Business insurance is supposed to protect you from the financial risks of doing business by shielding you from unexpected costs associated with losses. There is coverage to protect you from just about every eventuality, but just because that coverage is available doesn’t mean it is part of the policy you purchased.
It’s not unheard of for business owners to file a claim only be told that they are not covered for the loss. What’s even more frustrating is being absolutely certain you were covered only to find out you weren’t. It happens more often than you might expect, but there are steps you can take to protect yourself.
How To Make Sure You Get The Policy You Need
Ensuring you receive the policy protection you need comes down to knowing what you’re purchasing.
1. Review Your Policy Carefully
Don’t assume that just because you and the insurer talked about certain coverage that your policy actually contains that coverage. Always review the policy with your own eyes or that of your attorney to make sure your business is covered for the risks it assumes.
2. Pay Attention To Policy Exclusions And Additional Exclusions
Don’t skip over the fine print. Definitely read sections entitled “policy exclusions” or “additional exclusions” or “limitations of coverage” to make sure certain conditions you assumed would be covered are actually covered. These sections are where most insurance companies will be off the hook for providing you with protection.
3. Double Check Coverage Amounts
Another common mistake is not buying enough coverage to pay for your actual costs. Insurance companies will often lower the coverage amount in order to provide you with lower premiums. Always make sure the coverage amount you buy will be enough to meet your needs if you ever need to file a claim.
4. Add Additional Coverage When Necessary
Most states require businesses to carry certain coverage at a certain amount and many insurers offer standard business policies that meet these requirements. But those policies don’t work for every business. In many cases, those standard policies are just a starting point to building a full policy that protects you from your own specific risks. If, upon review of the standard policy, you think the coverage amount is not high enough, want to change the deductible amount, need to add specific coverage or take away some protections, do that. Almost every insurance policy can be customized to meet your needs, just be aware that you’ll be paying for it through your premiums. If the policy can’t be customized, riders, add-ons, or additional policies can be purchased to make up the gap, but only if you know what your current coverage is lacking.
You Are Ultimately Responsible For Your Coverage
Remember, the onus is on the business owner to ensure the proper protections are in place for their business. Although the insurance company may promise things such as “personalized” service or underwriting or “tailored” coverage that does not guarantee appropriate coverage. Obtaining appropriate coverage is a joint effort of the insurer and the business owner who should work together to make sure the business is protected. Business owners will have to balance how much they are willing to pay for coverage with coverage types and amounts and make coverage decisions based on a cost-risk analysis. This inevitably leaves possible gaps in coverage, but for most businesses, the risks are minor enough that they are willing to overlook them.
Those gaps however, can come back to haunt you if the loss happens to be excluded. It’s a risk of doing business. Just understand that you must enter into any insurance relationship understanding the policy limitations.
Schedule A Policy Review With A Business Attorney
If insurance policies make your head ache, contact the business law attorneys at Schlueter, Mahoney, and Ross, P.C. to arrange a policy review. We will discuss your business, identify areas of risk, and review your policy to make sure those risks are covered. If they aren’t covered, we can recommend additional policy coverage that will keep you protected in the event of the unexpected.
Contact Schlueter, Mahoney & Ross, P.C. at (303) 292-4525 or by filling out the contact form on our Contact Us page.
Our construction law attorneys, Michael A. Schlueter, Elliot D. Fladen, and JR Geraghty represent clients throughout Colorado, including Denver, Aurora, Broomfield, Boulder, Greely, Commerce City, Lakewood, Highlands Ranch, Littleton, Arvada, Westminster, Pueblo, Thornton, Colorado Springs, and Fort Collins.
Michael Schlueter