or when taken to litigation.”
What Kinds of Errors Can Cause Insurance Neglect
Neglect in this area occurs when an employer underinsures his or her employees. Regardless of whether it’s unintentional or intentional; it’s neglect. Here are some basic causes:
Lapses in Coverage Cause Insurance Neglect
Lapses in coverage, occur due to…
Loss of insurance
Failure to enroll
Although large businesses can avoid exposing themselves this way, this type of neglect still happen in some cases.
Undisclosed Information can Cause Inadequate Coverage
This type of neglect can also happen when poor communication results in inadequate coverage. If a business reports incorrect figures or information about finances, safety, or employee health, it can end up with insufficient coverage. Failing to disclose potential risks to the insurer can result in uncovered catastrophes.
Inadequate Indemnity Periods
Big business need time to recover from accidents and lawsuits. Insured companies receive payouts during this indemnity period, but negligent businesses may not survive through the recovery, after the shutdown of profitable operations.
Big Businesses Can Become Overconfident
Big businesses often try to reduce expenses with higher deductibles, third party administrators, or insurance omissions. Overconfidence risks critical assets. It’s extremely difficult to accurately predict the potential cost of accidents and liquid asset recovery.
Big Businesses Also Suffer Indirect Costs from Insurance Neglect
Losses to businesses guilty of this type of neglect go beyond problems related to lawsuits, damaged assets, and healthcare expenses. Negligence can also result in …
Loss of licenses
Non-renewal of lease or contract agreements
Depreciated market positioning
Reduced production efforts
State and federal non-compliance
Talk to Your Broker to Avoid Insurance Neglect
To avoid losses caused by insurance neglect in your big business, talk to your insurance broker about your current coverage. Ask if you have any gaps in your own protection and that of your employees.