Prepare for biz losses

A. Over the years, we have noticed that most HME providers focus on only two things: pricing and the minimum liability coverages required by the vendors they deal with. Unfortunately, if your insurance broker does not bring up business loss of income coverage, tens, if not hundreds, of thousands of dollars in claim expenses will not be paid because of this valuable coverage being left off or written incorrectly in your policy.

With the existence of many different types of policy forms and a very poor economy, loss of income coverage has become crucial if a HME business is to survive after an insured loss occurs. Historically, when an insured loss happens, more claim payments are made on correctly written loss of income coverage than the actual contents that were destroyed or stolen. Why? Read these definitions for an idea of the scope these coverages provide:

•   Loss of income: This will pay normal operating expenses and net profit, if any, for the period specified. Forms exist for 3-, 4-, 6- or unlimited 12-month periods of time. The insured picks the amount of coverage he needs for the specified amount of time he likes and if an insured loss does occur, it should be enough coverage to get him through until the damaged property is repaired or replaced.

• Loss of rents: This will reimburse the insured for the amount of rents he would normally obtain over a 12-month period while he had an insured loss. The amount of insurance must equal the amount of rents for this 12-month period. This coverage only applies if the insured owns a building.

Please be aware of these coverages on your next policy review--it could mean the difference between moving forward or filing for bankruptcy.