Deductibles are a relatively simple concept. Basically, it’s what we pay before the insurance company will pay out on a claim.
On a homeowners policy or an auto policy, these are easy to see how much we have to pay before the insurance company will pay.
A scenario not commonly thought of though is: what if multiple deductibles apply to the same claim? Many policies contain multiple insuring agreements with their own separate deductibles. In order to receive the full pay out, all the deductibles have to be paid.
In some situations a company would have to pay $250,000 to get the full payout when they may have thought it would only be $50,000.
This is common in Cyber Liability Policies, Directors & Officers Policies, Crime Policies, Employment Practices Policies, Professional Liability Policies, Etc. This is all in addition to the cost of your insurance policy.
Do you know how much you have to pay? Can your business absorb the cost of a claim even if it is insured?
Questions? Contact Us!