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

Popular posts from this blog

Delaware Legislature Preparing To Revisit Dram Shop Liability

Here we go again. Representative Peterson is preparing to introduce limited dram shop liability for consideration. The legislation caps the liability at $250,000 but, as is usually the case, this creates a starting point where limits are eventually increased once it's decided by the powers that be that the current limit is too low. This also puts restaurants, bars, etc, at an increased risk due to the vague wording of the legislation, specifically "reckless" sale of alcohol by the business. Also, you can be sure that if this legislation is passed, that rates will go up commensurately for not only Liquor Liability coverage, but if actual damages begin to be paid out under this law, that insurance rates on the whole will see an increase.
Read more

Get employees back to work quickly to keep work comp costs down

Image
In the past I have spoken to clients regarding a particular workers compensation claim affecting them and have asked if they have brought the employee back to work yet. Too many times the answer is no, they have nothing for that employee to do since said employee is not 100% and unable to perform their specific job prior to their workers compensation injury/claim. The problem with this is that too often employers miss the point that even though an employee can't perform in the position they were in prior to their injury, it behooves the employer to create some type of alternative task/job the employee can do until such time they are able to resume their normal duties. Bringing that employee back to work means that work comp benefits /payments in that particular claim are being curtailed, thereby saving the employer potentially more being paid out, while adding to their experience mod and driving their overall work comp expenses up.
Read more

Important to notify insurance company of potential liability claims

Image
When trying to manage their insurance policies, many business owners make the decision not to turn in potential claims and decide to take care of them on their own. By paying for small claims, such as property damage, etc, they strive to keep claim frequency down and in turn keep renewal premiums down. One area of insurance they should not try to manage though is potential liability situations/claims. Most policy conditions require prompt notification of any potential liability claims to the insurance company and if a claim isn't turned in promptly, the policy language does note that the company can deny a claim due to late notification. It's important to do this early on since information/memories are still fresh and it gives the insurance company time to completely investigate the potential claim. The potential for a liability claim is most likely the small business owner's greatest area of risk, whether they operate a restaurant, cleaning service or any other busi
Read more