Underinsurance: (noun) insufficient insurance cover that leaves the policyholder responsible for a large percentage of a loss or expense.
The dictionary definition of underinsurance may seem simple, but the scenario that arises can be anything but. When your small-to-medium business is underinsured, you’re at risk of a situation where your insurance payout isn’t enough to cover the costs you face. That can lead to some serious issues down the track – issues that can threaten your cashflow and even solvency.
The good news is knowledge is power. Here are some signs your business may be underinsured – and most importantly, what you can do about it.