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.
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.
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.
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.