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A severed finger, a lawsuit and the right insurance policy

Missing_finger Panic is never a good business strategy. Just ask any savvy business owner.

The same theory can apply to insurance. Insurance is there to protect you and your assets in the event of an unfortunate incident. Let’s face it, with the way the economy is – a tornado, a flood, a natural disaster or a lawsuit could crumple any size business. However, there is no need to panic if you have the right insurance in place.

There was an article in the Des Moines Register this week about a local magician/actor/hand model who is suing Martha Stewart. Why? It appears that he had an unfortunate incident with a chair made by her company that was recalled back in 1997. This incident is alleged to have caused him significant injury. The article indicates that he has named Martha Stewart’s company and Kmart in the lawsuit.

If Martha has the right insurance coverage in place, she will not need to panic because her insurance company will provide a defense for her to help protect her assets. The same applies to Kmart.

That is the whole premise of insurance: to help you protect your assets.

  • If you are sued, it can provide you with defense costs.
  • If you are unable to occupy your space, it can help cover costs until you’re back in business.
  • If you lose all of your merchandise and can’t operate your business, it can cover you for lost income.

There are many other benefits as well.

The intent of insurance is to restore you to your pre-loss condition. However, the key element is that you need to have the right coverage in place in order to reap any benefits.

This is where having good communication with your agent is so important. So don’t hold back information. Sometimes business owners think that if they tell their insurance agent too much then it is going to cost them more.

Now I am not going to say that doesn’t happen, but most of the time it is a misconception. When information is withheld, then the client can be put into the wrong product and that can cause everyone to panic should a loss occur.

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