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Archive for November, 2011

Part Time Home Business Insurance

Wednesday, November 30th, 2011

Do I need business insurance for a part time business with an office at home?

In this economy, working from home can be a great way to supplement your income or start a new business. A home office has a great many benefits such as saving gas and time on commutes, having the flexibility to be home for kids and the family, and being able 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. Many entrepreneurs make the mistake of thinking their business and office is covered with homeowners insurance. Most homeowners policies have very limited coverage (often, a $1,000 limit) on furnishing, computer equipment, and business equipment.

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. 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’s important to check your town’s specific ordinances and business permitting. Are your customers coming to your home to transact business? Your homeowner’s policy would not cover liability in the event that a customer was injured in some way on your property if it is for a business purpose.

This is a terrible risk to expose yourself, your family, and your home to. You may need a General Liability policy for your business, or a Business Owners Policy, for example. Premiums for these policies are usually not that high for small businesses. If a claim were to occur, such a policy could save your business and you a lot of money and headaches.

If you’re starting our running a business from your home, it’s important to meet and review with your licensed insurance professional 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 professional can combine the liability and property coverage into a business owner’s policy.

Don’t risk your home and assets on assumptions. If you have a business, you have risk. If you’re starting out at home, it’s a big risk. Talk to your licensed insurance professional and learn what is needed to protect your business, no matter how small or large.

Business Insurance Isn’t Complicated

Tuesday, November 29th, 2011

Business insurance isn’t complicated; break it down by these categories.

Often, we hear things like “business insurance is complicated and difficult to understand” or that it seems like many policies may do the same things in terms of coverage. Let’s break down business insurance in its simplest forms.

Buildings and Property

Property and Casualty insurance covers building 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 also does not mean you can go without property and casualty insurance. So, in addition, it’s possible you need to consider certain types of disaster insurance, like flood insurance. Ask your licensed insurance professional their recommendations and why.

Employees

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

There are a number of additional insurances available to business. Ask your 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.

Benefits like health and life insurance are not mandatory, but are put into place to attract and keep qualified employees.

Liability Insurance

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. Professional liability however, is written under a separate policy and is often referred to as Errors and Omissions insurance.

Vehicles

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.

Use this as a guideline in reviewing options with your licensed insurance professional.

How Can I Reduce the Cost of My Business Insurance?

Monday, November 28th, 2011

Whether you own a retail shop, an auto repair shop, or you’re a chiropractor or a dentist, you have insurance on your business and property. Like other business owners, you are feeling a squeeze and looking to reduce costs and we are often asked, “How can my businesses save some money without giving up anything?”

Unfortunately, while not an easy answer, there are steps a business owner can take to try and reduce their commercial insurance costs. Let’s take at some of these ways to reduce costs.

Typically, general liability rates have been ticking up. That doesn’t stop a smart owner from partnering with a good licensed agent to find ways to save some money. The first step is to examine if you may be able to eliminate double coverage. While we generally advise our clients to get the maximum coverage available, make sure your general liability coverage doesn’t offer product liability coverage while you are carrying a separate policy for product liability coverage.

A business owner’s policy may offer some coverage separate policies don’t like business interruption insurance. Don’t pay for the same coverage twice if possible. A business owner’s policy can often save premium expense by combining both general liability insurance and commercial property insurance.

Ask your agent for safe any safe driving discounts and monitor those employees who are driving company vehicles. Sometimes, one driver with a poor history can cause the rate to go up. Are there multi-policy or multi-product discounts available? Can you save on rates available to associations or organizations which your company is a member? Is it possible to increase deductibles to reduce the premium?

If you have employees, you are probably carrying workers compensation insurance. Reducing workers compensation premiums is a separate article in itself, but ask your licensed insurance professional and your carrier how to reduce costs.

Work with you licensed insurance professional and determine whether you can up deductibles which can lower insurance costs. Set expectations of service which include an annual review, and not just an annual renewal.

Why Should I Carry Business Insurance?

Sunday, November 27th, 2011

We are often asked, “I’m not required to carry business insurance, why should I?

In a tough economy a start up business owner may opt to go without business insurance. Another business owner may consider allowing their business insurance policy to lapse. In each scenario, those business owners are lying to themselves and hoping to justify their decision on not being required.

In today’s business environment and where lawsuits occur over the temperature of coffee served, operating without liability insurance is like skydiving without a parachute. Trying to defend a claim, legitimate or frivolous, without liability insurance can put a business into bankruptcy from this one event. One accident, one fire and not only can the business face financial ruin, so can the owner of the business. Safeguarding both the business and your personal assets is not where to cut costs and try to save a few bucks.

A business needs general liability insurance and property insurance in place. When times are tough, it sure may look like an easy way to improve cash flow. This coverage is too expensive not to have due to the risk exposed, but there are ways to reduce the premium and get the best value for the coverage. Take a look at whether you can combine coverage by utilizing a Business Owners Policy.

