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Archive for September, 2011

Do I need Workers Compensation Insurance

Friday, September 23rd, 2011

Do I need workers compensation insurance?

As a rule of thumb, the simple answer is yes, if you have even one employee. Now, workers compensation requirements differ from state to state with varying options. However, it is also prudent to carry workers compensation with even one employee if not required.

Workers compensation insurance covers medical, rehabilitation costs, and lost wages due to a job related injury or illness. Workers compensation benefits today are quite comprehensive and in addition to those noted, it also includes a death benefit. Unlike other insurance, there is no maximum dollar limit for the employer’s coverage. Required or not, the cost of a serious accident could financially cripple a business and it owners.

While again comprehensive and varying state to state, when the business carries workers compensation, the business is protected from a lawsuit by the injured employee as a result. This ‘no fault’ coverage allows for immediate medical attention and relief for the employer to ligation.

Failure to purchase required workers compensation insurance can be extremely costly. A business would be held to pay all the expenses and also face large fines and penalties. No prudent business owner should expose his business to such high risk. It is also important to note the definition of an employee. If you use subcontract labor take the time to determine how your state defines an employee.

Workers compensation insurance is complicated. Your state department of insurance can offer plenty of guidance and useful information. Talk to your licensed insurance professional as well and make sure your business is covered.

Commercial Insurance Deductibles

Thursday, September 22nd, 2011

Can I raise my commercial insurance deductibles?

First, that question is way too broad. A business may have many types of insurance with many types of coverage and deductibles. Let’s narrow down the question as it relates to specific business insurance.

As a general rule, the insurance carrier who issued the policy will cover the loss up to the specific dollar limit less any commercial insurance deductible. This will save your company in some cases from a cash outlay which could disable or even close your business. The portion not covered by the deductible is what you are required to pay.

It makes sense to review each policy and determine what deductible makes sense today versus when the policy was issued. For instance, say a covered claim is $10,000 and your deductible is $2,500, then the insurance company pays $7,500 and your business is required to pay the remaining $2500. Whether the claim is $2,000 or $40,000, subject to coverage limits (the maximum a policy will pay) your deductible remains at $2,500. So, in the case of the $2,000, it is paid 100% by the business because the deductible was not met.

Commercial Insurance Deductibles can usually be negotiated or have a tier system to choose from. When first starting out, it’s quite possible your business could only afford a minimal deductible. Now, it’s possible that in fact you could cover substantially more for a deductible. Talk with your licensed insurance professional to determine what makes sense. It’s also a good time to review coverage limits as well. If your business has grown, it’s possible your coverage needs to as well.

Property insurance deductibles can also be figured by an individual claim basis or an aggregate basis. Typically, small companies with no or few claims will find the individual claim basis attractive. However, if your company or industry has a large number of claims annually, it may be prudent to look at the aggregate basis.

The best possible way to reduce costs is work with your licensed insurance professional. Review each business insurance policy and together determine what commercial insurance deductibles make sense and offer the protection needed in the event of an incident.

Do I need Professional Liability Insurance

Wednesday, September 21st, 2011

Do I really need professional liability insurance?

If you provide a professional service or give professional advice or recommendations to clients, professional liability insurance is recommended. In fact, those in many professions such as; accountants, lawyers, architects, doctors, engineers, software/computer consultants, and numerous others are required to have professional liability insurance.

At any given time, it is possible for an individual to file a lawsuit against you. It’s also important to remember that when a lawsuit is filed that anyone involved in the incident may be named in the lawsuit.

No matter if you or your business is negligent or not, it often takes many months, even years to reach a conclusion. Even if you and your business are exonerated and found not guilty, the costs to get there can be enormous. If in fact there is an award against you that also can be a staggering amount. One major lawsuit can often cripple or put you out of business. Professional liability insurance will relieve this burden and allow you to continue operating your business during a lawsuit.

No business believes it will make mistakes and not have the customer’s best interest at hand. However, mistakes do happen, and you need to remember, anyone can allege anything against you and your business. In fact, the suit may have little to do with you, but even being remotely involved opens you up to being sued. Unfortunately, sometimes in the litigious society we live in, you may be sued for something you allegedly did or didn’t do.

Professional liability insurance helps you be prepared in the event you find yourself or your business tangled up in a lawsuit. Talk to a licensed insurance professional today and review your present situation. Together, you can determine whether professional liability insurance will be a good fit as part of your business plan.

Business Insurance - Simple?

Tuesday, September 20th, 2011

Business insurance, keep it simple to start.

The language of insurance can be confusing and overwhelming. It’s best to remember the easiest way is to keep it simple and don’t go it alone.

