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 TIPS
- BUSINESS INSURANCE |
| tip
#1
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Basically there are three primary ways you
as a business owner can take care of the financial responsibility of financing
a loss to your business property and liability concerns. The options are
to 1) transfer the risk 2) retain the risk, or 3) a combination of both.
You can transfer the risk buy purchasing insurance to cover your exposures
to loss. In retaining the risk (known as retention) you have the ability
to pay for any loss that may occur out of some method of self-funding; therefore,
not needing to purchase a type of insurance. This is usually done when it
would be less expensive to pay for the loss yourself than to purchase insurance
to cover the loss. Some companies may choose to use a combination of both. |
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tip
#2
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There is a coverage called the off-premises
service endorsement that has limited coverage for perishable items, but
certain restrictions apply regarding what causes the power loss (like fire,
lightning) and where the power outage occurs (it must be off-premises).
The endorsement that provides broader coverage for perishable items is the
spoilage coverage endorsement. This endorsement covers loss to perishable
items that results from change in temperature as a result of power outage
or mechanical breakdown. Check with your insurance agent as to the endorsement
that makes the most sense for your company. Depending on the company you
insure through, the coverage may have a similar name such as change in temperature
endorsement. Most often there is a limit of $50,000 on this coverage, if
you have a larger business, it may benefit you the most to get a complete
Boiler and Machinery Insurance Policy customized to your business. Your
agent should be able to advise you. |
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tip
#3
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Business income coverage is used
to cover loss to your business income as a result of another covered loss.
For example, if your business catches on fire, the loss is going to go beyond
the cost to repair the building and contents, what about the fact that no
one can shop at your store until the damage is repaired? What about the
money you will lose from a lack of customers? This is what business income
is intended to cover. Extra expense comes in to help pay some of the extra
expenses you incur as well, such as who will pay for the sign advertising
your business has moved down the street temporarily until your building
is restored? The business income form alone covers extra expenses only to
the extent that they actually help reduce the overall income loss. If you
purchase actual extra expense coverage, the extra expenses are covered regardless
of whether they reduce the business income loss. |
