unique to certain industries. For example, online retailers can be hit with cyber liability claims if their website is hacked and sensitive information is exposed in the process. The good news is that most of these situations can be covered with special add-on lines of insurance. You just need to know what the possibilities are and make sure you have coverage for them.
4. Not having realistic expectations of what is covered
When something happens, and you have to file a claim, you may have firm ideas of what the insurance should cover and how much the insurer should pay. However, your expectations may not be realistic. Many insurance problems, in fact, originate from not fully understanding how the insurance company valuates claims.
Insurance policies often have provisions which discount the amount the insurer will pay on certain items or exclusions which the insurer will not pay at all. For example, computer equipment is an item that can lose value over time. The insurance policy may not cover replacement cost, only its depreciated value. So, instead of getting 100% of replacement cost, you may only get 50% of its original value.
5. Not placing the proper valuations on property
How much would it take to rebuild your business building? You may have bought it several years ago for a certain price. You covered it for that price. However, the cost to rebuild it may be significantly higher than what you initially paid for it. This is a good example of why it is important to put proper valuations on everything covered by your commercial insurance policies.
Many insurance problems are directly related to putting the right value on what is important in your business. You may need to employ the services of experts, like appraisers, to ensure you have adequate coverage.
6. Not covering for everything that needs to be covered
Do you have insurance that would cover your costs if your normal business was disrupted by a fire or natural disaster? You may have to relocate to another space to continue business. Your supply chain may be disrupted, further complicating things. It may take time to regain your normal sales levels. In the mean time, you still need to pay your employees. There is insurance coverage available to cover this kind of scenario, called business interruption insurance.
To protect your business, you need to avoid insurance problems. That means you need to have the right kind of commercial insurance at the proper levels to ensure you can survive the worst case scenario. Don’t gamble with your coverage. Talk with your agent and see if your coverage is what your business needs to survive.
Are you struggling to get your claims settled with your insurance company? The experts at Commercial Claim Pro can ensure that you receive the maximum settlement. Contact them today at (877) 877-6612.
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