One of the most basic elements of your insurance policy is your deductible. As you may have different types of coverage to protect the major areas of your business, it’s possible that the deductibles will vary for each policy. Let’s take a look at how some examples of deductibles below.
What Are Deductibles in insurance?
Insurance deductibles are the amount of money that an insured must pay out-of-pocket before insurance coverage kicks in. For example, if you have a $5,000 deductible on your cyber insurance policy and you have a cyber attack or data breach that causes $30,000 worth of damage to your business, you will have to pay the first $5,000 of repair costs yourself and your insurance company will cover the remaining $25,000. Meanwhile, if you have a professional liability policy with a $10,000 deductible, you would pay that amount first, and your policy would cover the rest of the costs.
Deductibles can vary based on the type of insurance policy, the insurer, and the amount of coverage you purchase. Higher deductibles usually result in lower premiums, so it is important to make sure that you can afford the deductible if you need to make a claim.
Some deductibles are per-incident, which means that you pay the deductible for each separate incident. Other deductibles are per-policy, which means that you will only have to pay the deductible once during the policy period, no matter how many incidents occur.
It is important to understand your policy deductibles before you purchase a policy, so that you know what to expect if you need to make a claim.
Additional Resources Beyond Deductibles
With the complexity of insurance and new terms to know around every corner, Embroker strives to make insurance simple. If you’re looking for more ways to improve your business, check out these deep data dives and must-know industry statistics.
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