Each year Bill Dougherty teaches business owners how to Avoid the 10 Critical Business Insurance Mistakes.  He motivates them to “take charge of their insurance program” to Reduce Costs and Maximize Value.

Chapter 9: Failing to Tune up Your Insurance Program

This is the 9th installment of “How to Avoid the 10 Critical Business Insurance Mistakes”.

Each month we provide ideas that will help you control insurance costs and better protect your business.

To date we have provided you with the first eight steps of the program:

  •  Partnering with the “Right” agency
  • Paying attention to the Carrier’s Financial Performance
  • Reviewing Coverages with your Agent
  • Having a Claims Management Plan
  • Working with only One Agent
  • Implementing a Risk Control/Loss Prevention Plan
  • Managing your Workers Compensation Program
  • Inadequate Umbrella Limits

This month we focus on the critical mistake of “Failing to Tune up Your Insurance Program”.

As we visit new clients there always seems to be a list of several critical coverages that are missing.  These coverage gaps create the potential for serious financial loss should a loss occur:

Employment Practices Liability Insurance (EPLI)

Originally developed to protect businesses from sexual harassment and discrimination lawsuits, today the coverage is more often triggered by “wrongful termination” or “failure to hire”.

You may never have a judgment against you but you probably will need to defend yourself at some point in the lifetime of your business.

Defense costs for this type of lawsuit are prohibitive.  EPLI also covers these costs.

If you have an employee… you need Employment Practices Liability Insurance.

Fiduciary Liability

Do you sponsor a 401k or pension plan?  Did you know that your employees can bring suit against you for “the imprudent investment of their funds”?

Fiduciary Liability insurance is the best vehicle to protect yourself against legal liabilities arising from your role as a fiduciary.

Directors and Officers Liability Program

Did you know that you and your officers may be sued for negligent acts or omissions while serving on a board of directors or as an officer?

In effect, “D&O” functions as a management errors and omissions policy covering claims resulting from management decisions that have adverse financial consequences.

Pollution Liability

One of the most significant and potentially damaging omissions in a contractor’s insurance program!

General Liability policies exclude pollution liability.  Although some carriers may provide a reduced limit of liability at job sites only, this simply is not sufficient coverage to protect your business from a potentially devastating claim.  The cost of simply defending your business may financially impact your company.

Ask your agent about a “full pollution practice policy” to protect your business.

Once again, this is an executive summary of chapter nine of our seminars.

If you would like any additional information just give me a call.

Next month we complete our “10 Critical Business Insurance Mistakes” with our final chapter “Going to Market Every Year.”

Winning is a habit,

Bill Dougherty, EVP
True & Associates