Since professional liability insurance can be a considerably large cost to your business, you may not want to keep a large amount of coverage. While you understand the importance of being covered, you also do not want to have more coverage than you need and continue paying a large premium. This may be why you are looking into decreasing your professional liability coverage.
Answers About Decreasing Your Policy
If you have purchased more professional liability insurance online or in person than you now believe you need, you may want to lower the coverage. Sometimes people get a higher amount of coverage because a contract with a client stipulates there be a certain amount of coverage in force. Once the job is over, you may wish to save some money and lower the amount of coverage that you have.
Most insurance companies have no problem with raising or lowering the amount of coverage that you have throughout the policy period. There may be some restrictions,but you will have to look at your policy or speak to the person that is in charge of your current policy. Some companies have more strict policies on changes than others, but you should not run into any problems.
One thing you must think about, however, is the fact that if you file a claim against your insurance, you will only be covered for the amount of coverage that your policy is in force for at the time you file the claim. Even if you had more coverage during the time of your work for the company suing you, you will not be able to use this amount of coverage. This is why many people decide they will keep their amount of coverage higher instead of lowering it.
How Much Is Needed?
When you are trying to figure out whether you want to decrease your policy or keep it the way it is, you should think about how much coverage you need. There are many different factors that you should think about whenever you are trying to figure out the amount of policy that you maintain. Having the right amount of coverage is important, and you need to make sure you take out the time to evaluate your needs.
The first thing you need to think about is how risky your business is. If you are in a very risky job where you have to make big decision or do big projects, you most likely will need more coverage than someone that is dealing with small projects. If you do not get enough coverage, you may find yourself paying out a great deal of money that you might not necessarily have at that time.
One good thing about this coverage is the fact that you can deduct the cost of this insurance from your taxes. This is a business expense and you will be able to write it off. Even though this is true, you want to be able to have premiums that are not too high for you to afford. There is a true balancing act that must be done whenever you are figuring the amount of coverage needed.
Decreasing your professional liability coverage is not difficult. Speaking with the professional that is in charge of your policy is the best way to find out what the restrictions are on this type of change. Usually there will not be any problems and you could just have to explain why you wish to change the amount of your coverage. Once you have spoken with your insurance professional, you will understand what you have to do.