Understanding Deductibles in Commercial Insurance

Many insurance policies have deductibles, since they’re a valuable aspect of a company’s expenses. Before selecting coverage that includes a deductible, you must understand how it applies to your business, what costs you’re responsible for, and other essential details. Keep reading to learn more about commercial insurance coverage that comes with a deductible, its cost, and how it could keep your business services, products, or investments affordable to you and the provider.

Commercial Deductible Types

The amount of money you pay for a covered expense before your business insurance provider picks up payment will depend on your policy agreements and the form of your commercial deductible. Before you sign documents or agree to coverage, your provider will explain the fixed amount percentages and other options so there’s no confusion or misleading factors. The most common commercial deductibles are flat, percentage, and straight deductibles.

With a straight deductible, the amount is generally subtracted from each separate loss. In contrast, a flat deductible will apply the agreed-upon fixed traditional amount for every loss, regardless of the claim amount. Other commercial deductible types are buyback, aggregate, basket, waiting period, and per-loss deductibles.

Coverage Details

As a business owner, expect the deductible to cover your commercial property, including vehicles your company owns and operates. The costs will also apply to professional liability errors your establishment encounters.

When applied, a commercial insurance deductible is processed separately. This is due to uncommon occurrences and losses your business could experience. For instance, if your company encounters a weather issue or theft, you must apply separate deductibles for each claim—the storm and the burglary.

Costs

Many managers and companies dislike commercial insurance that comes with a deductible due to the fear of higher fees. Although the deductible generally comes with increased costs, it could yield a lower premium for your business.

Many products and services a business offers come with higher risk than others. In this case, your insurance provider could insure some of those products or operations but not others. However, a higher deductible could allow your insurance provider to extend coverage to those aspects that are otherwise considered uninsurable.

Therefore, before assuming the deductible is too high and not beneficial for your company, it would be best to speak with your provider to learn how it could benefit your business in the long run.

Advantages

A commercial deductible will benefit both the insurer and the business. It can lead to more affordable insurance, increased safety and quality of services and products, decreased risks of unethical behavior, and lower premium costs. However, the aim is to learn more about the advantages so you can reduce the risk of choosing a large deductible and putting your financial future in jeopardy.

Speaking with a representative from a trusted insurance company can help you learn more about commercial deductibles and select the policy that suits your business, employees, and clients. 

Business owners need to make sure they protect their companies, customers, and employees by purchasing the right insurance coverage. For affordable, reliable commercial insurance as well as homeowners, renters, motorcycle, and auto insurance, Chula Vista residents should call on the trustworthy professionals at Altra Insurance Services. Reach out to us today to learn how we can satisfy all your insurance needs.