First, that question is way too broad. A business may have many types of insurance with many types of coverage and deductibles. Let’s narrow down the question as it relates to specific business insurance.

As a general rule, the insurance carrier who issued the policy will cover the loss up to the specific dollar limit less any commercial insurance deductible. This will save your company in some cases from a cash outlay which could disable or even close your business. The portion not covered by the deductible is what you are required to pay.

It makes sense to review each policy and determine what deductible makes sense today versus when the policy was issued. For instance, say a covered claim is $10,000 and your deductible is $2,500, then the insurance company pays $7,500 and your business is required to pay the remaining $2500. Whether the claim is $2,000 or $40,000, subject to coverage limits (the maximum a policy will pay) your deductible remains at $2,500. So, in the case of the $2,000, it is paid 100% by the business because the deductible was not met.

Commercial Insurance Deductibles can usually be negotiated or have a tier system to choose from. When first starting out, it’s quite possible your business could only afford a minimal deductible. Now, it’s possible that in fact you could cover substantially more for a deductible. Talk with your licensed insurance professional to determine what makes sense. It’s also a good time to review coverage limits as well. If your business has grown, it’s possible your coverage needs to as well.

Property insurance deductibles can also be figured by an individual claim basis or an aggregate basis. Typically, small companies with no or few claims will find the individual claim basis attractive. However, if your company or industry has a large number of claims annually, it may be prudent to look at the aggregate basis.

You need to review the different alternatives for your clients before presenting them with options.

The best possible way to reduce costs is work with your carrier or wholesaler like GM Underwriters. Review each business insurance policy and together determine what commercial insurance deductibles make sense and offer the protection needed in the event of an incident.

Contact us at gm@gmunderwriters.com or call us at 800-567-3010 and speak to our commercial insurance underwriters.