What Business Owners Should Know About Hammer Clauses

Taking out insurance is one of the more important ways you can protect your business. However, you cannot simply assume that a standard plan is the right fit for the structure of your establishment. Whether you work in a niche industry, require extra protections, or operate in an area with major restrictions, you might need additional policies or coverage considerations to meet all potential hazards. For example, many people fail to take time to think about hammer clauses and what it means for their policies.

What Exactly Is a Hammer Clause?

Essentially, a hammer clause is a point all consumers should understand before taking out an insurance plan. This clause gives power to the insurance provider in scenarios where the entity believes that the policyholder should settle a claim instead of dispute it. This clause effectively takes control from you and allows the insurance agency to make the choices on your behalf, regardless of whether or not you’re responsible. Be sure to learn more about this clause before you assume that your coverage will protect you in all scenarios. Other policy options to consider include:

  • Liability coverage for directors
  • Commercial vehicle coverage
  • Protections from errors and omissions

Learn More About the Policy

In order for you to best protect your business with insurance, you need to know each and every detail about the policy in advance. Take time to look over your options with hammer clauses and see how they can impact your decisions moving forward.