Delaware Business Insurance Update From CNC Insurance Associates Inc. , " The Most Improtant Thing You Need To Know About Your Business Liability Limit" 4-3-16

In almost 28 years of selling and servicing business insurance, every month that goes by one of my clients will most likely ask, " how much liability limit should I buy for my business?". This is not an easy question to answer. Every business has their own risk profile  and budget, which has to be taken into account. There is also one other item that has to be considered when buying liability insurance. The limit can run out during the policy year! Allow me to explain. When you buy a property policy covering your building you determine an insurance limit. If the building is damaged due to a covered claim, the limit would be used to repair and replace the damaged portions of the building. The limit then "resets" to its full value and is available to cover the next claim to the building even if it is in the same policy year.
Contrast this with liability limits. If your business is sued during a policy year and your liability limit is paying the costs of the lawsuit, that limit is reduced and does not reset until a new policy is bought. Every business runs the risk of running out of liability limits during their policy year if they are faced with multiple liability claims during that policy year. So now you can see why determining the right amount of liability insurance limit is not easy.
Consult your insurance professional , check your budget, and review your risk profile. Most business owners can make an educated decision on what limit would protect your business the best. Until next time be careful out there and know your risks.

G. Kevin Nemith, President CNC Insurance Assoc. & The Small Business Insurance Center
Serving DE, MD, PA, NJ, & VA
www.cncinsurance.com

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