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Archive for May, 2012

How Can I Reduce My Commercial Insurance Costs?

Thursday, May 31st, 2012

Every business, whether an automotive shop, a chiropractor, a flower shop, or a physician, needs to have insurance on its business and property. Most business owners look to reduce costs, and they often ask, “How can I save money for my businesses while not giving anything up?”

The answer is, of course, complicated and requires individual analysis, but there are steps which any business owner can take in order to reduce their commercial insurance costs.

In recent years, general liability rates have been increasing, but that doesn’t stop a shrewd business owner from consulting with a knowledgeable licensed agent in order to find ways to save some money.

Step one is to ascertain whether or not you may be able to eliminate double coverage.

While we usually advise our clients to get the maximum coverage available, we also work to ensure that the client’s general liability coverage does not offer product liability coverage while the client is duplicating costs by carrying a separate policy for product liability coverage.

You should make it a point to monitor the employees who are driving company vehicles and ask your agent about any safe driving discounts. Sometimes, a single driver with a poor driving history can cause the rate to go up.

You can find out whether there multi-product or multi-policy discounts available and if you might be able to save on rates which are available to associations or organizations to which your company belongs.

It might also be possible to increase deductibles to reduce the premium.

As always, it is key to work with your licensed insurance professional, setting expectations of service which include an annual review, rather than just an annual renewal. And most importantly, make sure that you don’t just assume your rate is your rate. Don’t hesitate to ask questions, no matter how silly you think they are. It’s not an imposition on insurance professional; it’s why you pay them!

How Do I Insure My New Business?

Wednesday, May 30th, 2012

Insuring your new business isn’t hard with help.

Business insurance is different than your homeowner’s insurance in the way it is purchased and the protection offered. It is important to look at the coverage options available to your business. For most new businesses, it’s best to consider the basic coverage available to best protect your new business.

The basic types of coverage will be property insurance, casualty insurance, general liability and commercial vehicle insurance. Property and casualty insurance will protect the hard assets of the business like furnishings and equipment while liability insurance will protect against a claim made against the business. If you have employees when you start your business then you will need workers compensation insurance as well.

A good starting point to purchasing business insurance begins with planning. Consider what day to day risks the business and employees will be exposed to in the normal operation. What future risks may be involved and what other factors play in to determining what could happen as time passes. Check with your state department of insurance and look into any industry associations. Work with a licensed insurance professional experienced in business insurance.

Review your business plan with your licensed insurance professional. The more information you provide, the better coverage can be written. This will make it easier for your insurance agent to understand not only your present needs, but future insurance needs as well.

Once you get a quote, make sure you review it with the insurance agent. Don’t be afraid to get another quote, but make sure you understand the coverage proposed. Make it is an apples to apples comparison to make a good decision.  Make sure the agent is someone you can work with and is willing to work with you.

Once the policy is in place, set a review up with your agent in 6 months to determine any changes it may need. Don’t file it away and forget about it. Your insurance will change as your business grows. Early on, its important to keep in touch with your agent to review changes, products, and new employees or plans for the business.

Do Different Kinds of Businesses Need Different Business Insurances?

Monday, May 28th, 2012

You may have wondered whether the insurance an interior designer needs is the same as architect’s insurance, or if a doctor’s insurance needs are the same the same as a veterinarian’s.

It is essential for every business to have at least one liability policy, because a liability policy will cover injuries caused to a third party.

Depending on the business, the size, the assets, and corporate structure will determine the types of liability policy for that business.

A physician will carry malpractice insurance like an interior decorator or an architect, though the limits may well be different. The architect and interior decorator may carry errors and omissions insurance while the doctor office may not.  
 
Each business should carry a property and casualty policy to insure for losses against real or personal property. It makes sense to look at a business owner’s policy.

In every situation, a business owner, whether a medical professional, an an architect, or a janitorial service, should examine everything that is of value and put together your insurance quotes based on that information.

Naturally, you will want to consult a licensed insurance professional, and you would probably do well to seek input and guidance from your accountant, banker, trade association, and anyone else who has an understanding of your industry.

The Difference Between an Agent and a Broker

Sunday, May 27th, 2012

Now that you’ve gone into business for yourself, you’ve heard tell of insurance brokers and insurance agents. But you’re not clear on which one you should using.

An insurance agent is an insurance professional who represents an insurance company in the capacity of an intermediary. The agent may be captive, which means he represents a specific insurance company, or the agent may be an independent, meaning he represents more than one insurance company.

Suffice it to say that the agent’s responsibility to the client is administrative.

Insurance brokers work as independents who offer an array of products. A broker has a different kind of  license, and it usually requires a higher level of industry certifications and education than the licensing an agent must have

Usually, a broker’s standard of accountability to the customer is higher than the standard of an agent.

A broker has the duty to analyze and determine what scope of coverage your business needs. Further, a broker generally charges higher premiums and/or administrative fees in keeping with such an increased level of expertise.

Generally speaking, the larger your business, the more essential the knowledge and guidance of a broker becomes.

