That Will NEVER Happen to My Company!

I can't count how many times I've sat down with C.E.O.'s, V.P.'s and C.F.O.'s for them to tell me that a specific claim instance would never happen to them.  Well, news flash...it has happened to some of my clients!  And no matter how many controls, safety measures and positive company cultures you may boast, it can happen to your company.   Recently we stressed the importance to a company for crime coverage.  The owner was adamant that this would never happen to his company.  He denied the coverage and he is now dealing with over a $350,000 financial loss due to an employee stealing from the company.


As an insurance advisor, it is my job to tell you about all the things that can happen and prepare the business for financial hardship or simple inconvenience in wake of a claim.  Are some instances scary and turn into disasters?  Yes.  Is that every claim?  No.  You definitely don't have to over-insure in every instance.  I am not a fan of spending money carelessly.  But don't go the ignorant route and assume that claims you hear about on television or in the news could never happen to your company.


When I am developing an insurance program for my insured's, one of my client's primary concerns is the deductible or self insured retention amount.  As this should be a concern, some of the less experienced clients tend to associate the deductible, whether high or low, with the premium amount.  The higher the deductible the lower the premium dips.  The lower the deductible, the higher the premium rises.

As a rule of thumb, is this correct?  For the most part yes.  However, what does it mean to take on a bigger deductible vs. a smaller one?  Some business owners only care about the bottom line and never think that anything will ever happen to their business.  These are the businesses that are O.K. with taking a bigger deductible or S.I.R. risk, even if it isn't the smartest thing to do on the books.

My advice is to seriously evaluate financially what your company can afford in case of a claim where a deductible or S.I.R. needs to be paid.  Whether that be a $2,500 deductible or a $50,000 S.I.R., pay attention to these key insurance factors and not just the bottom line.  Is this deductible per claim or per occurrence?  A per claim deductible could mean you are paying out multiple deductibles for one particular event or loss which could add up quickly.

Have more questions or just want a second opinion?  Feel free to email me for aninsurance evaluation for your own business at joileneh@dbinsurance.com.