Insurance is like the robe the doctor gives you to wear when you get a checkup. Fron the front, you're all covered, but what's hanging out the back? Your ASSets!
Insurance is your first line of defense, but insurance doesn't cover many things.
Contractual Disputes
Any breach of a contract, promise, warranty or guarantee in your business is not generally covered by insurance. As a matter of public policy, insurance carriers don't cover such risks. This would include a breach of warranty on a title insurance policy. Most sellers assume they are covered for this risk, when in fact it is the BUYER who is insured. Once the title insurance company pays out the buyer on a warranty claim, they turn around and seek subrogation (sue) the seller. Surprise! This is why you should never sign personally on a warranty deed, but instead use a land trust for each property.
--->>> Click here for information on land trusts
Intentional Acts
No intentional act is covered by insurance as a matter of public policy. If someone claims you did something intentionally, such as an assault, act of fraud, or intentional misrepresentation, your insurance may not cover the claim.
Claims Beyond the Limits of the Policy
It's great having a million in insurance coverage, but what if you are sued for two million? Five million? It seems that nobody sues for small potatoes these days - look at the judge who sued his dry cleaner for $67 million over a pair of pants!
Don't Cancel Insurance
Don't get the idea that I am saying insurance is NOT necessary, it is; however, it is not enough by itself.The bottom line is that insurance is your first line of defense, so you need to have a plan better than just insurance that includes corporate entities like LLCs, corporations and limited partnerships.
