When was the last time you read your business insurance policy? Word for word? If you’re like many business owners, you probably have never read it that thoroughly and simply assumed that you had all the important bases covered.
It's important to revisit your policy at least once per year. As your business grows, so do your liabilities. Don't get caught underinsured if a disaster strikes!
While there are many types of insurance for business owners, one that is often overlooked is business interruption insurance. Should there be a disaster that closes your business temporarily, this insurance can cover your lost income, according to NFIB.com. In addition, it covers any expenses for keeping your business running while your office space is repaired and can also pay the rent of your temporary space.
Every business owner should have insurance and be thoroughly covered, but you do not want to be over insured. Talk to your agent and others to see what their recommendations are. BBB always recommends that you get at least 3 quotes before making your final purchasing decision. After carefully reviewing the suggestions provided to you, then make your decision.
Would you ever consider business interruption insurance?
Smart business owners have the proper insurance to protect their company and its assets. But what happens if your insurance company goes under? What does that mean for your business?
Here are some frequently asked questions:
What happens when an insurance company becomes financially troubled, fails and is no longer able to uphold its end of the bargain? That's when the state property and casualty guaranty fund system - a system few know much about - steps in, according to The National Conference of Insurance Guaranty Funds (NCIGF). Put simply, guaranty funds provide an essential safety net for policyholders, one that meets the needs of those least able to deal with losses should their insurance company fail.
Will I still have insurance coverage? Insurance guaranty associations have been established in every state and are designed to protect policy-holders if their insurance company becomes insolvent. An insurance company must be a member of the guaranty association for every state in which it does business. If a company becomes insolvent, the insurance guaranty association ensures continuation of coverage, either by taking on policies directly or by transferring the policies to a financially stable insurer.
What about any claims? The laws vary from state to state. However, most life and health guaranty associations provide coverage at limits of at least $300,000 for life insurance death benefits, $100,000 for life insurance cash surrender values, $100,000 for annuity withdrawal or payment values, and $100,000 for health insurance benefits, according to NCIGF.
Most property/casualty guaranty associations provide coverage on a per-claim basis for personal injury and property damages up to $300,000 and provide full benefit coverage for workers’ compensation benefits.
Where does that money come from to cover claims? If an insurance company goes bankrupt, any amount of coverage that cannot be attained from the company’s liquidation is borne by other insurers in the state according to the amount in premiums those insurers earn from that state.
How can I be sure my insurance company is safe? There’s no way to be absolutely sure that an insurance company is healthy. To help business owners evaluate their insurer, there are several businesses that rate insurance companies on their financial strength and creditworthiness, including Moody's, Standard and Poor's and A.M. Best. Business owners can also confirm with their state insurance department that the company is licensed to do business in the state.