This type of policy offers liability insurance as well as property insurance for your business. You can often add some coverage like business interruption to these policies. A Business Owners Policy is typically less expensive than purchasing policies separately. You may be able to reduce coverage limits and increase deductibles. Don’t be afraid to ask your licensed insurance professional for help. Be candid and let your agent know what’s happening with your business. If necessary, don’t be afraid to shop around for better rates. Just remember to get the same coverage if you that becomes the case.

There is certainly a cost involved for protecting your business from risk. Business insurance offers the owner peace of mind that the business they are building can withstand a frivolous claim or the cost of litigation or go through a fire or some type of catastrophe. Having the proper small business insurance in place is one of the most important steps a business owner can take in protecting their business and themselves.

Understanding Property Insurance for Your Business

Sunday, November 27th, 2011

Many business owners believe their property insurance will cover damage from a disaster. That often is not the case. In general, your property insurance will cover you from a loss of a common risk like an accident, theft, or vandalism. Fire is normally covered under you property insurance but flooding may not be. Flood insurance is purchased as a separate form of insurance.

Earthquakes are another disaster which is often excluded in business property insurance. If your business is located in an earthquake-prone area, you will need a separate earthquake insurance policy or commercial property earthquake endorsement to adequately protect your business.

In this day and age, if your business were damaged from a terrorist attack, your business property insurance would not cover the damage. Under the Terrorism Risk Insurance Act of 2002, businesses must purchase additional terrorism coverage to protect against losses due to terrorist attacks. One exception to this exclusion is that worker’s compensation will still cover injured or killed employees as a result of a terrorist attack. Nuclear attack and damage from war is also not covered.

Normal wear and tear is not covered by business insurance. Normally, damage from a loss of power is not covered. However, many policies cover computer loss and data loss today.

In the world of insurance today, there are various packages available to cover a multitude of risks. The key is to maximize coverage without duplication. Work with your licensed insurance professional, your commercial insurance agent to figure out specifically what coverage(s) is needed to protect your business property.

Your agent or broker can determine what coverage and risk your particular business could face. You’ll need to compare policy coverage, premiums, risks, deductibles, and many factors in selecting your final property insurance coverage. Like many business people, after weighing the options, you’ll want to choose the most coverage you can afford.

Obviously, get the coverage(s) in place as most likely to least likely if affordability is an issue. Even with disaster insurance, look at the details of the policy and coverage options.

Business Insurance for Small Service Businesses

Saturday, November 26th, 2011

Is business insurance for small service businesses really that expensive?

My phone rang recently, and upon answering it, I was barraged for several minutes about why business insurance was so expensive.

On the other end of the line was an acquaintance who knew I was a business insurance professional. It seems my acquaintance was about to start a medical billing service and shared that fact with a friend who owned a taxi company.

Once she was calmed down, I was able to explain that every business was different. In the case of the taxi company, they were insuring a number of vehicles, a garage, and also had several dozen employees. In no way was this an apples to apples comparison.

We discussed the business insurance options available to our new entrepreneur.

The first part we discussed was that every business is going to have different needs, risk, and exposure. I pointed out that every business needs a combination of liability insurance, property insurance, and workers or employee insurance.

Our discussion included business owner’s policies, additional insurance coverage like errors and omissions, an umbrella policy, boiler and machinery or equipment breakdown coverage, commercial auto insurance and many different options.  As you read this, much like our no longer frantic caller, you’re probably recognizing there are many options available to business owners and all businesses are different.

Work with a 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 insurance package that not only works for you, but is affordable as well.

Gift Shop Insurance

Friday, November 25th, 2011

Owning and running any business like a gift shop can be intense and stressful. Don’t let your commercial gift shop insurance be stressful. Having a good commercial gift shop insurance policy in place will reduce stress and worry down the road. Spend your time creating new business and buying new products for your clients and not worrying about what ifs.

A good commercial gift shop policy should cover employees, buildings and equipment, loss of income, and general liability. Due to the nature of the work, a shut down or business interruption could be disastrous. Make sure a loss of income insurance is included.

A gift shop insurance policy needs to provide coverage for a variety of risks. There are a number of coverage options with varying limits and deductibles. Talk to your licensed insurance professional to review what is available. It may make sense to get product liability insurance as part of the package too.

In addition to these coverage options, your gift shop insurance should cover workers compensation, property, and general liability. Other specialty coverage that is available includes plate glass and signage for your retail shop. Many gift shops are located in coastal and resort areas. Ask your agent about specific types of disaster insurance like flood insurance.

The gift shop business is a complex business. Make sure you discuss the distinct aspects of your business with your licensed insurance professional so they can help you determine the appropriate coverage.