Do you have adequate coverage for all your company vehicles and equipment? Here are the top 5 mistakes to avoid:
- Not listing all your equipment. Companies often forget to update their coverage when they buy or retire a vehicle or piece of equipment. Your broker should be your first call after signing on the dotted line.
- Not valuing your equipment appropriately. Be sure to consider your replacement cost needs. You can lower your rate by insuring a piece of equipment at its depreciated value, but you may have a hard time replacing it for that amount. Consider opting for a specific cash or replacement value. Another mistake in this area is failing to value or list special features, such as a piece of welding equipment attached to a truck.
- Using a schedule rather than blanket coverage. A schedule requires you to list each piece of equipment and keep your list up to date. That can cost less, but it can also be challenging, depending on the number of items you’re covering and how quickly your inventory changes. A blanket may be more appropriate and easier to maintain.
- Not using the correct limits for replacement. For example, one business we work with has a specialized piece of equipment so rare that there are only a handful in the Midwest. It will be harder to replace, so the replacement cost will be higher.
- Failing to weigh your risk tolerance. Don’t just accept the first deal you’re offered – or the one you’ve had forever. You could lower your rates by accepting higher deductibles.
Managing your auto and equipment coverage proactively can save you money – now and in the case of a future loss. It’s one of many topics you might want to address with your broker during regular coverage reviews.
By Chris Miller, Commercial Risk Advisor, The Miller Group