Waypoint Insurance - Risk & Business Magazine Waypoint Insurance Fall 2016 | Page 30

BUSINESS INSURANCE

Business Insurance
BY: BARB DE RUITER,
WAYPOINT INSURANCE

Packaging Vs. Custom-Fitting: The Lowdown

W

hen it comes to
protecting your
business with the
purchase of a business
insurance policy, it
can be difficult to know just what to buy.
Today’s business insurance market has an
overwhelming variety of options available
to business owners. Additionally, many
factors come into play when choosing
what types of insurance to purchase
and what options to select. The most
important consideration for a business
owner when purchasing insurance is the
advice he or she receives on how and what
to purchase to protect their investment.
In recent years, the commercial package
policy has become a popular risk solution
that applies to a large and diverse number
of companies and operations. Designed
for small to medium-sized businesses
with under $2 million (*) in gross revenue,
a commercial package policy is a great
way to bundle together multiple lines
(or types) of coverage at a reduced and
affordable rate. With the purchase of basic
business “contents” or “building” coverage,
a package policy will likely also include a
minimum limit of coverage for business
interruption, equipment breakdown,
crime and commercial general liability.
Additionally, there are enhancements which
can be made for industry-specific coverage:
valuable papers and accounts receivable for
offices, blanket bylaws and glass coverage
for building owners, and mobile tools and
equipment coverage for contractors.
With premiums as low as $500 (*), package
policies provide the basic coverage your
business needs while also allowing for
other important coverages (with predetermined set limits) that would be of
great benefit in the event of a claim or loss
scenario. Some examples of this follow:

•

Expediting expenses to hasten
the repair or replacement
of damaged property

•

Providing coverage for those
sums due from customers when

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accounts receivable records
cannot be effected or collected

•

Costs to prepare a Proof of Loss
form, which is required by insurers
in connection with any claim

These packages are attractive because of
both their broad scope of coverage and
lower premiums, especially in comparison
with customized business policies. Even
so, it is important to make sure that a
package policy is the right fit for your
business before you ultimately make your
purchasing decision. Just because these
packages have a broad scope and attractive
premiums does not mean they are always
going to be the right fit for every business.
A customized business insurance policy
may very well be a preferred, and sometimes
superior, form of coverage, depending on
the size, complexity and area of operation of
a particular business. It is not uncommon
to find that a package policy cannot
accommodate a business with multiple
revenue-generating operations or which
have an area of operation that stretches
outside of Canada. Customized business
insurance policies are arranged using a
line-by-line coverage concept, where the
business purchases individual coverages
at limits specific to the particular needs of
that business. Thorough research into both
coverage and coverage limits is required in
order to benefit fully from the customized
coverage purchased and is a critical part
of the process. These are not one-sizefits-all policies. Rather, they are custom
fit and designed for one particular risk or
business. For instance, a custom policy
which has been created for a restaurant
will look dramatically different than
one created for a construction company.
These policies are all about examining
the risks that a given company is likely
to encounter and to finding the best
insurance solution to mitigate that risk and
offer the largest benefit to the business.
There are many points of coverage to
consider when designing a customized
policy, including (among others) liability,

equipment breakdown policies, protection
against theft or crime, and natural disaster
coverage such as flood or earthquake.
Creating a specific, yet flexible and
diverse, insurance package specific to
your business is an important part of
any business continuity planning.
Both styles of policy should be considered
and a full review with your insurance agent
or broker is the best way to determine
which might be right for you. Without the
proper fit, a package policy could result
in an inadequate limit of a certain type
of coverage. Alternatively, a customized
policy may leave gaps in coverage. Both
instances would spell disaster for any
business. Thus, it is important to review
these forms of coverage through the
lens of your own business operations
and work with a specialist who will be
able to advise you on the best course
of action for your specific needs.
If you have a small or mid-sized business and
are interested in looking at your insurance
options, our Commercial Insurance
Specialists can assist in determining
insurance solutions that are right for you.
Call today and let us help you determine
the best fit for your business. We are your
local community brokerage and have
fourteen convenient branch locations across
Vancouver Island to serve you. We are from
the Island ourselves and understand the
diverse needs of Island businesses today. +
*Minimum policy premiums, coverage items,
qualifications, and availability are subject to
application and acceptance by an insuring
company.
Barb de Ruiter is a Commercial
Insurance Specialist located in Nanaimo.
She as been assisting clients since 1998,
and has extensive experience in all lines
of property and casualty insurance,
working with all sizes of business.
Contact her, or any one of the Waypoint
offices, by calling 310-8442 or visit us
online at waypointinsurance.ca