By MATT CHANDLER
mchandler@bizjournals.com | 716-541-1654

Tough times call for tough choices.

While some business owners and managers search for ways to cut costs and trim the fat, others choose to evaluate their level of protection - i.e., insurance coverage. Though being underinsured can be a risky proposition, when the chips are down, making sure you have adequately allocated your risk can be critical to your operation's long-term success.

Attorney Audrey Seeley, a member of Hurwitz & Fine PC in Buffalo, discussed several ways business owners can alter their approach to insurance coverage and weather the economic storm.

Given the state of the economy, what has been the biggest challenge in your practice area?

Seeley: The No. 1 thing that I see because of the current economic climate is a lot of business owners looking to be more proactive with regard to insurance coverage and protecting their assets. What I'm seeing today isn't necessarily changes in the rules or new legal decisions, but we are being inundated with these types of questions.

What advice do you have for small-business owners who worry they are not adequately addressing their insurance issues?

Seeley: As a small-business owner, you are going to be entering into contracts. It may be for construction work; it could be for a snowplowing contract. Whatever it is, you need to make sure you are protecting the assets you have. So when you get those contracts in, before you sign anything or let work begin, scour that contract. Make sure that you have a legally enforceable defense and indemnity provision in the contract. You want to make sure you are protected if something happens and you are named in a suit.

There is also generally an insurance procurement provision within the contract. Dig deeper in that provision and make sure it is affording you primary and non-contributory coverage. Many times you will see something called a certificate of liability. I don't recommend that you would rely solely upon that to ensure that you are afforded additional protection under somebody else's policy.

You mention digging deeper and asking more questions when it comes to insurance. Is there a problem in that people sign without thoroughly reading and understanding documents?

Seeley: I think a less-sophisticated consumer may fall into that, but more than that, there are those out there who believe in a standard contract with standard provisions and they don't see the need to review all of it. You want to avoid litigation over these issues, and in order to do that you need to understand - and have your counsel review - all of the documents and policies.

What else can be done to head off liability?

Seeley: A very simple thing to do is visit with your insurance agent once a year. Look at the natural disasters recently. As a small-business owner, do you have flood insurance? If so, what does it cover and what does it exclude? Review with them whether or not you have had any changes in your business.

You would be surprised how many people don't do that and don't understand their coverage.

Can you give an example of how a change in business could affect insurance coverage?

Seeley: If you operate a carpentry business and you suddenly decide to get into asbestos removal because you think you are going to make a lot of money doing it, that could be an issue.

There are exclusions in your policy for bodily injury and property damage arising out of asbestos removal. If you are in a business, you need to disclose everything so that you make sure you have sufficient insurance coverage.

Let's finish with coverage that virtually everyone deals with - auto insurance. What are you seeing?

Seeley: Auto insurance is extremely competitive. If you don't like the premium you are paying now, chances are you can go out and obtain the same coverage for less money because everything is online and it is so competitive.

Rather than people adjusting their deductible to save money or altering their insurance coverage to save, I think you see more people going out to market to get the same coverage at the lower premium.