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Archive for the ‘About’ Category

Group Health Insurance

Friday, October 26th, 2012

One of the benefits of working for a company is group health insurance. Such insurance is purchased by an employer and offered to the employees. Frequently, this group health coverage is also offered to immediate family members of the employee.

The employer usually pays a significant portion of the premium for its employees coverage in the group health plan, and the employee then pays the difference, generally as an automatic deduction from the employee’s paycheck.

Group health insurance policies and coverage vary from state to state because the insurance industry is regulated by the individual state.

Laws about how coverage can be issued to large groups are different than laws regarding the same coverage for small groups, and the way that premium rates are determined is also different. The requirements for sole proprietors purchasing health insurance coverage also vary on a state-by-state basis.

As of right now, businesses are not required to offer group health insurance. Individual insurance companies apply their own set of underwriting rules based on the number of employees and other factors. State and federal laws apply to varying degrees. These are based on factors including the number of employees, the type of business and whether an insurance company is providing the coverage.

One benefit of the group health insurance is the requirement known as guaranteed issue.  The federal HIPAA law mandates that no matter what pre-existing health conditions small employer group members may have, no small employer or an individual employee can be turned down by an insurance company for group coverage.  Some states and policies may have an exclusionary period for coverage of a pre-existing condition of generally six to twelve months.

In the majority of states, the law allows small group health insurance companies the leeway to determine their initial premium rates for each company using a process known as medical underwriting.

The remaining states make small group health insurance companies use processes known as community rating or modified community rating to come up with initial rates.  Additionally, coverage options and variables will also be a factor in determining the cost for the group health insurance policy.

You would do well to check with your state department of insurance for specifics in your area.

What Will My Business Insurance Deductible Be?

Tuesday, December 27th, 2011

How should I figure what my business insurance deductible will be?

The deductible, the amount not covered or paid by your insurance policy must be seriously considered when purchasing business insurance.  Your insurance carrier will cover almost all of a covered loss, saving your business from a large, sometimes crippling cash outlay.

Say a covered claim is $20,000 and your deductible is $2,500, then the insurance company pays $17,500 and your business is required to pay the remaining $2,500.  No matter if 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.  It’s important to understand the impact of the deductible on the business cash flow.  Deductibles can usually be negotiated or have a tier system to choose from depending on the coverage.

The higher the deductible, the lower the premium cost and vice versa for the policy being issued.  As an example, with a $1,000 deductible, the premium is $1,850 a year, but with a $2,500 deductible, it drops to $1,060 a year.

Determine the risk and exposure for each policy type your business has in place or may need to add.  Depending on the risk, and the type of insurance, it may make sense to pay a lower premium and a higher deductible for your business.  While this would certainly be a good thing for cash flow, some risk may be high enough to justify the lower deductible and higher premium.  Look at the risk and make sure a claim wouldn’t jeopardize the financial solvency of the business. Work with your insurance professional to maximize coverage while making the premiums affordable.

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.  (Remember to look at the type of coverage, replacement cost vs. cash value as well)

Work with your licensed insurance professional in determining the best business insurance package and coverage for your business.  Together you should develop what deductible and premiums will work best to insure your risk.

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.

Terrorism Insurance

Friday, September 9th, 2011

As we approach the 10th anniversary of the 9/11 attacks many reflections have surfaced.  We can all remember where we were and what we were doing then, but I have to ask myself, “Has it really made a difference in how we do business?”  The immediate answer is to those who travel, yes.  At that time, my job required me to travel by air 2-3 weeks out of a month.  I had to make many changes regarding how I packed and my arrival time at airports.  Most importantly, I made a change to my life insurance which I had not thought about in a very long time.  I do not travel anymore so now I am wondering about the rest of us who only travel from work to home, then back again only to repeat it all over the next day.  I am asking what changes have been made in how 9/11 has affected most business coverage.  For the most part, little thought to terrorism is given when selecting insurance coverage.

 

Terrorism coverage is offered by most insurance companies, if not all.  However, very few business owners have selected any amount and much less, even adequate amounts.  Most small business owners believe they are not at risk of terrorist attack.  Yet many businesses suffered a major loss even though miles from The World Trade Center.  Homeland Security consistently reminds us the threats are increasing.  Because I was in Oklahoma at the time of the 1995 bombing, I am acutely aware how vast the damage can be and how devastating months a business can not longer operate due to ordinances and property damage.  Threats of terrorism may come in many forms.  If you have questions about your insurance, please contact 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.

Classification of General Liability Insurance

Wednesday, September 7th, 2011

In this economy many businesses add new products and services to their existing accounts.  Most are not thinking about their insurance when doing so.  However, it should be one of the top priorities when making changes to their existing operations.  When an agent works with a client, we are asking questions regarding the business operations.  We are looking for everything that pertains to the operation for the purpose of classifying the risk properly to determine proper premium.  When the risks change within the operations, premium needs to be determined also to cover claims which may arise out of those risks.

