Insurance Gap Analysis

by Wendel Clark; Updated September 26, 2017

An insurance gap analysis is an effective way for a business to understand its insurance needs. Specifically, an insurance gap analysis can identify any areas where a company may be under-insured.

Significance

Performing an insurance gap analysis is important for managers. Being under-insured in any area is a major liability for an organization. If a company does not carry all the insurances that it should, or if the amount of insurance is too small, it could have a huge negative impact on the company's finances.

Steps

The process of an insurance gap analysis begins with an assessment of insurance needs. The business should know what types of insurance it should carry and the coverage amounts. The next step is to assess the current insurance levels. Finally, the gap is measured between the current insurance levels and the needed insurance levels.

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Warning

Insurance can be a complicated matter for a large business. Because of this, it is recommended to seek the help of a lawyer that specializes in liabilities as well as an insurance professional.

About the Author

Wendel Clark began writing in 2006, with work published in academic journals such as "Babel" and "The Podium." He has worked in the field of management and is completing his master's degree in strategic management.

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