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Archive for November, 2010

Office Insurance

Tuesday, November 23rd, 2010

Recently, a frantic call was taken from a woman who was starting a medical billing business and had signed a lease for a small office. A friend, who happened to own a courier business, had shared information about her insurance premium costs with our frantic friend, and she wanted to know why office insurance was so expensive.

After calming down, she and the insurance professional discussed the business renters insurance options available to the new entrepreneur.

The first fact discussed was that every business is going to have different needs, risk, and exposure. Her friend with the courier service had a number of employees and company vehicles, so naturally her coverage would be different then a single owner start up company.

Every business needs a combination of liability insurance, business property insurance, and workers or employee insurance. The discussion included business owner’s policies insurance coverage, commercial umbrella policy, boiler and machinery or equipment breakdown coverage, commercial vehicle insurance, Professional and many different options.

As you read this, much like the no longer frantic caller, you’re probably recognizing there are many options available to business owners.

Working with your licensed insurance professional, let them guide you through the coverage options available to you now, and as your business grows.

Make sure you are totally honest with your agent regarding the assets of your business, how much travel will be involved from driving to flying, and a review of any lease you be considering. Together, you will create an commercial insurance package that works for you.

Home Office Insurance

Friday, November 19th, 2010

Home Office or Part Time Home Business?

In this economy, working from home can be a great way to supplement your income or start a new business but make sure you get work at home insurance.

A home office has a great many benefits, such as saving gas and time on commutes, the flexibility to be home for kids and the family, and the chance to start a new business venture with little overhead.

The key point however, is that it is business which is being conducted. Like any other business, it needs to be insured as home office insurance.

Many folks that utilize a home office and/or work out of their homes make the unfortunate assumption that their homeowner’s or renter’s policy will cover any losses. Those policies don’t cover businesses risk. Personal auto policies generally do not cover your auto when being used primarily for business purposes.

In addition, many policies have exclusion provisions for ‘illegal’ acts which could include business being conducted in a residential area, so it is important to check your town’s specific ordinances and business permitting.

If you are just starting out running a business from your home, it is important to meet and review with your licensed commercial insurance agent how your business operates and conducts business. That way, together you can determine the right coverage for your home based business.

Normally, there will be a liability and property policy needed as well as worker’s compensation. Often, your insurance agent can combine the liability and property coverage into a business owner’s policy.

Do not risk your home and assets on not knowing. If you have a business, you have risk.

Talk to your licensed insurance professional and learn what is needed to protect your business, no matter how small or large.

Business Insurance Deductibles

Wednesday, November 17th, 2010

Deciding On Deductibles for your Business Insurance

Your insurance policy will pay a covered loss, minus any deductible written into the policy, which it will not pay.

A deductible is a fixed amount or a percentage of an insurance claim which is to be paid by the insured. Although deductible amounts can be voluntary, meaning an insured can choose a higher deductible to help reduce premiums, there is generally a standard deductible.

Insurance companies impose these standard deductions to avoid numerous small claims. An example would be that your damage is estimated at $7,500.00, and you have a deductible of $800.00 on your policy. The check for the claim you receive from your insurance company would subtract the deductible, in this case, $800.00 and you would receive a check for $6,700.00 to settle the claim.

Generally speaking, the higher the deductible, the lower the premium is on the policy and vice versa.

When deciding on a deductible, it pays to weigh the risk and the impact of a loss as well as the premium in your cash flow analysis. While it may make sense based on your monthly cash flow to pick the highest deductible and lowest premium, it may be exposing your business to a serious risk.

If your business would be crippled coming up with the money to cover a high deductible in the event of a loss, then it’s probably too high a deductible. This is where the savvy small business owner works with their licensed insurance professional to get the best value and coverage for their business.

While deciding on the deductible, another aspect to review is how you as the insured will recoup your loss. A ‘cash value’ basis is a replacement of cost less any depreciation. A replacement cost will repair or replace the insured property at its present cost without depreciation. Naturally, replacement cost will have a higher premium than cash value.

KISS Method of Business Insurance

Tuesday, November 16th, 2010

Growing up, my dad was a fond believer in the K.I.S.S. method of problem solving and analysis. The acronym has a bunch of similar meanings, for the easiest, let’s just say, Keep It Simple Son. So, instead of being really complicated and covering every nuance, let’s break down business insurance in its simplest forms.

General Liability

General Liability Insurance provides protection for injuries or damages sustained by a third party at your business location.

