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Does your company have the right insurance coverage?
By Matthew Davis
Don’t automatically assume you’re protected—or that your insurance is right for your business. According to one national survey, nearly 60 percent of businesses are seriously underinsured. In the event of a major claim, the survey showed that those who are underinsured could find that the upper limit of their policy payout is 20 percent less than what they need in today’s market.
Just because you have an insurance policy doesn’t mean you have the right one. The difference between the right policy and the wrong one could cost your business hundreds of thousands of dollars if your insurance coverage is not adequate. When a loss happens, what you need is help. What you don’t need is to learn that there is no coverage to recoup your losses. The best time to get educated is now, before that scenario occurs.
Unlike other businesses, there is no standard policy for your industry. The rental and equipment dealer has unique risks and coverage needs that must be individually evaluated for the proper insurance coverage. Consider several factors when insuring your business.
Make sure you are insured with a specialist. Don’t insure your business with someone who doesn’t know your industry. Just because your brother-in-law sells homeowner policies doesn’t mean that you should let him write your insurance. You may be doing him a favor and not yourself. Seek out someone who understands and works in the industry and can provide you the maximum coverage available.
Choose financial strength and stability. Make sure you are with an A+ rated insurance carrier from A.M. Best. You can find out how your current insurance carrier is rated. This rating system shows a client a company’s financial strength and its ability to meet its obligations. Remember, an insurance program is only as good as the company that stands behind it. Be cognizant of the inferior choices out there that may leave your business vulnerable.
Customize your coverage. Again, it is imperative that you have an insurance policy tailored to your business needs. This must include your unique coverage needs such as conversion, in transport, equipment breakdown and off premises. Do your research and make sure your policy covers these areas.
Make sure your insurance carrier covers all lines of insurance. This means that the policy includes, but is not limited to, property, general liability, auto coverage, inland marine and workers’ compensation. Placing all of your insurance coverage with one carrier provides you with easier claim handling and decreases your chance of having gaps in your insurance coverage from one carrier to the next.
Choose a provider with ultimate service. In an industry that caters to the needs of a diverse group of rental customers, it is fundamental to provide high-quality service. Whether your customers are renting party goods or homeowner and contractor equipment, they rely on you to provide high-quality equipment in good working condition—when they need it.
With that in mind, you should demand that same level of service from your insurance provider. It is their job to ensure that your business and your equipment are covered. Replacement cost, conversion and off-premise coverage should be standard in your policy. If you don’t have an adequate amount of coverage, your business may be seriously underinsured. In the event of a major loss, there is a strong chance that your current policy will fall very short of what you need.
Choose a strategic partner. Most people hate insurance until the time comes when they need it. I believe we all need to see insurance in the light of people helping each other maintain financial security. For example, in early civilization, if a house burned down, the members of the community banded together and helped build a new one. If someone wasn’t willing to help, he or she was perceived as a bad neighbor and the community wasn’t as willing to help him or her out in the future. In today’s insurance world, there are plenty of “bad neighbors” who only want to collect premiums and are not concerned with helping you. Once you have received a quote and paid your premium, your coverage is bound and you believe that your business is adequately covered, right? Maybe! Don’t make your business vulnerable because you are not educated about the company that is insuring your business and the type of coverage it provides. Do your research. There are A+ rated companies out there who have the knowledge and capability to protect your company for that “just in case moment.” For the sake of your business, seek out those insurance companies that have custom policies for your industry and can provide you with proper coverage, industry expertise and financial strength and stability.