If your business carries business interruption insurance, you’re responsible for determining and reporting your values at risk to your insurance company. Many businesses come up with this number one time in order to place business interruption coverage, and then don’t think about their values at risk number again–sometimes for years.
Businesses that carry business interruption insurance should re-evaluate the values at risk number yearly or whenever the business experiences a significant change. The business interruption values at risk number should reflect the anticipated business interruption value at risk in the coming year–the year to which the policy will apply.
Businesses can save money on insurance premiums
Because of the tough economy these past couple of years, many businesses have suffered from a financial standpoint. Businesses that have felt an economic impact due to the poor economy should review their values at risk to ensure that they are not over-insured, keeping in mind the anticipated outlook for their business in the coming year.
Businesses in this situation could be over-paying for insurance premiums they will never recover–and can potentially save money on insurance premiums. The best course of action is to re-evaluate your business interruption values at risk and then talk to your broker.
On the other hand, if your business is seeing the light at the end of the ‘economic crisis’ tunnel and actually experiencing some growth–huzzah! You still need to re-evaluate your business interruption values at risk because you could run into trouble if your policy contains a coinsurance clause. I’ll discuss that scenario in my next post.
I, for one, was happy to slam the door on 2009 and am ready to do some business in 2010. So if you’re a risk manager, corporate officer, or business owner, we can help you understand your values at risk so that you can make fully-informed business decisions. We’ve helped businesses, both large and small, with similar concerns about their values at risk, achieve the results they need to move forward with confidence:
“The end result was ideal not only for our insurance renewal process, but also provides us with a useful tool for understanding and measuring our BI exposures going forward,” John P. Sullivan, Vice President and Treasurer, JDSUniphase.
I wish everyone out there good health, happiness, and the very best in business this year.
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We’d love to help you. Please get in touch.
