Saturday, November 20, 2010

Insurance Tips for Business Owners

As a business owner your primary responsibility is to make sure the business turns a profit. You may be inclined to let a subordinate handle your insurance purchase, but ultimately you are the one responsible for how to cover your business. Here are a few practical things that you should keep in mind when it comes to your insurance policies.

#1) Don’t turn in small property claims. You’re asking the question, "Then why do I pay for insurance?" The Answer: You are paying to take care of those mishaps that would be a financial burden to handle on your own. Consider raising your deductible which keeps your claims frequency down and help lower your premiums. A lower claim frequency may allow your agent additional options when looking at other insurance carriers.

#2) Know your liability limits. Do you have enough to cover a large loss? Look at your policy and ask your agent for a quote on higher limits or an umbrella policy. You will be surprised at how little the cost is for some extra peace of mind.

#3) Insure your property to value. Even with replacement cost coverage the company will likely only pay the limit on the policy. In the case of a partial loss you could be assessed a penalty if you are not insured to value. For example, a business has a $100,000 building and only wants to cover the building for the bank loan of $50,000. A fire destroys half of the structure. Which half burned down, your half or the companies’ half? You can see the dilemma.

#4) Pay your bills in a timely manner. Although many companies have a grace period you should always have your payments in on time. The company is not required to reinstate your policy which may cause a lapse in coverage and a claim might not get paid. This also may make it more difficult for your agent to obtain replacement coverage.

The best advice is to always communicate with your agent and have a working knowledge of your coverages.

Steven Naught, is a Certified Insurance Counselor with the Naught-Naught Insurance Agency. He can be reached at 573-348-2794 by email at or online at