As a business owner, you do everything you can to set your company up for success - from securing financing to managing day-to-day operations. But there's one threat that often flies under the radar: underinsurance.
What exactly is underinsurance and why deoes it matter? Underinsurance occurs when your business insurance coverage falls short of its actual risks and exposures. This gap leaves you vulnerable financially and operationally if disaster strikes.
Unfortunately underinsurance is extremely common. Around 80% of commercial properties and 82% of residential properties carry inadequate cover. And when claims exceed policy limits, the consequences for a business can be devastating. You may receive reduced payouts, pay extra out-of-pocket costs or even have your policy voided entirely.
The risks of underinsurance cut across all aspects of business insurance - from property, equipment and inventory to business interruption, liability, and cyber policies. Specialist risks like machinery or equipment are also prone to underinsurance as asset values fluctuate.
So how can you determine if your business is underinsured?
Start by thoroughly reviewing existing policies and risk exposures unique to your industry. Conduct an up-to-date inventory of all business assets. And don't hesitate to enlist a broker to evaluate needs and fill gaps.
Making adjustments to match your coverage with your company's growth and evolving risk landscape is key. With a proper risk assessment and the right insurance partner, you can ensure your business is truly protected no matter what the future brings.
The time for addressing underinsurance is now - before disaster strikes. Don't let inadequate cover derail your organsation's financial health and growth ambitions. By taking steps today, you can rest assured knowing your business is covered.