What I do know is that it is hard to admit that you don’t know what you don’t know. Recently I gave a presentation at the 2015 Business Law & Corporate Counsel Symposium. The presentation was about business insurance and managing risk for businesses, the real message I wanted to leave my audience was that CEO’s, CFO’s and their advisors, like attorneys need to “know what they don’t know” and seek out an impartial expert to look out for their best interests.
How Well Do You Understand Your Business Insurance?
Over the years – I have heard so many people say “I didn’t know that”, “No one ever explained that to me” or “I really didn’t understand that”. It is all too common that people don’t fully understand the insurance products and services they have been sold.
So much focus is placed on the premium (cost of the policy) that the recovery aspect is overlooked and therefore not understood. When purchasing an insurance product you should understand how you will be indemnified should a loss occur (paid for your loss and returned to the condition you were in before the loss, no worse no better).
The exposures businesses face in the world are vast, complicated and dynamic. Insurance is only one of the avenues to address and transfer risk, but that too is complex and dynamic. There are many moving parts to coordinate to ensure a company is properly protected.
Here is a startling statistic: 75% of businesses that suffer a catastrophic loss go out of business within two years of their loss. I can promise that the reality and root cause of most companies’ problems who suffer these catastrophic events is that:
- They didn’t “know what they didn’t know” about insurance and their coverage, and
- They were SOLD insurance rather than purchased it – and there is a BIG difference
A number of attorneys at the symposium voiced their agreement and shared experiences regarding the misunderstanding of an insurance contract.. They valued the insight an impartial consultant can provide. That says a lot right there.
Be in the know! Seek out assistance to understand what you don’t know – it will pay off in the long run.