Buildings and Property Insurance

Property and casualty insurance covers buildings and property. As simple as that seems, there are a number of losses that aren’t covered, such as flooding as one example. Just because your business is in leased space and not owned by you does not mean you can go without property and casualty insurance.

Commercial Vehicle Insurance

A commercial auto insurance policy will cover your business vehicles and their drivers. Again, while seeming quite simple, many business owners assume a variety of risks by using their cars and assuming a personal auto policy will cover any risk. Sometimes, the auto coverage can be combined with property and casualty in a business owner’s policy.

Workers Comp

Every business should have workers compensation in place in order to be protected if an employee is injured on the job. Some states also require additional coverage be provided. Meet with your licensed insurance professional to determine what coverage is mandatory.

There are a number of additional types of insurance available to business.  Ask your commercial insurance agent / broker about options available for your business. Have a frank discussion about what risks your company faces while conducting your day to day business.

What Is Commercial Insurance? Business Insurance

Monday, November 15th, 2010

We often talk about commercial insurance, which broken down to its simplest form is really business insurance.

Every business, no matter how small or large, has assets to protect and is exposed to liabilities while conducting business. Therefore, any business owner needs to recognize the importance of securing business insurance.

Life is full of unseen and unplanned mishaps, and the main purpose of business insurance is to maintain and protect the “life” of the business. Any of these potential mishaps could literally destroy the uninsured business, and even worse, the personal assets of the owner of that business.

In simple terms, one single event could put business owners at risk to lose their livelihood and income stream, as well as losing everything they presently own.

Commercial insurance falls into three general categories. They are property insurance, liability insurance, and worker’s compensation insurance.

Property insurance covers the physical assets of the business.

Liability insurance covers damages to third parties such as customers and customer’s property.

Worker’s compensation insurance coverage protects against losses from on the job injuries to employees.

In addition, there is specialized coverage available for the particular risk a business may be exposed to in its day to day operation.

The savvy entrepreneur understands that commercial insurance is part of the start-up costs in any new business. The business owner knows that seeking out the advice and service from a licensed commercial insurance agent is essential. Together, you can design a commercial insurance package to protect the ‘life’ of the business.

Employee Benefits VS. Employee Insurance

Wednesday, November 10th, 2010

Are Employee Benefits the Same as Employee Insurance?

Employee benefits are not the same as employee insurance or workers compensation. Earlier, we covered Let’s look at the differences.

Employee benefits generally start with health insurance and group term life insurance. As part of the health insurance package, an employer may opt to provide both vision and dental insurance.

In addition, an employer may also opt to offer group disability insurance.

A retirement plan is generally offered as an employee benefit as well. Unlike workers compensation insurance, which is legally required by all states, an employee benefit package is provided at the discretion of the employer.

Generally, employers provide these additional benefits to just the employee. However, the employer may also cover the family of the employees as well.

Cost is almost always the determining factor in putting together an employee benefits package. With the rising trend in the cost of health insurance, it is reasonable to ask employees to pay a percentage of the coverage, and perhaps even all of the family coverage. It is not only reasonable, but it is frequently practiced.

As your business grows, an employee benefits package may be necessary to attract and retain good employees. It will behoove you to work with your licensed insurance professional to develop and implement an employee benefits package that makes sense for your business.

Purchase Business Insurance - Do’s and Don’ts

Wednesday, November 10th, 2010

Learn the Do’s and Don’ts if you are looking to purchase business insurance.

Purchasing business insurance starts long before you unlock the door the first day of your grand opening. In fact, we’ve put together a list of Do’s and Don’ts to help guide you through the process.

Buying the proper insurance and proper coverages is a lot more than just filling out and signing an application. Using the following Do’s and Don’ts list will help in your effort to make the right decisions about your new business insurance.

The Do’s

DO find an agent or broker with experience in your particular business. For example, if you’re a tow truck company, find an agent or broker who specializes in tow truck insurance.

DO interview several agents/brokers. Take notes and get a feel for their personality. Does it fit you?

DO comparison shopping as your interviewing the agents. Ask them for their recommendations regarding your specific business. They should be willing to submit these to you for no charge.

DO read the policy carefully. Have it looked at by your attorney if you’re unsure of any terminology.

DO make a list of your business property and assets.  Give a copy to your agent for his recommendations.

The Don’ts

DON’T sign with an agent only willing to offer a package. Customization is important.

DON’T purchase a policy that is significantly lower than other quotes without asking questions.

DON’T underinsure your business to get a reduced premium.

DON’T accept a policy that doesn’t cover all your needs and risk exposure.