All business insurance is designed to cover people, property, general liability or income of the business. Pretty simple and straight forward when broken down into those simple segments of coverage. Working with a licensed insurance professional will further help in reducing the confusion and the language of insurance.

Let’s look at the people aspect of coverage. The most important asset of any business is the people who own and work for it.  Workers compensation protects these employees.

Its important to remember that workers compensation insurance is required in almost every state. Health insurance, life insurance and disability insurance protect the owners, managers and employees.

Health, life, and disability are benefits which can be offered but aren’t required. In a few states, disability insurance is also required. Your state department of insurance and your insurance agent will guide you through the people aspect of covering your business.

Property insurance will include the building your business is located, either owned or leased. In addition, furnishing, and equipment as well as machinery, tools, computer and phone systems, anything used to conduct business will be protected.

Liability insurance protects the business from being held liable for injury or error. This includes damage to property as well as to people as well as implied damages. It is important to remember that liability insurance covers the cost of litigation for these claims. In addition to general liability insurance, discuss with your insurance professional if professional liability insurance or errors and omissions insurance, two other forms of business liability insurance may be needed.

The last type of coverage is income insurance. If revenue stops, a business cannot survive a long time. Should a disaster hit, business interruption insurance can provide a stream of revenue while rebuilding or relocating to a temporary or permanent new location. This type of coverage is usually added as a rider.

While we try here to keep the discussion on insurance simple, don’t make assumptions about your businesses coverage. Work with your agent to determine what coverage is appropriate, how it works, and what happens in the event a claim needs to be placed.

Startup Business Insurance

Monday, September 19th, 2011

Business insurance for the start up company.

Many people have found themselves either totally out of work or, to use a new buzz phrase, underemployed.

This trend has caused many of these same people to look at becoming self-employed and starting a new business. Whether full-time or part-time, it is important these new business owners consider the new risk exposure their venture will bring.

You cannot and should not assume or consider that a homeowner’s policy will cover any of this new risk uncovered by being a business owner.

Most Americans today who are starting a business do not have a large amount of assets such as vehicles and equipment, machinery and a large number of employees. Without being a large business, your insurance needs should be fairly easy to determine.

This is where a Business Owner’s Policy can be a good decision. Sometimes known just as a BOP, this type of business insurance policy can reduce or eliminate a lot of that new risk.

A Business Owner’s Policy normally covers all the basics for your new start up or existing small business. This includes basic property and liability protection for your small business. More often than not, your Business Owner’s Policy can be added to and coverage(s) extended as your business grows.

In addition you also may have the option of adding some additional coverage like business interruption insurance. This coverage will pay normal expenses like mortgages and vendors in the event your business is closed as a result of a fire or other catastrophe.

Review this type of business insurance with your licensed insurance professional and see if it makes sense for your business. Make sure to understand what is covered and any exclusion written in the policy. It’s important to protect both your personal assets and those of your new business.

Business Insurance Basics

Friday, September 16th, 2011

Besides basic business insurance, what other coverage should I consider for my business?

Often, we discuss basic insurance needs for businesses.  These types of insurance include general liability insurance, property insurance, and workers compensation insurance. However, there are a variety of coverage options either available through a rider, or a separate insurance policy which a business owner may wish to consider for their specific business and needs.

Here are some available options in alphabetical order and not in order of any importance.

Business interruption insurance will provide income to cover costs if the business in closed or unable to operate for a period of time.

Crime insurance will protect against burglary, theft, and robbery from outside parties and employees.

Commercial umbrella policy will kick in if cover limits are exceeded for further protection of business assets.

Debris removal is generally not covered in business property insurance.

Directors and Officers Liability Insurance is for protecting the officers and directors from lawsuits.

Disaster insurance such as flood insurance which generally isn’t covered in the property insurance policy.

Employment practices insurance deals with hiring and employment issues such as wrongful termination, sexual or other discrimination, privacy issue and more.

Equipment breakdown insurance will protect from losses suffered if machinery or equipment vital to the business breaks.

Glass insurance for protection against broken store and plate glass windows repair and replacement.

Kidnap and Ransom insurance is designed to protect individual and companies working around the globe

Professional liability insurance should be considered if you recommend and advise or offer a service such as accounting or law.

There are many types of coverage options available. Ask your licensed insurance professional about options that may fit with your specific business and location. The department of insurance in your state can be a very good resource as well.

Never Assume Anything about Business Insurance

Thursday, September 15th, 2011

Never assume anything about your business insurance.

Your business insurance, also known as your commercial insurance is more expensive as a rule, and much more complicated than your personal insurance. One mistake we see business owners make time and time again is failing to read or understand the coverage they have in place.

