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Reviewing Casualty and Liability Insurance Coverage

In the context of financial planning, much attention is properly given to life insurance as well as to health, disability and long term care coverages for the clients we serve. The recent – and ongoing – pandemic and related issues have highlighted the need to understand and perhaps update coverage for business property damage or loss, premises liability, business interruption and event cancellations, as well as residential real and personal property coverages including loss of use.  This applies not only to ourselves and our businesses but to the wide variety of clients we advise.

An unexpected event, such as the destruction of premises or the loss of inventory, equipment and records, can completely upset an otherwise solid financial plan. Businesses and individuals often have some form of insurance concerning potential loss events but most will not have insurance including coverage of losses occasioned by a pandemic or a government mandated lockdown of a business operation. If one is fortunate enough not to have experienced a significant loss thus far this year, then updating and adding such coverage (if available) would seem to be a logical next step. After all, we do not have any clear idea of whether there will be a resurgence of the pandemic, further lockdowns and potential for other disturbances and damage over the course of the year.

When negotiating for expanded coverage, including specific types of events, evaluate the amount and type of coverage you would anticipate needing in various circumstances and be sure you understand the costs of different coverage levels as well as the conditions and requirements for that coverage to apply. You probably won’t want to insure against all possible losses in the worst case analysis since costs likely will be prohibitive and the odds should be somewhat lower for that worst case scenario occurring.  

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