Every business owner knows they need insurance coverage. They take out insurance and hope for the best. Yet, many go away from securing their coverage without knowing the basics about their insurance coverage limits. In order to keep costs reasonable, your insurance company will set insurance limits of liability. Liability insurance covers the costs of damages you’re responsible for causing. It’s in your best interest to understand the basics about the liability limits so you know where your business stands.
Insurance rates are determined by assessing risk or the likelihood of a claim being filed, as well as the maximum amount that may be paid if such a claim were to be filed. In essence, if it’s likely that the insurer will pay out a significant settlement in the future, the premiums will be higher.
If a claim is so extensive that it maxes out your policy, your business can be held responsible for the difference. For example, if you are responsible for $2 million in damages but carry only $1 million in insurance, you may have to pay the remaining $1 million out of pocket.
Generally, carrying more coverage with higher liability limits helps to protect your business. However, you will want to ensure that this price of cover still fits within your budget. If you operate in high-risk environments or industries, you are usually better suited to higher minimum liability insurance limits.
Ready to get started on your reliable business insurance? Contact Bell Black Insurance. Serving Idaho Falls, Island Park, Driggs, Victor, Swan Valley, Ashton, and the neighboring communities in Idaho, as well as Jackson and Star Valley in Wyoming; we are ready to get you covered today.