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Archive for December, 2010

Information About Business Insurance

Thursday, December 16th, 2010

Simple Information About Business Insurance

If you are a new entrepreneur or considering starting a business, insurance is an essential piece of that puzzle.

It’s normal to have questions regarding the type of coverage your business requires, and that is why you should consult your licensed insurance professional about this item of insurance.

Commercial business insurance covers a broad spectrum of protection that includes your property, you and your employees, and your business liability. As you begin to understand and put the pieces together, it is important to remember the ultimate goal is to make sure you are never under insured or exposed in the event of an incident or disaster.

The business property insurance will cover losses to your building, and the property housed in it. The computer and phone systems, furniture, finished goods, as well as carpeting, lighting fixtures and supplies will be covered. There are two options, either actual cash value, which is purchase price less depreciation, or the replacement cost of the item. Discuss these differences in more detail with your agent.

Most businesses are required to have workers compensation insurance. This covers the employee from lost wages while protecting the business against being sued by the employee. More specific information is available from the insurance department of your state government.

Business liability insurance must also be in place to protect the business and the owner against lawsuits. A general insurance liability policy will cover most situations that may arise.

There are specific types of business liability coverage for risks not covered within the general liability policy. An example would be liquor liability insurance which is a separate coverage generally taken out by bars and restaurants. Ask your licensed insurance professional what else you should be looking at for specialized coverage.

Lowering Business Insurance Premiums

Wednesday, December 15th, 2010

What Can I Do To Lower My Business Insurance Premiums?

All business insurance premiums are determined by the risk assumed by the commercial insurance company for the coverage limits offered.  Let’s focus on business insurance premiums.

The commercial insurance company evaluates the policy applied in order to determine the risk, or potential losses, that could be incurred by the commercial insurance company and bases the rates on this information.

Using this information, anything you do as a business owner to reduce the potential risk is not only a safeguard for your business, but might help you lower your premiums.

Consider taking the following steps to lower your business insurance premiums:

1. Ensure you have and maintain adequate lighting throughout your building and grounds.

2. Install a sprinkler system in your building as well as smoke detectors and fire alarms.

3. Keep good records of your inventory and business equipment. Videotaping your equipment, furniture, and machinery is a very good idea.

4. Have a safe and keep little cash available in your registers if you’re a retail business.

5. Keep you building, the electrical system, stairs, and elevators clear and in good working order.

6. Conduct employee training on proper lifting techniques as well as general employee safety and well being.

7. Always ensure that updated and proper safety equipment is required and used.

8. Check employee driving records before hiring and periodically.

9. Invite your commercial insurance agent in to tour your business and have the agent make recommendations and advocate for your business.

10. Most importantly, review your coverage annually and keep your licensed business insurance professional in the loop to changes in your business. Review deductibles and how they affect your business insurance premiums.

When Should I Review My Business Insurance Policy?

Tuesday, December 14th, 2010

How Often Should I Review My Business Insurance Policy and What Should I Look For?

If your business is growing — or unfortunately likely in this economy getting smaller — you should, as a small business owner be reviewing your business insurance policy annually.

First off, let’s review whether additional coverage limits to your existing policy may be needed. Then, we’ll take a look at whether adding additional insurance for specific types of risk may make sense as your business grows.

If your business has added new products or services, or added equipment or leased or added new space, it makes sense to review your general liability insurance with your licensed insurance professional. It is important to increase coverage limits and review deductibles to maximize your insurance benefit.

Are sales increasing going up? It may be time to look at a business interruption policy to replace revenue should a major loss interrupt your business for a period of time.

If sales are rising, have you added employees? It may also be time to review your workers compensation insurance as well as your benefit package if you provide it.  You may now qualify for some volume discounts as your business grows.

Some additional insurance coverage you may wish to consider if your business is growing includes:

Life insurance: If your income and assets are growing, a smart business owner protects his family by increasing the life insurance coverage in place.

Disability insurance: It may be time to protect your income and those of your employees by adding disability insurance.

Directors and officers insurance: As your company grows, you need to protect the board and officers in the company from any lawsuits brought against the company.