If you work in a high risk industry, or if you have a large number of employees, or vehicles, it makes good business sense to to use a broker rather than an agent.

If your business is small with few employees and a low risk or standard risk industry, an agent would work just fine for you.

As we always caution, you would be wise to amass  as much information as possible before you decide whether you need to go with a broker or an agent to make the best decision.

Printing Shop Business Insurance

Friday, May 25th, 2012

There is a lot more to the printing business that printing out wedding invitations or the company’s annual report. Its paper and product sourcing to creative, to mail drops and so much more like engraving, lithographing and supplying business forms. Having the right business in place is also important to protect the physical and financial assets of the company.

Like any business, your printing business needs to have general liability insurance, property insurance and if you have employees, worker’s compensation insurance. In addition, there are other coverage options and insurance which may be warranted. A good starting point would be to consider a business owner’s policy or BOP. These policies combine property insurance and general liability insurance into one policy with options for additional coverage and customization for your print shop.

It doesn’t matter whether your print shop works in digital, offset, or relief equipment, or a combination, you have a substantial investment in your equipment. Add the computers, phones and copiers and you can see why it’s important to have the appropriate property insurance coverage in place. Your property insurance covers damage from fire and other types of damage. In addition, you can add equipment breakdown and business interruption insurance to your business owner’s policy for more peace of mind.

Your general liability insurance will protect you in the event of a claim of personal injury or property damage at your location. You can discuss with your agent whether errors and omissions insurance should be added to your total insurance package.

Worker’s compensation coverage is bought separately and requirements vary by state. Check with your licensed insurance agent and your state department of insurance for the specific requirements in your location.

Once you have the coverage needs in place, your licensed agent can guide you in customizing a package that best fits your printing business.

Do I Need Product Liability for my Retail Shop?

Tuesday, May 22nd, 2012

We are often asked this question: Does my retail shop need Product Liability Insurance?

Those who own retail stores should indeed consider acquiring Product Liability Insurance.

Product Liability insurance is a life-saving necessity for any size business which distributes or sells products in the United States.

One of the important things that Product Liability insurance does is to protect retail businesses against claims which are made about the sale of goods, products, foods, or medicines which are sold at the retail level.

Sometimes, this coverage is built into a general liability policy for a business as products completed operations insurance.

Product liability insurance covers the retailer’s liability for injuries and other losses which are suffered as a result of a product sold. Those injuries may be suffered by a buyer, a user, or a bystander.

This type of insurance covers a product which malfunctions, or one which is defective, and in some cases, it also protects the retailer from failure to warn.

A real-life example of exactly how product liability insurance works is clear when we review the 2007 incident which involved tainted pet food which was manufactured and packaged in China. Once manufactured, the dog and cat foods were imported to Canada, after which the products were sold to customers.

Thousands of pets died, and thousands more were sickened, some suffering damage to kidneys which will last their lifetimes.

And then, the barrage of lawsuits began. The Chinese and Canadian companies were insulated from lawsuits, because even if judgments were levied, obtaining that restitution would have been impossible.

One example of how product liability insurance can easily save a business from financial disaster. One of the affected retail outlets — in this case, Wal-Mart — ended up facing the hundreds suits filed by unhappy cat owners.

Just one lawsuit like this against a mom-and-pop store could easily result in devastation for the business. It is imperative that you examine your general liability policy in order to determine if more coverage is needed to protect your retail store.

Umbrella Policies

Saturday, May 19th, 2012

A commercial umbrella policy, which is often called excess liability, may afford additional coverage to the smaller policies which are in place for your business.

Usually, those smaller policies may include any combination of your employer’s liability, general liability policy, and hired and non-owned motor vehicle policies.

If you have, say, a million dollar coverage, you may add an umbrella policy in order to maximize the protection of your business assets.

As a practical example, let’s suppose that a covered claim against you is awarded $1,500,000. If you Let’s also say that you have $1,000,000 in general liability coverage. In such a case, your umbrella policy will kick in the additional $500,000 to settle the claim, saving your business a lot of money and stress.

A commercial liability policy is one way to increase coverage of several policies while t the same time keeping your overall premiums down.

When considering how much coverage your business needs, several factors come into play as you figure out the appropriate excess liability coverage. Some of those factors include the kind of business you own, the assets of the business, and the coverages your business already has in place.

Generally speaking, standard coverages will take care of most situations that your business might find itself in, although in extreme situations, it’s important to protect the assets and the general well-being of your business.

You should also remember that a commercial umbrella or excess liability policy will not protect either errors and omissions or a professional liability policy.

Discuss with your licensed insurance professional an analysis of your current business coverage and whether a commercial umbrella policy could be the key to the salvation of your company in the event of a serious claim against your business.

Commercial Auto Insurance

Wednesday, May 16th, 2012

Commercial auto insurance needs to be specific to your business.

Most business owners know the risk involved with their product and service but often assume their auto coverage is sufficient.  Any vehicle owned or operated by the business may put the business at serious risk financially in the event of an accident caused by that vehicle or the operator.

