Nobody wants to be over insured so the question to ask is how much is enough? This a question that a qualified insurance broker is well equipped to help you find an answer to.
For property insurance the answer is fairly simple. What is the replacement cost value of your property? Take that figure and allow a percentage for increases over the policy term. Many insurance policies already include that provision. Does yours?
What is your appetite for risk? This question goes to the amount of deductible that you should carry. This is one of the best ways to reduce premiums. If you wouldn’t submit a small claim, why pay a premium based on low deductibles?
For business owners the place of work is important to income and any damage can result in an interruption in the revenue stream. Time becomes of the essence in restoring damaged property so the business may continue producing revenue. The expression “time is money” is never so graphically proven as when a business owner is struggling to carry on operations in the midst of property restoration. Your broker can assist you in selecting the correct form of Business Interruption Insurance, and more importantly, the correct amount to make you whole again.
Selecting an appropriate amount of Business Liability Insurance used to be an objective process based on the value of the asset needing protection from lawsuits. Our society has changed and with it the complexity of legal tangles an individual or business owner needs to manage. Your broker can assist you in identifying these exposures and how to mitigate many of them as the first step in financing the risk with the correct form of liability insurance. It is a process that should and does take some time but consider it well spent.
As for the amount, liberal courts are awarding higher damages these days, so select an amount that represents the value of your asset and add a piece of mind factor. The most-costly part of any business liability policy is in the first $1,000,000 of the limit; excess insurance beyond that is relatively inexpensive.
The short answer? Engage in best practices, self insure as much as you can afford, and buy high limits to cover the catastrophic loss that will put you out of business.
As your insurance broker, I’ll be there to advise and guide you through this process.