Commercial insurance plays a vital role in safeguarding businesses against unforeseen risks and liabilities. However, misinformation and misconceptions often cloud the understanding of this crucial aspect of risk management. This blog will aim to dispel six common commercial insurance myths, shedding light on the facts to help businesses make informed decisions and protect their interests.
Let’s separate fact from fiction and empower business owners with the knowledge they need to navigate the complex world of commercial insurance.
The proposal with the lowest premium is best (Price Vs. Cost)
Several factors determine the premium of an insurance policy. Some factors include coverage, risk profile, contract terms, exposures, and the company’s loss history. Value buyers will evaluate the insurance depending on the volume of risk coverage and the premium amount charged. On the other hand, price buyers will purchase the insurance with the lowest premium without considering the coverage being offered.
- I should shop for my insurance every year
Insurance carriers are flagging such customers as they know these are short-term customers and will leave the company the following year. Insurance carriers look for value buyers instead of price purchasers. The insurance company has to invest time in pricing and underwriting your account. Customers leaving policies frequently leave a black spot in the marketplace and raise questions about their loyalty toward a company, leading to a premium price increase.
- I should have multiple brokers, or at least shop my insurance to multiple brokers because they will keep each other competitive
Gone are the days when this concept worked in the insurance industry. Instead of working with two or more brokers, working with a single, reliable, and trustworthy broker is recommended for managing most of your policies. Choose your broker wisely, considering the experience, background, and additional capabilities and resources that can help lower your insurance costs.
- People get hurt at work; there’s nothing I can do
A lot of science and logic goes into debunking this commercial insurance myth. It is impossible to eliminate the chances of injuries completely anywhere. However, it is possible to significantly affect the claim’s severity, number, and impact. In many companies, workers’ compensation costs are often ignored. However, some organizations are highly competitive and cost-efficient, with employee injury/workers’ compensation cost containment programs.
- All I can do is wait four years for those claims to disappear
This myth doesn’t stand ground anymore as there is a lot that you can do. Workers’ compensation comes with many opportunities; you just need to look at the right place and have the correct partners. See that your audits and experience ratings are correct.
- I collect certificates of insurance from all my subs, we’re good!
Certificates of Insurance do not provide coverage. Insurance policies do that. Read a subcontractor’s insurance policy and see if there is any coverage. Certificates of Insurance only create an obligation, there is no role of finance in it.
Trust Family Financial Insurance Group for Reliable Commercial Insurance Solutions
The above-mentioned commercial insurance myths are just that – misconceptions. Customers should have proper, unbiased, and transparent information about commercial insurance policies. If you are looking for reliable commercial insurance, there is no better alternative than Family Financial Insurance Group. To protect your business from financial damages, consider consulting our professionals at 972-270-1488 for details.