Commercial auto insurance needs to be take out anytime the vehicle is titled to the business.  It doesn’t matter the size, make or even if it is used strictly for pleasure.  The business name on the title brings the business into a lawsuit in the event of an accident or personal injury.  Even if the car is used by the business owner’s spouse or family member exclusively, the titleholder (The business) is may be sued.  It’s important to review driving records of those who may be driving your vehicles.

Obviously, vehicle classification, motor size, use, must all be noted and will impact both premium and coverage.   Work with your insurance professional in determining the proper coverage and policy.  It may make sense to opt for fleet insurance for your business.

Make sure you work with your insurance professional on the liability limits covered by the policy.  Taking just state minimums again may expose your business to financial risk in the event of a lawsuit or judgment higher than the state minimum. We often see business owners assuming way to much risk in having minimum coverage in place. Work with your agent and perhaps your corporate attorney to review the coverage and potential for risk.  We often see business owners assuming way to much risk in having minimum coverage in place.

You insurance professional will review other coverage’s available for commercial auto insurance.  Comprehensive coverage, under insured motorist, medical payments and others may be available.  Together, design a policy and coverage that provides adequate protection and minimizes the exposure for your small business.  Don’t assume you have good coverage without having a conversation and review with your insurance professional.  Make sure to review this insurance annually, or when any changes occur, including adding or dropping a driver.

Required Insurance for Employees

Wednesday, May 9th, 2012

Am I required to provide any insurance for my employees?

It can be confusing to small business owners what is required in regards to insurance when hiring employees.  The only insurance required at the time of this writing for employees is workers compensation insurance in all but 5 states.  While standards vary somewhat, for the purpose of this article and protection of your business, when you hire an employee, it’s important to purchase workers compensation insurance and if your business is in Rhode Island, New York, New Jersey, Hawaii, or California, check on Disability requirements.  Your licensed insurance professional should help you sort through the specific requirements in your home state. In addition, check with your state department of insurance for the specific requirements in your location.  Remember, the ultimate responsibility rests with you as the owner of the business.  For discussion purposes, we are not including unemployment as a mandatory insurance.

The first thing we need to do is define what workers compensation is and how it works.

Workers compensation insurance will cover medical expenses and at least some partial wages if an employee is injured on the job.  This protects the employee from financial disaster from a job related injury.  In return, the employer is protected from being sued by that employee for the injury.  Obviously, this is a very generic overview and should be reviewed with a licensed insurance professional regarding your specific business.  Some states may require some type of disability insurance as well.  Your insurance professional and state department of insurance will guide you to the specific requirements of your state.

There are lots of other types of insurance and coverage options available for employees of a business. These employee insurance programs, or employee benefits, are at the discretion of the business.  When a business starts an employee benefit program, medical insurance is usually the cornerstone of the benefits package.  The health insurance benefit may include dental insurance and vision insurance as supplements to the health insurance.  Group life insurance and group disability coverage may also be offered.  Costs may be shared between employees and the business for these benefits.

In this day and business environment, a growing business may want to consider adding group insurance benefits.  While not required, a good benefits package will help in recruiting and retaining good employees for your business.  Your licensed insurance professional can work with you in determining the requirements of your state for workers compensation and also developing an employee insurance benefits program.

Veterinary Clinic Insurance

Wednesday, May 2nd, 2012

As a veterinarian, your chosen profession is truly a noble one.  Providing care and remedy to animals while providing direction, support, and comfort to their owners.  It’s important to provide direction, support, and protection for your clinic and its employees and owners as well through a good veterinary insurance plan.

Whether your practice consists of house pets, large animals, or a specialty clinic, you need to have the proper coverage in place.  It’s important to work with your licensed agent to customize a veterinary insurance package for your specific practice.

First, consider a business owner’s policy to combine your general liability coverage with your property insurance which is customizable.  Then, consider your veterinary malpractice insurance has the correct endorsements.  Let’s look at these three types of coverage  separately.

Your veterinary malpractice insurance or errors and omissions insurance will protect you and your staff should an animal die or contract an illness in your care and the owner brings a lawsuit against you.

Your veterinary malpractice insurance will cover legal fees, and any damages awarded up to the limit of the policy.  Certain other coverage may be specific to your practice and discussed with your licensed insurance agent.

You may also want to discuss whether a business liability umbrella policy should be considered should there be potential for large claims and damage awards.

The general liability coverage within your business owner’s policy will cover your clinic’s liability for damages and personal injury at your clinic.  For example, a pet owner slips on floor and is injured.

The property insurance portion of the business owner’s policy will insure the equipment and furnishing in the event of a disaster such as a fire.  In addition, business income insurance and equipment breakdown insurance can be added to the business owner’s policy for additional protection.  You may also want to consider adding coverage for valuable records and papers.

Your professional associations, the state department of insurance and your licensed insurance professional are available to help determine what coverage is needed for your veterinary clinic and practice specialty.  Take some time to determine the level and type of coverage needed for your peace of mind.