Obviously, if sales and revenue are down, a hard look at reducing coverage may in fact be in order. This is where the advice and direction from your trusted insurance specialist is critical.

Misconceptions of Business Insurance

Saturday, December 11th, 2010

Misconceptions of Business Insurance

Many business owners, from dentists to court stenographers, ask the same question, “Do I need business insurance?” The answer is always the same, “YES!”

No matter the rationale, no matter the explanation, the bottom line is that every company needs business insurance. But not everybody believes that. Let’s explore these misconceptions in more detail.

Misconception #1

“Nobody will sue me.” This can also sound like, “I don’t make any money, and you can’t squeeze blood from a stone.” Or, any other statement which is a variation of “My business has no assets, and there is nothing for anyone to collect.”

The fact is every business and every person can be sued. Once a judgment is rendered, a persistent attorney can file a judgment lien which does not go away. Assets can be frozen or seized and wages garnished.

Misconception#2

“It’s a corporation, they can’t get me.” Is another misconception that gets repeated time and time again.

The fact is that a corporation protects the officers and owners from actions or damages against the corporation. However, that corporate shield can be pierced or even stripped and a business owner held liable personally. Without doing a case study, the smaller and newer the corporation, the more likely this could happen.

Misconception#3

“If something happens to me, it’s going to get worked out.”

Most businesses don’t survive the death of a principle. Often, the business is dissolved to pay off obligations.

Insure your business and your peace of mind.

Understanding General Business Liability Insurance

Friday, December 10th, 2010

In today’s world, a spilled cup of coffee can result in a lawsuit.

As a business owner, you need to be keenly aware that a minor incident could result in a big legal problem. General liability insurance, property insurance, and workers compensation insurance are a must to be in business. Your liability insurance will protect the assets of your business in the event that it is sued for something it was perceived — rightly or wrongly — to have done to injure or cause damage.

General liability coverage can be purchased as part of a business owner’s policy or separately. A business owner’s policy will package the liability with the property insurance. Normally, when part of a business owner’s policy, the liability limits are fairly low.

You should review and assess risk with your licensed insurance professional.

Things to keep in mind are your perceived risk, like operating a lot of heavy machinery or have a fleet of vehicles on the road than say a consultant. Ask your insurance professional for guidance regarding damage awards in your state as well.

Your general liability coverage will include legal fees and damages in a covered claim and/or lawsuit. Bodily injury, property damage, personal injury, and general damages are normally covered. Punitive damages are usually not covered as they are awarded when it is determined the act was intentional.

In addition, your policy will spell out maximum coverage and limits during the policy period.  It may make sense to purchase a commercial umbrella policy to cover additional risk. Review the limits and work with your licensed commercial insurance agent to determine what is best for your business.

What is Commercial Insurance?

Friday, December 10th, 2010

What Is Commercial Insurance?

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.

General 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 insurance professional is essential. Together, you can design a commercial insurance package to protect the ‘life’ of the business.

Business Renters Insurance

Tuesday, December 7th, 2010

More About Office Insurance

Many businesses lease space in an office building or retail building.  A business renters insurance policy will cover the general space as well as the contents and products used on that site for your business.

Business renters insurance will also offer coverage for accidents and other business liability.

Business renters insurance, much like a personal renters policy, covers the property of the insured, in this case, the business owner.  Contents, such as office equipment, furniture, supplies, products, materials, and the like are covered in the event of a loss due to fire, theft, and other coverage specifically chosen.

Business renters insurance will also cover general liability. It will provide protection against lawsuits, injured parties on your premise, and may cover product liability claims.

Be sure to discuss the particular risk and liability coverage needed with your licensed insurance professional.

While opting for a business renters insurance policy might make sense for your business, it is important to know what isn’t covered. Typically, a business renters insurance policy won’t cover floods & earthquakes.

These types of losses need to be separately insured under different policies. It is important to review these types of insurance and the risk involved specifically for your business with your agent. It is also important to review your liability coverage and limits. It may make sense to purchase a commercial umbrella policy depending again on the risk exposure.

Depending on your business, a business renters insurance policy may be a good starting point to protect your business.