Insurance is Like buying…

Have you ever thought that buying insurance is like buying: a fly swatter? spot remover? deodorant? cold medication? Antacid?

Maybe there are some similarities:

• -It’s no fun to buy
• -When you need it, you better have it
• -There is always the question, how much is enough?

Let me start by saying that as an insurance agent, I am proud to sell insurance. As a past business owner and current consumer, I see the value of having adequate insurance and do feel this is a noble career- so enough with the jokes!

Insurance may not be fun to buy, but that does not mean you shouldn’t understand what it is you are purchasing. Find an agent who can walk you through the compliance part of insurance and enter into the world of active risk management. A knowledgeable agent will first determine what risks your business faces and then work with you to discuss your options of dealing with those risks. Insurance is one vehicle which transfers risk to an insurance carrier. Other options should be discussed to implement separately or in conjunction with insurance products.

Any banker will tell you that the right time to apply for a line of credit is when you don’t need it. The same applies to insurance. When a need for insurance happens, it must be in place. The news of the horrific earthquake and tsunami in Japan is very fresh in our minds. The Independent Insurance Agents and Brokers of Washington reports that less than 50% of commercial properties in Japan had earthquake insurance. Has your business discussed the “optional” coverage available?

As a business owner, many buy insurance to satisfy a requirement. Is this level of coverage sufficient? In current economic times, both commercial and residential properties have seen a drop in value. Does this translate into needing less insurance on that property? From an insurance standpoint, the important measure of property value is the replacement cost, not the market value or assessed value. Do these economic times create greater levels of liability exposure than we have seen in the past? From laid off workers to potential cyber liability- this is a great point of discussion.

So reach out to your trusted insurance advisor and realize that even if insurance may not be very fun to consider, it is an indispensible tool when you need it.

Tony Johnson is an Accredited Advisor in Insurance and can be reached at Davidson Insurance, 360-514-9550 or Tony [at] Davidsoninsurance [dot] com