Are you paying too much or not enough?

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 alternative to last year's coverage offered by another agent? Have they done more than just given you an "apples to apples" quote? While pricing is important, in the long run we lose out when we find out after the fact that the "cheaper" coverage we opted for turned out to be more expensive in the long run should a claim situation occur.

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