The Ins and Outs of Hard to Place Property Insurance
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Whether it's your home or your business, property insurance is a must-have. No matter how careful you are, accidents happen. Damage from a storm or other nasty weather, vandalism, theft, or any of the other things that can and do go wrong are costly to rectify.
Consider too, the possibility of someone having a fall or accident on your property and becoming injured. Now, you must deal with medical expenses, lost wages, and compensation for pain and suffering. There is no question, you need insurance. Some types of property may fall into the category of hard-to-place insurance or require excess coverage.
Reasons You May Be a Hard-to-Place Business
There are specific reasons that your business may require hard to place property insurance. In a business world in which technology and other factors are continually evolving, it may be hard to determine if your business falls into this category. Here are three reasons it might.
1. Your Last Insurance Policy was not Renewed
A nonrenewal won't necessarily make your business hard to place, but these situations may land it there:
Problems with payments - Issues with making payments will make an insurance wary of writing you a policy.
Changes to your operations - Expanding your services or other changes during a policy period could invalidate eligibility and lead to non-renewal.
Misrepresentation of material - Material misrepresentation is failing to disclose information relevant to the policy during the application process.
Any of these situations increase your risk in the eyes of insurers and make your company hard to place.
2. Filing Numerous Claims or Especially Large Ones
Non-renewals frequently happen because of claims. An excessive number of claims filed within a short period of time or claims seeking extreme payouts make your company a higher risk. If someone is injured at your business, they may want to pursue a large claim for a lump sum of cash. This can lead to arguments back and forth, especially if the insurance company offers a structured settlement.
The payee may choose to learn more about structured settlement buyers or refuse to settle at all without a lump sum. This can cause delays and further problems with you trying to obtain insurance in the future. So, it’s best to look at why these claims are happening in the first place. These claims may come about because of inadequate safety standards or poor training. This often leads to a non-renewal and a hard-to-place classification.
3. Your Business Operations Are Dangerous or Unusual
Naturally, if your business involves danger and a high risk of injury, you are more likely to be filing claims and the ones you do will tend to be larger. Your insurer would have to pay out more money and more frequently than with a lower-risk business. This puts you at higher risk and hard to place. Many insurance companies will be hesitant to sell you a policy.
Finding an Insurer
Hard to place does not mean impossible to place. There are insurance companies that specialize in these types of policies. They employ experts to determine your overall risk and write a policy that will provide the coverage you need. Premiums will most likely be higher but if you shop around, you can find a company that can insure you at an affordable rate for your business.
Failing to ensure your property is a big mistake that could bankrupt you and put you into debt. Some businesses may fall into the hard-to-place category. Nevertheless, insurance is available and it is important to take the time to seek out these kinds of policies.