Running a small business in Kansas City comes with its fair share of challenges, one of which is making sure you have adequate insurance coverage. An underinsured claim can be devastating, leaving your business exposed to financial losses that could have been avoided.
At the Saxton Law Firm, our Missouri small business attorneys provide you the advice and guidance you need to mitigate business risks, including those from underinsured claims. Speak to us about a consultation on a wide range of small business related issues.
Understand Your Business Risks
The first step in preventing underinsured claims is to thoroughly understand the specific risks your business faces. Different industries have varying levels of risk, and you need to identify the unique vulnerabilities associated with your operations. For example:
- Retail Stores: Risks include theft, property damage, and liability from customer injuries.
- Restaurants: Foodborne illnesses, kitchen accidents, and equipment breakdowns are common risks.
- Professional Services: Errors and omissions, data breaches, and client dissatisfaction can pose significant threats.
By recognizing these risks, you can tailor your insurance coverage to address them effectively.
Conduct Regular Insurance Reviews
It is also essential to regularly review your insurance policies to ensure they still meet your business’s needs. As your business grows and evolves, your coverage requirements may change. Conducting annual insurance reviews with a qualified insurance agent can help you identify any gaps in coverage and make necessary adjustments.
Adequate Liability Coverage
Liability claims can be one of the most costly types of claims a business can face. Ensure you have adequate liability coverage to protect against lawsuits and claims arising from injuries, property damage, or other incidents involving third parties. Consider the following types of liability coverage:
- General Liability Insurance: Covers bodily injury, property damage, and advertising injury claims.
- Professional Liability Insurance: Also known as errors and omissions insurance, it protects against claims of negligence or mistakes in professional services.
- Product Liability Insurance: For businesses that manufacture or sell products, this coverage protects against claims related to product defects or malfunctions.
Property Insurance
Property insurance is vital for protecting your business’s physical assets, such as buildings, equipment, and inventory. Ensure that your policy covers the full replacement value of your assets rather than their depreciated value. Additionally, consider adding business interruption insurance to cover lost income and operating expenses if your business is temporarily shut down due to a covered event.
Workers’ Compensation Insurance
In Kansas City, workers’ compensation insurance is mandatory for most businesses with employees. This coverage provides benefits to employees who are injured or become ill as a result of their job. Ensuring you have adequate workers’ compensation coverage not only complies with state law but also protects your business from potential lawsuits related to workplace injuries.
Cyber Liability Insurance
With the increasing reliance on digital technologies, cyber liability insurance has become essential for many businesses. This coverage protects against losses resulting from data breaches, cyberattacks, and other cyber incidents. It can cover costs related to data recovery, legal fees, and notification expenses, helping you mitigate the financial impact of a cyber event.
Review Policy Limits and Deductibles
When selecting insurance policies, carefully review the policy limits and deductibles. Policy limits determine the maximum amount the insurer will pay for a claim, while deductibles are the out-of-pocket expenses you must pay before coverage kicks in. Ensure that your policy limits are sufficient to cover potential claims and that your deductibles are affordable for your business.
READ MORE: What to Do if Your Business Insurance Claim is Denied or Underpaid
At Saxton Law Firm, our Missouri small business lawyers can help you navigate underinsured insurance claims and prevent them. The right insurance and the best legal advice can help protect your small business. Contact Saxton Law Firm for a FREE case review!