 

Agents and companies understand there must be changes within and operation due to economy, market and needs.  Classification is one of the necessary changes within an operation for insurance coverage to apply.  New forms of the Commercial General Liability may or may not apply to operations of which we have no knowledge.  Therefore it is imperative to keep your agent and company informed.  If you have questions regarding your policy, 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

Contractor Bonds

Tuesday, September 6th, 2011

Contractors bidding on government or municipalities in particular, are required to put up a surety bond.  While there are many types of bonds, the most common is the bid bond and performance bond.  These are purchased through companies to guarantee the type of contracting work to be done which most often requested is to complete the work on time.

 

While there have been fewer bond companies willing to issue these bonds, there are still some willing to take on new clients.  The underwriting is extensive and somewhat financially invasive due to the requirements.  Yet the company is looking at the contractor’s ability to complete the work to specification requirements, contractor’s financial ability, and past actions.  Sometimes there are credits to be considered when acquiring a rating for a bond.  If you have questions regarding bonds, please contact 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.

 

Floater Policies For Contractors

Monday, September 5th, 2011

Most contractors understand the need for a “floater” policy often referred to as inland marine for their equipment.  This is coverage for equipment to and from worksite as well as upon worksite.  Specific perils are generally named for this coverage, but some may elect an “open peril” policy.  However, many do not consider hired and non-owned equipment when purchasing this policy.

 

Many times a contractor will lease or borrow equipment to do small portions of a job when owning it does not make sense.  If the contractor or sub-contractor causes damage to the borrowed or non-owned piece of equipment they may become legally liable for that damage.  Under the inland marine policy, this equipment may or may not be covered depending on the wording within the policy and whether the agent was advised beforehand.  If you have questions regarding your business, 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.

Distracted Driving On Company Business

Sunday, September 4th, 2011

Labor Day is celebrated tomorrow and many people will be returning home from the 3 day weekend.  As it approaches, I am reminded the number one cause of fatalities in the workplace comes from automobile accidents.  The majority of those accidents have been determined as being caused by distracted driving.  Some states have passed laws regarding texting while driving.  A few states have actually made it illegal to use cell phones or other electronics while driving.  However, these are not the only cause contributing to an accident.  Other causes are eating, drinking, grooming, using GPS devices, checking email and surfing the internet.

 

Public and private companies often have employees drive upon their behalf.  Each should be aware if their insurance policy not only covers the business while an employee is driving but should implement a distracted policy of their own.  Educating and following up with employees is essential to risk management.  Distracted driving has always been an exposure, but with new technology it is greater than ever.  If you have questions about your insurance coverage, 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.

Insurance For Events

Wednesday, August 31st, 2011

As we approach September, I am reminded of the Oklahoma State Fair.  It has been held in September as long as I can remember, and it has always rained during the fair’s time here.  This year we have suffered a horrible drought and heat wave, so I will not be complaining.  However, it does make me think about all the other events held throughout the year and what Event Insurance policies have been purchased.  There is an unwritten rule that where large numbers of people are gathered, there is always risk of bodily injury or property damage.  Risks are many times not fault of the event’s organizer but of weather.  An example of this is the recent tragedy of a stage collapsing in Indiana due to high wind.

 

But there are other types of exposures to be considered.  Event coordinators or even the venue itself becomes legally liable alone due to contractual language of a signed lease.  Also these events may suffer a monetary loss due to cancellation of the planned event.   Purchases for weather insurance, or other unforeseen risk such as fire and earthquake rendering the venue unusable may be made.  Other exposures may include liquor liability, rides, and petting zoos for which an insurance policy may be purchased.  If you are planning an event, talk with your insurance agent regarding possible exposures or one of ours to be assured of obtaining proper coverage.

 

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.

Directors & Officers Or Public Official Liability

Tuesday, August 30th, 2011

Most public and private officers and directors policies are written as a D&O policy.  But there is another to be considered.  It is the POL or public official liability.  This policy is usually written for municipalities, it can also be written for other governmental agencies.  It may be used for many public organizations as long as the organization can be considered “an entity”.  Both policies cover wrongful conduct, but wording within the policies may differ greatly. 

 

The definitions of “wrongful conduct” are specifically named within the D&O policy, but not so in the POL.  Also the reference within the policies to “any act” or “negligent act” is to be of a major consideration.  As a general rule, the more restrictive definition, the smaller the premium which also equates to more constrictive claim payments.  The reverse is also true.  The broader definition within a policy, the more premium will be paid, to equal larger claim payments.  If you have questions regarding your coverage need, 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.