Purchasing insurance can be a daunting task for many business owners, but consider what could happen if you haven’t reviewed your current coverage in several years. Look at your policy and see if the limits are adequate. You may want to get a quote from another company to compare price and coverage.
Here are some more things you should know about buying commercial property and liability insurance.
LOOK FOR VALUE
Once you have the quotes you solicited, compare the coverage and the price. What you should be looking for is value. One company’s price may be lower, but the coverage may not be as broad. Another measure of value is in the services the company offers, such as free building and equipment-replacement-cost surveys. Make sure you have replacement-cost coverage with no depreciation if you want to go back into business after a major loss.
If there are items in the quote that you feel you don’t need, ask if they can be deleted with a price reduction. If there wouldn’t be a reduction in price, leave the coverage on.
CHECK THE DATES
Be sure that when you change carriers, the date you cancel one policy is the same as the date the new policy is effective. In most states, policies become effective at 12:01 a.m. and expire at 12:01 a.m. So if your current policy ends on 12/31/09 at 12:01 a.m., your new policy should begin on 12/31/09 at 12:01 a.m., not 1/1/2010. The 1/1/2010 date would create a gap of one day in coverage. If a loss happened on that day, there would be no coverage from either carrier.
WATCH FOR PENALTIES
If you cancel your policy mid-term as opposed to simply not renewing it, you are likely to receive a penalty from the carrier you are canceling. The penalty is usually 10% of the unearned premium (premium for the days that are left in your policy period). That’s why it’s always best to change insurance companies at your renewal date.
When you’ve reached a decision and purchase the policy, make sure you look it over carefully before filing it away. At a minimum, you should check the name, policy dates, limits of insurance and deductible to make sure they match the coverage you thought you were buying. Then check the exclusions to be sure you know what coverage you don’t have. If something is excluded that you feel you need, call the company or agent and see if you can add it back on for an additional premium. Not all exclusions can be added back on, but there are a few with this feature.
DON’T BE SHY
Never be leery of picking up the phone to call with a question. Any company should be happy to answer your questions. One measure of good service is the time it takes to answer those questions. If you don’t get an answer or a call back quickly, how will that company respond to a claim?
Remember, you’re in control of your insurance policy, and it should be what you want. Don’t settle for anything less. If you need help getting what you want, ask questions. No two insurance policies are alike, and you should be able to buy one that’s a nice fit for your laundry. Once you have the policy, you should be able to sleep at night and not worry about whether you’re covered. If you don’t have that easy feeling, call your agent or insurance company.