RECONSIDER DROPPING YOUR COVERAGE
BY : GAVIN BENSON LLOYD SADD INSURANCE
Why You Should Reconsider Dropping Or Lowering Coverages
Take Another Look At Your Current Program
Though the economy seems to be on the rebound , it is still reeling and many employers are still experiencing budgetary pressures . In these situations , the first gut instinct is to begin to cut back on expenses . In some cases , of course , this is a good decision . With that being said , insurance coverage is not an area that you want to cut . Just because the budget is tight doesn ’ t mean your exposure is entirely gone .
BASING INSURANCE ON YOUR BUDGET Lowering insurance coverage ( or dropping some of it altogether ) can seem a very attractive option . In fact , when a company is facing low funds or running in the red , it may be a necessary option . Unfortunately , doing so will often open a business up to even greater financial trouble when it is least prepared to weather a potential financial storm . If you do not believe you can afford the right coverage , how do you intend to handle claims or losses ? This could result in not only short term trouble but also catastrophic financial loss .
In reality , increasing coverage is actually a potentially better solution . Prices are currently extremely low for commercial lines , and it is a great time to purchase additional coverage . Additionally , underwriters want to avoid seeing gaps in coverage which can reduce premiums even further
RISK MANAGEMENT Lowering coverage will most definitely expose your company to greater risk of claims . It also exposes your company to potential lawsuits . If you were to lower or raise your coverage annually based only on price , and then have a claim for which you aren ’ t covered , you may find that your shareholders or claimants can sue you for negligence because your company does not have a strategic risk management program . These plans should be put in place based on what a company needs , and it should apply to all coverage lines . The plan should also be followed regardless of budgetary concerns .
SPECIAL CONSIDERATIONS Some types of coverage , including employment practices liability insurance and directors and officers insurance , are vital in a tough economy .
When companies lay people off , the risk of discrimination or wrongful termination suits dramatically increases . Likewise , companies taking financial losses will likely see the shareholders and stockholders blame the board of directors for what is happening . Employment practices liability insurance and directors and officers insurance cover against those situations .
Sometimes , the answer isn ’ t even about reducing or increasing coverage — it ’ s just about restructuring your current program to meet your needs through the downturn . Lloyd Sadd is available to help manage your insurance costs while still maintaining proper coverage . +
Gavin came to Lloyd Sadd with a desire to help build the Lloyd Sadd Energy Services practice . He is motivated to learn about the inside and out of his clients businesses , both from a day to day operations stand point as well as from a long term strategy point of view .
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