For example, many business owners assume that if the building they own or lease floods, it is covered. The same is true of a tornado or wind storm. The fact is it’s very possible none of these may be covered by the current property insurance you have in place. Many policies will cover rebuilding, but what about debris removal. In the event of a catastrophe, the debris removal could run into tens of thousands of dollars, even more.

Another assumption business owners make is not about the insurance, but the down time involved in the event of a disaster. Especially if other locations may have the similar damage and issues, rebuilding could take months or even a year or more. Don’t make this costly assumption and overlook business interruption insurance.

Still another assumption by business owners is their equipment will operate without ever breaking down. Some also mistakenly think this may be covered in their business property insurance. Mechanical breakdown insurance, sometimes known as boiler and machinery insurance will cover these costly repairs or replacements.

There are many more assumptions made by business owners every day that put their businesses at high levels of risk.

Assuming your general liability coverage may be enough is one. Often professional liability insurance is needed to supplement that coverage, or perhaps even a commercial umbrella policy which would kick in after other limits are met. Never assume it won’t happen to you, it can and it will. No one ever believes it when an event takes place, but they always breathe easier knowing the proper coverage is there when it does.

Take the time to sit down with your licensed insurance professional and review your personal list of assumptions. Never assume, always know what is in place for your business insurance.

Internet Business Insurance

Wednesday, September 14th, 2011

My business is internet based; I don’t need internet business insurance, right?

Any business, small or large needs to protect itself and its assets with some form of commercial business insurance. Just because you operate an internet business does not exclude you from risk. In fact, certain exposure is far greater depending on what type of business you may conduct on the internet.

Let’s start with the basics. Your internet driven business has a location. It may be your home, or another owned or leased location. First, remember that homeowners policies neglect to cover just about any business losses. Knowing that, we will assume the basic business coverage is needed.

Property insurance and general liability insurance are needed for any business. Property insurance will cover the space the business is located as well as office furnishing. General liability insurance will cover against claims of bodily injury or property damage.

Workers compensation is required in most states if your business has employees. A business owners policy can be a good starting point for an internet business.

While it won’t cover workers compensation insurance a business owners policy will combine both property and general liability insurance into one policy. Within the business owners policy is the ability to add specific coverage related to internet business risk.

These types of coverage are evolving at a rapid rate. You can add Computer Operation Interruption coverage in the event of income loss due to computer system breakdown. Electronic data loss covers the repair and replacement of information lost due to harmful viruses. You can also add Electronic Data Liability coverage for loss of data caused by an electronic data incident.

Talk with your licensed insurance professional about whether a stand alone e-commerce policy or a business owners policy will cover your internet business insurance needs. Never assume you are covered or not exposed to significant risk in your internet business.

Professional Liability Insurance

Tuesday, September 13th, 2011

My business has general liability insurance, why do I need professional liability insurance?

Many business owners make the mistake of assuming professional liability insurance, or errors and omissions insurance is only for doctors and lawyers. In fact, the term professional is defined as, “someone who is an expert and trained and educated in the field in which they perform.”

People who provide a degree of skill, care and are held to a higher standard may be held accountable if they fail to adhere or perform to a standard of industry. Based on that definition, in addition to doctors and attorneys, anyone who provides professional service to the public should consider professional liability insurance. This includes but is not limited to professions such as realtors, accountants, insurance agents, chiropractors, engineers, consultants, home inspectors, and others which provide professional service or make specific recommendations.

Our society today expects a level of quality and advice and not meeting that expected level may result in the claim of error or damage. Professional liability insurance will protect against financial costs and losses from a lawsuit brought against you or the business as a result of a recommendation or service provided.

Professional liability insurance will cover the costs to defend or settle a claim brought you, your company, or in some cases, your employees. It will cover an individual claim up to a certain limit and also may include a coverage amount limit for the term of the policy.

Contact your industry association and also the department of insurance for recommendations and options. Then speak with a licensed insurance professional to determine what is needed by your particular business. Different businesses require different coverage and will be written specific to your business.

Demolition Insurance

Saturday, September 10th, 2011

Insurance companies are no longer running away from the wrecking ball.  At least not on buildings of 3 story or less.  That is due to the fact explosives are not use in these type operations therefore the risk is less.   There are main stream companies now entering this market who previously shied away from these risks.

 

Because more main stream competitors are entering the market, rates are decreasing and competition is increasing.  Traditionally, these operations are less risky as previously thought, but companies have become aware this has been a long under-served market and have developed specialty products and rates placing them under their “program markets” allowing agents to address the industry’s special needs and access a company’s expertise.  If you have questions regarding your insurance, please talk with your agent or one of ours.

 

Commercial Insurance.Net, LLC Advisor is not an attorney, accountant or certified financial planner and makes no representations or warranties to that effect.  Always check with your chosen professional as to statements made in this blog for your particular situation.