Commercial Insurance Policies: Key Provisions & Deductibles

When you are shopping for a commercial insurance policy it is important that you carefully read the binder before agreeing to the policy and that you understand the provisions within your policy.

Deductibles

Often, when shopping for commercial insurance, businesses try to save money by reducing the monthly or quarterly cost of the insurance premium.  However, you should realize that a lot of that savings may come from increasing your deductible -- the amount of money you have to pay out of pocket before the insurance coverage begins. Is it worth saving a few dollars a month if your deductible increases from $250 to $2000?

Risk Management

Your premium is based in part on the level of risk the insurance company assigns your business. You should understand your risk and even conduct a risk assessment before shopping for insurance so that you can compare the insurance company's evaluation of your risk with your own. Understanding risk and having a risk mitigation plan in place can also save you money on your policy.

Exclusions

One of the biggest ways insurance companies save money is by excluding coverage for certain events, situations, or items. Be sure you know what is excluded from your policy and why.