Risk & Business

As a business owner suffering a downturn in sales/business, such as what many are going through now, one of the first bills to be left unpaid is the monthly insurance premium. This is usually the case since insurance is perceived as a non-tangible asset, not utilized unless a loss occurs. The problem with this approach is that it leaves the business owner vulnerable to a multitude of potential hazards by leaving themselves unprotected with the loss of their insurance coverage. I would suggest taking another step, somewhat less drastic. If times are tough and the wallet is feeling the pinch, pull out your policy and review your coverage carefully. Make a list of all the items covered under your property section and pare down or even eliminate those items you think you can do without. Many businesses have extra vehicles and equipment listed on their policies that, given some thought, they can do without. If you can continue to provide the level of value and service necessary to ru...

During the course of the work day a situation might occur, such as a customer slipping on your premises and falling. While you promptly help them up and they assure you that they are okay, don't make the mistake in thinking that everything is fine and dismiss it out of hand. Remember, policy conditions require that you promptly notify the insurance company of any occurrences that occur that may result in a liability claim. The reason for this is to give the insurance company sufficient time to investigate the possible claim while everything is still fresh in everyone's mind. The company has the right to deny coverage for just this very instance, failure to promptly notify. Put into effect at your place of business a system of reporting any potential claim to the appropriate department, i.e. claims manager, office manager or even you. All insurance companies that may have a potential stake in the claim should be notified promptly. While a claim can be denied for failure t...

A common practice among many small business owners is to put their insurance policies out for bid annually among as many agents as they can identify in the local yellow pages. Unfortunately they are oftentimes shooting themselves in the foot by approaching their insurance program pricing in this manner. This common perception, having as many agents as possible quote for the best possible price, often leads to a steadily decreasing market from which to draw from when they are in the market to solicit bids on their insurance. It's important to be aware of the fact that while there may be many agent listings in the phone book, most, if not all of them, represent many of the same companies. While one agent may place an application for coverage with a company, a competing agent, most of the time, will find themselves blocked from also approaching the same company. While this is good, since the insurance company could end up getting two very different applications on the same busine...

An often overlooked, but important, part of the property coverage in every business insurance policy is coverage devoted to debris removal. Most business owners, and insurance agents for that matter, tend to take this part for granted, without giving any real thought to the coverage and it's potential importance should a claim occur requiring it's implementation. If a major property loss occurs, there often tends to be a large amount of debris. The more debris from the loss, the cost to remove it increases. This doesn't take into account costs associated with types of debris removal. If the insured is in an old building, there may be hazardous material that needs to be removed, possibly asbestos, which would further drive up the cost of removal. It's important to remember that in most policy forms the coverage limit for debris removal is part of, not in addition to, the overall limit for covered property. If you don't take this into consideration when settin...

The whole purpose behind a well thought out risk management program is to predetermine the exposures that exist in your particular business and then decide how to best cover them. The buildings we own and the contents inside are fairly easy figure out values. Have you gone beyond the basics though? Do you understand the differences between Replacement Cost (RC) and Actual Cash Value (ACV)? Would it be better to insure our building/contents on an ACV basis instead of RC? We could probably save some insurance dollars by choosing the ACV option and also self insuring certain areas of our choosing. The whole idea is to try and strike the right balance between adequately insuring our business without being "insurance poor". When shopping our policies are all we looking for is the lowest price? Insurance is becoming increasingly commodotized, but at the same time, not all insurance products are the same. Are we really saving in the long run by opting for the cheaper altern...