How to Read and Understand Your Insurance Policy

How to Read and Understand Your Insurance Policy

In a complicated and changing business market, you may not always have time to contact your insurer to review your New Mexico Business Liability Policy. It is important to be able to read and understand your insurance policy on your own.

The first portion of your insurance policy is usually entitled, “Declarations.” It will state general information about your business and about your insurance provider, including how to make contact if a claim arises. It also states the monetary limitations of your coverage for liability, property damage and business losses. When in doubt, rely on the declarations page rather than your own memory. Ensure that any changes or updates to your policy are reflected in a new declarations page. Always keep a current copy in a convenient location.

The next important things to look for in your insurance policy are statements of coverage and exclusions. Coverage for accidents and injuries may include time limitations. Be sure that you understand what kinds of actions are covered and under what circumstances. Remember that actions that are intended to cause harm are usually not covered under a New Mexico business liability policy.

You do not need to become an insurance expert, but you should develop more than a passing familiarity with your insurance policy documentation. Doing so helps you recognize and cover insurance gaps, determine areas of risk and weed out redundant coverage.

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