Q&A: business insurance.

Author:Rajt, Michael A.

The Sept. 11,2001, terrorist attacks caused business insurance premiums to soar.

Q: So why are my rates going up?

A: Basic supply and demand. The September 11 disaster was the world's largest property and business interruption claim ever. It also was the largest single liability claim ever. The insurance companies have estimated that their losses as the result of the terrorist attacks will exceed $60 billion.

Q: As a small business owner, what can I expect?

A: Additional exclusions, including terror exclusions, are being added to many policies, and premiums are increasing dramatically. For example, general liability insurance increases of 20 percent or more are not uncommon. Property insurance premiums have increased between 20 and 50 percent. Workers' compensation premiums have increased 20 to 30 percent and umbrella liability premiums are often doubling or tripling.

Q: How do I protect myself?

A: Request your claims history (or "loss runs") from your insurance agent and carefully review the data. Are reserves still posted for workers' compensation claims where the employee is back to work? Advise your agent and the carrier to get those reserves removed. Is there a high reserve as a result of an apparently minor incident? Ask your agent and the adjuster why that reserve is there. Are reserves still posted on liability claims that you believe have been settled? Bring that information to the attention of the agent and the carrier.

Q: Should I consider switching insurers?

A: If you decide to obtain competitive...

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