If you own your business, then you know having business insurance is an absolute must. Business insurance is purchased for several reasons from protection to getting better financing.
Why Your Business Insurance May Not Pay Out as Expected
Most businesses purchase multiple policies to ensure that they get everything covered.
Business Insurance
Business insurance is there for risks ranging from lawsuits against the company, property damage, loss of income, etc. It’s especially useful for a business to have, as you already imagine, but you cannot just sign up to terms sold to you.
Many times, business insurance can be faulty or have severe flaws, whereby the insurance fails to pay out or is delayed in paying out. In fact, when you file a claim on your business insurance, it may not pay out as you expected it to, which can leave you upset and confused.
You can have your business insurance audited by risk experts who are independent of any insurance broker or company.
Business Interruption Insurance Doesn’t Cover What?
There is a type of business insurance called business interruption. This type of insurance covers any loss of income that you may face, after a disaster.
A lot of businesses probably have the business interruption cover in their business insurance.
You would surely think that it would come in handy at times like this, with the pandemic that we are facing, surely this would be the time to file that claim for business interruption.
Simply put, many businesses aren’t getting the same work volume as they normally did pre-covid, and some are hurting in a bad way.
In fact, various businesses DID try to file a claim, however, their insurance did not payout.
This is because many business interruption policies did NOT include coverage for viruses or bacteria, which meant that there was no coverage for this pandemic for a business.
WHY? It’s because businesses signed up to the terms of the insurance policy sold to them by a broker or insurer without having those terms changed.
The businesses that got their insurance policies reworded benefited from claims payouts while those that bought wording sold to them by brokers/insurers lost despite paying insurance premiums for years.
Are You Really Covered in Case of a Product Recall or Liability?
Owning your own business means that you have to own up to any faults, even if outside of your control, or defects that may arise from your products.
It doesn’t mean that your product isn’t of good quality, it can simply be a mistake but one that is costly to fix.
Assuming that all of your product recalls and liabilities will be taken care of by the general liability insurance that you have since on paper it shows that it covers product liability, would be a mistake on your part to assume.
General liability, or Property & Casualty insurance, may not cover the recall of products, nor the liability attached to them, nor any form of liability that is relevant to your business.
You will most likely need to reword your policy or buy a new one while ensuring that the wording covers product recall.
Is Fraud or Cyber Actually Covered?
One of the cons of owning a business is knowing that theft happens, no matter how many precautions you take to prevent it.
You might think that your general liability or fidelity insurance is enough, and has you covered on all fronts of fraud, but you would be wrong.
In this day and age, we do a lot of online sales. Customers like to shop online, or even just paying in-store with a debit, or credit, card. Cyber fraud and/or data breaches are becoming worse, if not worse, than actual robbery.
You would think all of your online sales would be safe, and that you wouldn’t have to worry about them, however, you would be wrong.
You might think that you don’t need cyber-crime insurance if you own just a small business because nobody would try to hack the business, but hackers from all across the world can hack into just about anything and do just that.
Hackers can even hold you for ransom.
If you don’t have cyber-crime insurance that has been re-worded by risk experts independent of insurance brokers or companies, then, unfortunately, your business insurance will not be paying out like you thought it would be.
Is There Coverage in Case of Any Business Damage or in Case Your Directors Are Sued?
Are you sure you have the proper coverage for your business? And if you are, is that because your insurance broker told you so?
With your business insurance, we know that it has the potential to cover many risks. But you still have to re-word the fine print of the policies so you can be completely covered in case of an event that hurts your business.
Conclusion
You cannot simply buy insurance from a broker who is compensated by the same insurers that are trying to profit from the policies they designed.
There is more educational content on commercial insurance that is independent of insurance brokers or companies and that you may find relevant.
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