Buffer Insurance: A Comprehensive Guide

As a business owner, you know that there are a myriad of risks that your company faces. From natural disasters to employee lawsuits, there are countless ways that your business could be financially impacted. The good news is, there’s a type of insurance that can help you prepare for these unforeseen events: buffer insurance. In this article, we’ll provide a comprehensive guide to buffer insurance, including what it is, how it works, and why it’s important for your business.

What is Buffer Insurance?

Buffer insurance, also known as excess insurance, is a type of policy that provides coverage when your primary insurance policies have reached their limits. In other words, buffer insurance acts as a safety net for your business, protecting you from devastating financial losses that could arise if you were to exhaust the coverage on your primary policies.

Buffer insurance policies typically have higher limits than primary policies, and they can be customized to fit your specific needs. For example, if you have a general liability policy with a limit of $1 million, you could purchase a buffer policy with a limit of $5 million to provide additional protection if a lawsuit were to exceed the $1 million limit on your primary policy.

How Does Buffer Insurance Work?

Buffer insurance works by providing coverage in excess of your primary policies. For example, if you have a general liability policy with a limit of $1 million and a buffer policy with a limit of $5 million, the buffer policy will kick in after the $1 million limit on your primary policy has been exhausted.

Buffer insurance can be purchased for a variety of different policies, including general liability, commercial property, and professional liability. The premiums for buffer policies are typically lower than primary policies, since the likelihood of a claim reaching the limits of both policies is relatively low. However, buffer insurance is still an important safeguard for your business, since the financial impact of a catastrophic event could be devastating without adequate coverage.

Why Do You Need Buffer Insurance?

There are several reasons why buffer insurance is an important consideration for your business:

1. Increased Protection: Buffer insurance provides an additional layer of protection for your business, ensuring that you’re covered in the event of a catastrophic event that exceeds the limits of your primary policies. This increased protection can help you avoid financial ruin if a lawsuit or other event were to wipe out your primary policy limits.
2. Customizable Coverage: Buffer insurance policies can be customized to fit your specific needs. You can choose the policy limits and types of coverage that make the most sense for your business, ensuring that you’re adequately protected without overpaying for unnecessary coverage.
3. Peace of Mind: With buffer insurance in place, you can rest easy knowing that your business is protected against the unexpected. This peace of mind can help you focus on growing your business, rather than worrying about the financial impact of unforeseen events.

Buffer Insurance FAQ

How Do I Know If I Need Buffer Insurance?

If your business has significant assets that could be at risk in the event of a catastrophic event, or if you’re in a high-risk industry, buffer insurance is likely a smart investment. Contact an insurance broker to discuss your specific needs and determine whether buffer insurance is right for you.

How Much Does Buffer Insurance Cost?

The cost of buffer insurance varies depending on the type of coverage you need, the policy limits, and the risk factors associated with your business. However, buffer insurance premiums are typically lower than primary policy premiums, since the likelihood of a claim reaching the limits of both policies is relatively low. Contact an insurance broker for a quote on buffer insurance coverage for your business.

What Types of Coverage Can I Get With Buffer Insurance?

Buffer insurance can be purchased for a variety of different policies, including general liability, commercial property, and professional liability. Your insurance broker can help you determine which types of coverage make the most sense for your business.

How Do I Purchase Buffer Insurance?

Buffer insurance can be purchased through an insurance broker. Contact your broker to discuss your specific needs and obtain quotes for buffer insurance policies.

How Do I Know If I’m Underinsured?

If you’ve only purchased primary policies with low limits, or if you haven’t reviewed your insurance coverage recently, you may be underinsured. Contact an insurance broker to review your current coverage and determine whether you need additional protection through buffer insurance policies.

Conclusion

Buffer insurance is a smart investment for any business owner who wants to protect their assets against the unexpected. With customizable coverage options and affordable premiums, buffer insurance provides an additional layer of protection that can help you avoid financial devastation in the event of a catastrophic event. Contact an insurance broker today to learn more about how buffer insurance can help you protect your business.