Is a High or Low Contractor Deductible Better for Your Business?
Having the right contractor insurance in Los Angeles in hand is an important part of running a construction business. Construction is a risky business, and the right insurance policies can protect your business from complete financial ruin if the unexpected happens. However, that doesn’t mean you have to overpay for this vital coverage. One of the most reliable ways to save money on your contractor insurance policies is to raise the amount of your deductible to save on your monthly premiums. But what is right for your business?
What is a deductible?
Your insurance deductible is the amount you will pay out of pocket before your insurance benefits kick in. For example, your general liability policy may have a deductible of $500. If you caused $2,500 worth of property damage to a neighbor’s property while working on a project, you would be responsible of covering the first $500 of damage before your insurance policy kicks in to cover the remaining $2,000.
Risks of raising your deductible
Saving money on your insurance premiums sounds like a great idea, and many business owners choose to do this before considering the risks of raising the deductible. The reason that you carry contractor coverage in the first place is to protect your business from an accident or incident that could be financially devastating. In essence, insurance protects your bottom line so that you don’t have to worry about the high cost of an accident. However, if you have a chosen a deductible that is completely unaffordable, then you may struggle to pay in the event of a claim. If you can’t pay your deductible, then your insurance policy isn’t providing you the financial protection your business needs.
When should you increase your insurance deductible?
There are times when it does make sense to raise your deductible amounts and lower your insurance premiums. The best time to increase your deductible is when you already have an emergency fund set aside that will cover your highest deductible if something goes wrong.
The right deductible amount for your business is the amount you have on hand and can comfortably afford to pay if you do need to file a claim.
Interested in finding the right deductible for your contractors insurance? If so, then don’t hesitate to contact the experts at Artisan Insurance Solutions. Our dedicated team is eager to assist you with all your commercial coverage needs today.