What could go wrong?'

Every time you pick up the newspaper or turn on the TV, you find stories of things that actually did go wrong.

From traditional disasters (fire, water damage, employee lawsuits) to cyberspace disasters (computer viruses, data base corruption, lawsuits for copyright infringement), the world of business is full of risks.

Insurance can be a cost-effective way to protect your business from a broad range of legal and business risks.  It's good business practice to review your insurance coverage and cost, at least annually.  By getting competitive bids, you ensure that coverages are sufficient and better understand your options.  Responsive service and a great reputation are what distinguish the best insurance people.  If you have a claim, you want a quality insurance person as your agent.

First, check the exclusions.

The most important part of any insurance policy is what's excluded.  So, spare yourself the torture of reading the whole policy and focus on the exclusions in your current policies.

Second, get a competitive quote.

It's amazing what happens when you get one or more competitive quotes. You find out which agents and companies are responsive and what your options are.

Ask for recommendations from your business colleagues or advisers for knowledgeable business insurance people.  Then follow up and request that the insurance agent perform a review of current coverage and make recommendations.

Third, ask yourself some hard questions about your risks.

1. Risk of damage to property?
   
   Is your coverage 'all risk' or just 'named-peril' (i.e., fire, rain)?
   
   Does your policy cover losses from business interruption?  Damage to software and data?
   
   A good policy covers the costs of recovering from the interruption of the business, including lost business.
   
2. Risk of liability for injury or harm?
   
   Commercial liability insurance covers bodily injury and property damage caused to others.
   
   Is your coverage 'all-risk'?  Does your policy require the insurance company to defend you as well as pay any judgment or settlement?
   
   
3. Risk of injury to employees?
   
   Workmen's compensation insurance is mandatory.  It's required by law, and if you don't have it, you are subject to expensive penalties.
   
   It covers employees injured 'in the course of' or 'arising out of' employment.
   
4. Risk of malpractice?
   
   This insurance, (sometimes called 'Errors and Omissions', 'E&O' or malpractice) covers negligent acts, errors or omissions in the performance of professional services.
   
   Typical exclusions include criminal, fraudulent or acts intended to cause harm.
   
   Emerging issues include whether such policies cover professional services for 'failure to meet contractual obligations.'
   
5. Risk to Officers & Directors?
   
   This insurance (sometimes called 'D&O') protects your directors and officers from the costs of a lawsuit for acts on behalf of the company.
   
   With this type of policy, check the exclusions carefully.  An important consideration is whether the coverage pays the legal fees up front in the event of a claim (or only reimburses).
   
6. Other risks?
   
   New types of specialty insurance are becoming available for protection against claims such as copyright infringement and sexual harassment.  Such policies may or may not be a good fit for your business risk.

• Check the exclusions;
• Get competitive quotes; and
• Think carefully about your risks.