Many business owners are not getting the proper amount of commercial liability insurance. Sometimes they don’t have any idea as to how much coverage they will need. Not having enough liability insurance can cost you a lot of money in the long run. It is very important that you have sufficient commercial liability insurance. There are four reasons that commercial liability insurance can fail its policyholders.
One mistake that business owners make is when they get a commercial policy which has low limits. Not getting the proper coverage is one of the number one mistakes that can cost you a ton of money. Most of the time you can raise your limits and it won’t cost you too much more.
Another reason that business liability insurance fails its policy holders is because policy holders are not reading their policies. They are overwhelmed with the amount of information and the legal terminology within the policy so they just skim through the policy. If you cannot understand the policy then you should ask a lawyer or an agent who is selling you the policy to explain the policy completely.
Business policy purchasers need to ask their insurance agents if the commercial liability insurance policy covers providing the business owner with an attorney in the event the business is sued. You will also need to know if your insurer will pay out if a judgment is brought against you. This is called misunderstanding duties to defend or indemnify.
Business owners sometimes purchase the wrong type of insurance. Most business owners only buy liability insurance instead of purchasing both liability and casualty insurances. Casualty insurance covers any losses, such as accident, that a business may have, whereas liability insurance covers any mishaps or losses that happen to others. Some commercial insurance policies can cover people suing you over contracts and even false advertising. Buying the wrong type of insurance is one reason commercial liability insurance can fail its policyholders.
Many business owners will come to discover that their basic policy will meet their business’ needs. Having business interruption insurance is also important. If there is a fire or something goes wrong that shuts down your business for a period of time, you want to have enough coverage to rebuild your business. This insurance covers your overhead cost and all sorts of expenses that you still have even when your business in not operational.
As long as you seek assistance from a well-informed insurance agent, you will be less prone to making these costly commercial insurance mistakes. You have to choose a policy which can cover your unique business needs. And remember to avoid the following costly mistakes: having limits that are too low, not completely reading policies, misunderstanding duties to indemnify, and purchasing the wrong type of policy. All of these mistakes can cost you a lot of money in the end.