As a business owner, you know all-too-well that the cost of doing business has skyrocketed over the past three years. No matter what industry you are in, the bottom line is that it is going to cost more to complete your projects than it has in the past. Whether due to inflation, supply chain issues, labor costs or other concerns, you need to be extremely careful when budgeting for your company to ensure that you are doing whatever you can to meet the expenses you face.
While day-to-day costs increase, one thing that many business owners may miss concerns larger, big picture costs such as insurance coverage. You may have had policies in place for several years that you feel cover any “worst case scenario” that you encounter – but “worst-case scenario” has also changed over the last three years. What was considered a conservative policy strategy may not even meet the low range of a verdict that goes against your company.
Insurers are taking note of these increased verdicts as well, and have made drastic changes in the way that they draft policies or issue coverages. And these changes mean higher costs to you, the insured, in order to get the sort of protection you need to ensure you are not ruined by some sort of event that has a negative impact upon one of your projects.
How Coverages Have Changed Recently
Let’s think about what that means in the grand scheme of things. Say you have a project and the coverages you have in place amount to a couple million dollars. In the past, this might have be enough to capture what you might have viewed as your worst-case scenario, which means you generally have the protection you need to carry on business as usual.
However, that two million dollars’ worth of coverage three years ago is going to be woefully short in this era of increased costs. You may need five to ten million dollars’ worth of insurance to have the same protections now that you did back then. It’s extremely important that you review what you have and what you need before starting any projects in order to avoid the harsh financial effect that a significant verdict or settlement may have against your company.
If you have questions about an insurance coverage matter, we invite you to reach out to us to learn more about the coverages you currently have in place. We can evaluate your specific needs to determine if you need to take additional steps to ensure that you are protected in the event that an issue arises during your project. Reviewing your coverage now can help limit any financial consequences that may result if you do not have sufficient insurance coverage, contact our team for more details.