Many business owners purchase insurance and hope that they never have to use it. They walk away from the transaction not fully understanding their coverage – or their 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 only carry $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 the price of coverage 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.
For the right commercial property insurance policy, contact our expert team at Abatelli Group, Inc. today. We serve Whitestone, Flushing, Bayside, Little Neck, and surrounding cities of New York with reliable coverage!