The Dovetail: The Insurance Promise

It is often said that when you purchase insurance, you are buying a promise. Put succinctly, in exchange for a premium, you are receiving a promise that if you have a claim, you will be made whole to the fullest extent possible. The insurance promise can only cover that which has been defined in the policy. The particulars of this promise are detailed in the insurance contract (policy) which typically specifies such things as the risk covered, the limits of the policy, and the policy term.

Obviously there needs to be a balance, or value assessment completed, between the premium charged and the coverage(s) and services afforded. It can be difficult to find that balance in today’s reality of frequent natural disasters, nuclear liability verdicts, emerging cyber threats, and inflation, to name a few, along with the corresponding rising insurance premiums and litigation costs. These different factors influence both the coverages you would need as well as the costs associated with them. In this environment, it is important to understand that these cannot be looked at in opposition – cost or coverage. The insurance promise only works on what is covered. Instead, you need to be relentless in understanding your risks, determining your tolerances, and working with your broker to place the appropriate coverages at the appropriate levels. That way, if you have a loss, you don’t have to question your level of protection – you can get back in business quicker and you’re made whole. We encourage you to meet with your insurance broker to perform a thorough risk assessment of your operations in order to structure the appropriate level of protection that meets your individual needs.

The insurance promise works best when all parties are well informed and understand the value assessment. Please feel free to reach out to your PLM representative should you have any questions regarding your insurance program.