Insurance: is your business covered?

• Author: Burnette, Kristen
• Position: Special Advertising Section - Knauff Insurance Inc. - Advertisement

Although insurance is one of the most important investments a business will make, it sometimes receives less attention than an order of office supplies. The inherent complexities, legalities and complicated jargon associated with business insurance make the idea of delving into it a daunting task. However, it is a necessity--one that companies can't afford to ignore.

"Business owners and executives cannot view their insurance or risk management as a commodity purchase, especially in today's hard market," says Steven Santee, general manager of Knauff Insurance Inc. Santee advises companies to work closely with their agent or broker to create the right protection and buy coverage that best fits their needs. "You have to identify areas of vulnerability and be sure you're spending money on the protection you really need."

Charlotte-based Knauff provides full-service business insurance plans to help clients spend their money wisely. Operating since 1969, it is one of the largest independent brokerages in the Southeast.

Beyond purchasing the right protection, it's also important for companies to improve safety programs and adopt effective risk-management philosophies. "Creating the appropriate culture internally makes the company more attractive in the insurance marketplace, and that means better programs at a better cost," Santee says.

With today's rising premiums, companies need to look closer that ever at their coverage. Among way to fight rate hikes are increasing deductibles on some policies or shifting to self-insurance. The money saved on a premium can then be used to purchase protection in other areas, such as employment-practices liability insurance, which covers discrimination, harassment, wrongful-termination or similar claims.

The rationale is to shift insurance investments to areas where losses would be more detrimental to the organization. For example, it's better to absorb a $1,000 deductible on a building or automobile claim than to be hit with a $300,000 wrongful-termination suit--and be completely unprotected. "This is all new stuff that wasn't around 10 or 20 years ago," Santee says. "It certainly isn't just property, automobile or worker's compensation coverage that most companies are used to, but it's absolutely mandatory to be informed and covered appropriately."

Such policy considerations reflect dramatic events that have changed the industry over the past couple of years. A number of factors influenced today's hard market...