What Does it Mean to be an Underinsured Business?
Commercial insurance prevents financial losses and keeps your business running when unexpected events occur. Being an underinsured business means your organization does not have the proper coverage to protect its assets and operations.
Businesses end up underinsured for a variety of reasons. Some company owners are unable or unwilling to pay insurance costs, and some simply don’t understand what coverage they need. Consulting an experienced commercial insurance professional is the best way to ensure your business avoids risks associated with being underinsured.
5 Risks of Being Underinsured
Business owners should be aware of the following five risks associated with being underinsured:
- Financial: Recovering from natural disasters or other significant property damage can lead to large financial losses if your business is underinsured.
- Loss of Productivity: An unexpected event could damage a company’s property leading to a loss of productivity. If your insurance coverage is lacking, your business will be responsible for the costs associated with halted operations.
- Customer Relationships: Businesses that compromise customer information or are unable to continue operations due to being underinsured threaten good customer relationships.
- Penalties & Fines: There are specific business insurance requirements at federal, state, and local levels. If your business is not carrying proper commercial insurance according to the requirements, you could be at risk for various penalties and fines.
- Legal: Costly legal battles are a significant risk for an underinsured business. An employee or customer filing a lawsuit could financially drain a company lacking proper insurance.
Looking for an Insurance Agent?
Please contact Steve Longenecker (303-808-9351, x2) at Mountain Insurance: Longmont to discuss your business insurance coverage options in Longmont, CO, and our neighboring communities.
We give out $25 gift cards for referrals that become our insurance clients.
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