Glossary term
What is Deductible?
Short answer
A deductible is the amount you pay yourself on a claim before your insurance starts to pay.
Deductible, explained for tree service owners
If a policy has a deductible and you have a claim, you pay that part first. A higher deductible usually means a lower yearly premium, but it also means more cash needed when something goes wrong. A tree owner should keep enough cash set aside to cover the deductible on each policy. Picking the number is a money choice: ask yourself if the business could pay it in a bad week. This is a short explanation, not insurance advice. Your agent can show the choices side by side.
Related terms
- Accounts receivable
Accounts receivable is money that customers owe you for work you already finished and billed.
- Progress payment
A progress payment is a partial payment made as a long job moves along, instead of one payment at the end.
- Working capital
Working capital is the cash a business has available to run day to day, after paying short-term bills.
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