Common Pitfalls to Avoid When Purchasing Fidelity and Crime Insurance in Florida
Fidelity bonds and crime insurance can cover a wide range of business losses resulting from acts of fraud, theft, or misuse. For example, fidelity bonds might pay for embezzlement at the hands of a member of the accounting team. While these insurance policies can be an important tool for any business owner, there are some considerations that are vital to take into account before purchasing a policy.
At Ver Ploeg & Marino, we can help you find a policy that avoids the common pitfalls of buying fidelity or crime insurance in Florida. Our Miami insurance law firm is dedicated to helping you review your options and make the decision that suits you best. Contact us right away to learn more.
Pitfall #1: Failing to Read the Policy
The specific language of your insurance policy is vital to understand. The way these policies work can vary significantly, even when it comes to two policies offered by the same company. If you are unfamiliar with the language of the agreement, you may be in for an unpleasant surprise when it comes time to file a claim.
Arguably the most important consideration is the way the policy covers a particular loss. Some policies have very broad language, agreeing to pay for any loss so long as it relates to some kind of criminal activity or fraud. Other agreements might include exclusions that limit when a claim is available.
This is only one of the situations where the finer details of an insurance policy matter. In order to find the right coverage and enjoy the confidence of knowing you’ve made the best possible decision, you could benefit from discussing your options with our Miami insurance law attorneys.
Pitfall #2: Not Updating Your Policy
Purchasing insurance coverage is not a single transaction that is completed the moment the policy goes into effect. Each year, you have the opportunity to review your policies. Doing so can ensure your needs continue to be met.
The reality is that many businesses grow—some exponentially. If you purchased a fidelity or crime policy several years ago, it might have been perfect to cover all of your needs at the time. That might not be the case any longer. While it is a good idea to review your coverage periodically, certain events are a great time to determine if you have enough coverage. They include:
- Experiencing large revenue growth
- Made an unusually large number of new hires
- Fired employees in positions of trust
- Moved your business to a new location
Having the right coverage is crucial moving forward.
Pitfall #3: Not Purchasing Enough Coverage
One important decision when purchasing fidelity or crime insurance policies is finding the right amount of coverage. You have options when it comes to deciding on the maximum payout your policy should carry. If your policy limits are too low, you might be paying for losses caused by theft or employee misconduct on your own.
Of course, there is more to this decision beyond determining how much coverage you want. You also must ultimately decide how much you can afford. The higher the potential payouts, the more you are expected to pay each month in premiums.
Thankfully, you never have to make this calculation on your own. When you work with a Miami insurance claim lawyer, we can help you review your needs and find the policy that fits your budget.
Pitfall #4: Failing to Cover Those Closest To You
Every business is different. Some companies rely entirely on full-time employees who have employment contracts and benefits. Other companies lean heavily into the use of freelancers and other third-party contractors who are not technically employed by the business.
When it comes to purchasing fidelity or crime insurance coverage, these details matter. This is because in general, fidelity bonds will only pay out benefits in cases where the dishonest conduct was perpetrated by an employee of the business. Often, the actions of third parties are excluded from these policies, even if they are contractors who work on an almost exclusive basis for the company.
These policies might cover third parties by default, but it may be possible to purchase additional coverage that includes these individuals. If your business makes heavy use out of non-employees, this additional expense may be worth it.
Pitfall #5: Not Implementing Risk Management Strategies
When it comes to fidelity insurance, your policy can only go so far toward protecting you and your business. While this coverage can help you recoup your losses due to an act of theft or fraud, the easiest way to protect your business is to prevent these losses in the first place. That starts with implementing risk management strategies.
There are many ways to address these risks, both by identifying efforts to defraud your company or to deter the behavior in the first place. You could install security cameras, particularly in areas where high-value assets are held. Training programs are also vital to ensure your employees do not accidentally assist with an attempt to steal from the business. You can also rely on contracts with employees that make clear the consequences of these misdeeds. These steps can go a long way toward not needing to file a claim in the future.
Talk to a Miami Insurance Coverage Lawyer Today
There are plenty of pitfalls worth avoiding when it comes to purchasing fidelity and crime insurance in Florida. That said, these policies can be the difference between staying open and closing for good when you are targeted by scammers or criminals.
The team at Ver Ploeg & Marino is here to help you make the best decisions possible. We understand the insurance industry, and we can help you protect your business in cases of catastrophic loss, theft, or fraud. Contact us as soon as possible to discuss your options during a private consultation.
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