Transferring Risk

Financial Risk comes in many forms. But lawsuits, accidents and catastrophes happen every day and can take their toll on your business or your personal assets.

Transferring Risk is having someone else pay your losses.  We transfer risk in several ways, but the most common way is through a contract called an Insurance Policy.

The insurance contract basically says, “If X happens, then we will pay you $$ amount of money”.

Example: If there is a fire, the insurance company can pay for your building, personal property, and a place for you to stay while repairs are being made, if you have the right coverage.

In theory, it’s simple, but today’s insurance contracts are much more complicated.   You need to be aware of limits, exclusions, clauses, endorsements, and your duty as the insured. 

Insurance contracts do not cover everything, but they were never designed to.  If they did cover everything then no one could afford them. 

The best insurance contract is the one that is tailored to fit your needs. Not everyone has the same amount of assets or exposure. 

Example: A farmer needs different coverage than someone without farmland or animals. 

By tailoring your policy, you will pay only for the coverage you need.

Keeping the price of insurance affordable is important, but more important is making sure you have the right coverage.  Coverages can be endorsed or added to policies to make them better.  Coverages can also be matched to your other insurance policies to fill gaps while adding more discounts.

What about Liability and Lawyer fees?  Insurance policies include defense costs in the liability section of the policy.  Also, medical can be added or increased on policies to help keep small injuries from turning into large lawsuits.

Your Insurance Advisor is there to advise you on the ways you can tailor your policy. Your agent works with these contracts regularly and knows where coverages can be enhanced to fit your needs.  

***It is important to meet with your Insurance Advisor at least once a year.  Things change and you need to keep your coverage current.