Assessing Your Risks

Your business is up and running. Your business equipment is just what you need. Your grand opening celebration is just around the corner.

But you feel like there’s something you’re forgetting. And there just might be! Have you looked into commercial insurance?

Commercial insurance is not a frill. It’s something that you are going to absolutely need.

Here are the steps you will need to take in order to ensure you get the coverage you and your business need but don’t overpay.

The first thing you will need to do is assess your risks. Insurance underwriters will look at your individual business as well as the industry in general and come up determine the level of risk involved with your business.

Next, they will decide whether or not they will cover your commercial enterprise, and if they will, what amount of premiums are required in order for them to do so.

Each policy has two parts to it.

The first part is the premium, which is Insurance-ese for the amount of money you will provide to the insurance company. Premiums are determined by complicated calculations which are designed to figure risk factors such as where your business is located, proximity to fire and police protection services, the type of building your business is in, and what kind of insurance you are buying.

The second part is the deductible, which is the amount of money you will be required to pay in the event that you make a claim. For example, if you choose a $1,000 deductible, and a claim is made for $5,000, your business pays $1,000 and the insurance company will pay $4,000.

Usually, the higher the deductible you opt to pay, the lower your premium will be.

When deciding whether to choose a high or a low deductible, you first need to look at whether you can afford the deductible. Given that the purpose of insurance is to return you to where you were before the incident which triggers the claim, you will need to choose a balance between what your business can afford without endangering its existence against what your business can afford to pay monthly.

As always, you will do well to discuss your position and choices with a qualified insurance professional.

AIG Commercial Insurance

As of 2007, AIG was the largest commercial insurance underwriter with over 24 million direct premiums written.  On October 30, 2008 the President and CEO of AIG Commercial, John Doyle, said that AIG Commercial was launching some new Products.  He stated that now more than ever clients need us to react to their most pressing risk management issues.  Some of the products and services they released include the following:

  • Lex P-3 Solutions  – Tailored risk management products that address the risks that come with public and private partnerships.   
  • AIG FlexAssure – Offers an expense based health benefit plan generating a lower cost alternative with comprehensive plan provisions.
  • Pandemic Rx  – An endorsement that reimburses businesses for income loss sustained and extra expenses incurred by acute care medical facilities during an influenza pandemic event.
  • Truck Broker Liability Insurance – This liability policy addresses liability risks of truck brokers who bring together shippers needing to transport goods and authorized motor carriers.

AIG Commercial Insurance should be in a good place with their Pandemic RX policy, which should be available for swine flu insurance disasters.  More to come……..