DON’T assume anything; If you don’t know, ask.

When to File a Business Liability Claim

Tuesday, November 9th, 2010

When Is the Right Time to File a Business Liability Claim to Your Insurance Company?

A common problem we see throughout the insurance industry is clients waiting too long to file a claim with their commercial insurance agent and their insurance company.

Liability claims are slow-moving, take time, and typically run from the initial complaint or claim and end up in court. This time frame will usually span several months or longer.

All too often, business owners wait until several months have passed, or even longer before notifying their commercial insurance company. Even worse, some owners try to block it out and hope it will just go away on its own or retain their own counsel to investigate and initially offer advice or a quick remedy.

Any of these choices can jeopardize coverage for a potential liability claim, even if that scenario is actually covered under the liability policy of the business.

A business liability policy typically states a policyholder needs to notify the insurance company if a situation has occurred that could result in a claim. By notifying your insurance company immediately, there is time to both investigate and prepare a defense if necessary. By waiting too long, the company may deny the business liability claim due to a lack of proper notice or simply agree to settle due to a lack of time to prepare a defense.

Your business should always have an attorney it works with. When it comes to a business liability claim, your policy and the insurance company will spell out the litigation process and course of defense. It is possible to have your commercial insurance company compensate your attorney, but you must start the process early and not later.

Make sure to review your present liability coverage with your licensed insurance professional.

Looking for Chiropractor’s Insurance?

Monday, November 8th, 2010

Is Chiropractor’s Insurance Enough?

Recently, we heard about an inquiry from an office manager of a chiropractic practice who was asked to save money by shopping for chiropractor’s insurance.

The office manager was convinced that they had way too much coverage and was determined to cut out coverage and reduce the monthly premium. She figured a commercial insurance agent had taken advantage of the chiropractor and she was about to make everything right by searching for Chiropractor’s Office Insurance.

Taking the proper time to analyze the situation, the insurance professional uncovered a problem that is normal in small business, regardless of the type of business. That problem was simply a lack of knowledge regarding business insurance and risk assumed by the owner — in this case, the chiropractor — as well as the business entity.

Chiropractors don’t have a specific ‘Chiropractor’s Insurance.’ Instead, like all businesses, they have a blend of general liability and property insurance coverage to protect the operations of business.

One simple misconception the office manager had was why there was property insurance in place. In her mind, the office space was leased, and the owner of the building assumed that liability not realizing office equipment must be covered by the leasee.

When the lease was reviewed, it was obvious the chiropractic practice needed that property coverage.

Another misconception by the office manager was that malpractice insurance would cover the doctor and staff in the event of any patient injury, and that the business liability policy was just a duplication of coverage.

A detailed discussion of the differences helped the office manager understand the malpractice insurance would protect the doctor and staff against a claim of injury from treatment, but not from falling down in the lobby.

The real lesson learned from the previous scenario is to review your coverage annually with your licensed commercial insurance agent. Make sure the insurance agent/broker is experienced in commercial business insurance and can answer all of your questions and concerns.

Do you need startup insurance? Consider Insurance Risks

Thursday, November 4th, 2010

What Types of Risk Can I Really Face as a Business Owner Just Starting Out?

This startup insurance question piggy backs a number of articles we’ve shared in the past.

Frankly, the question really boils down to this, “Why do I really need business insurance, especially as a start up company?” I mean really, isn’t that the real statement behind our title? Don’t you really want to ask yourself if you need startup insurance?

What follows is a list of real scenarios documented with insurance companies across the country.  As you read through, I am sure you’ll run across enough to make you say, “Ahhhh, I get it now.”  Let’s get started and follow these situations which expose you and/or your business to risk.

* One of your employees is interviewed by a publication without your knowledge. In the interview, your employee refers to a competitor as, “A sleaze ball who gouges his customers every chance he gets.” That competitor immediately sues you and your business.

* You walk into your office the day after your grand opening and discover the back door wide open, and all your computers and phones are gone.

* Your old toaster oven causes your newly leased office and the building to burn down.

* You meet prospective clients for lunch. One of them has to leave and you volunteer to give the other a ride home.  Driving back to their office, you run a stop sign and get hit by another commercial vehicle in which everyone involved gets seriously injured.

* A customer walks into your store, slips on a just mopped floor and breaks his ankle.

* A month into your retail shop being opened, vendors start calling demanding payment on bad checks. You discover your bookkeeper made deposits to her account and has now disappeared.

Are there risks assumed the minute you start a business? Absolutely!

Getting business insurance in place must always be a priority for a new business.