You Get What You Pay For
This adage has been around forever and it is as true now as the first time the statement was made. Let’s face it, nobody wants to pay more for an item than they have to. However, when the item being purchased can have a big impact on the continued operation and success of your business do you really want to save a few dollars to risk losing everything you’ve worked so hard to build?
Your insurance coverages fall into this category of purchases. What makes it even more difficult to spend more money on this purchase is that insurance is an intangible product, meaning it can’t be seen, touched, sniffed or otherwise handled by the consumer. You purchase insurance and hope you never have to use it. Insurance is a product you purchase to provide you with peace of mind, knowing that if you ever do have an insurance claim you will be properly covered and able to resume/continue normal operations.
The problem with purchasing the wrong insurance coverage is that you won’t usually find out until you’ve had a claim and it doesn’t provide you with the coverage you thought it would. Maybe your building is underinsured and your payment won’t be enough to properly rebuild or make repairs. Maybe you have a general liability claim that isn’t covered because of an exclusion in the policy. Having the correct limits and coverages in a policy are reasons some policies cost more than others. The best way to compare insurance policies is to look at them from a value perspective. Value is an assessment that includes not only a comparison of the price but also looks at what the product includes for features and benefits. Along with coverage limits, coverages provided, exclusions and deductibles, you should look at the company providing the coverage. Is the company financially stable, meaning will they be available to pay claims when you need them? Does the company know about my business? This can impact their ability to properly settle claims that are specific to your industry.
Working with an independent agency that knows your business can help you make a proper value assessment as they represent multiple insurance companies and they are skilled at determining the differences in multiple insurance proposals. So, the next time you renew your insurance don’t be pennywise and pound foolish and make your decision based on who has the lowest price. That could cost you so much more in the event of a claim. Base your decision on which proposal offers the best value, meaning a combination of price and the proper coverage for your business.
You’ll sleep well knowing that you have the insurance coverage you need to protect the business you’ve worked so hard to build.