Entries Tagged 'Commercial Insurance' ↓

Exercise more. Eat better. Learn something new. It must be New Year’s resolution time again. As 2016 approaches, it’s a good opportunity to make New Year’s insurance resolutions by reviewing your coverage and deciding if changes are needed. As you examine your policies, consider making these resolutions for next year:

Update home inventory: Is your home inventory up to date? What have you sold, donated, or pitched in the past year? What devices will the family splurge on this Christmas? An up-to-date home inventory is essential to make the most of your coverage in case of theft or disaster. Include all items and their cost. Store this list off-site or in the cloud.

Assess car policies: Does your vehicle coverage accurately reflect your car’s value? As autos age, you may want to reduce coverage. Who drives the car? Are primary and occasional drivers designated properly?

Check for savings: Are you currently taking advantage of every savings opportunity? A call to my office will be worthwhile. Check for new programs, multiline discounts, and changes in policy requirements; they may save you a few bucks in the coming year.

Life changes: Be sure to discuss with my office any life changes, such as marriage, divorce, death, or births as well as home purchases, renovations, job changes, and health concerns. These can impact your insurance needs and may affect everything from your homeowner and life insurance policies to health insurance. You may even need commercial insurance if you’re starting your own company in the New Year.

Increasing numbers of homeowners are considering turning a second home into an investment property by renting it out. If you’re thinking about this alternative, depending on the type of rental you’re considering, you may need landlord insurance.

If you are planning to rent all or part of your primary residence for a short time (a week or less), you may not need a landlord policy. Often your homeowners policy will cover this situation. However, check with your insurance advisor to see if any additional endorsements are required.

If you want to start a bed & breakfast in your primary residence, you are then considered a business and will need a business insurance policy.

But when you decide to make a second home into an investment property to rent to tenants over the long term, you have become a landlord, and you will need landlord insurance. The policy may be customized to suit your needs and will provide the additional protection you will need as a landlord.

Options typically include:

• Standard structure protection. The home, any other structures on the property, and any owned items on the premises, such as appliances, are covered.
• Liability. As a landlord, you will need greater liability coverage to protect against claims for injuries on the property.
• Fair rental value coverage. This option reimburses you in the event of a disaster where tenants can no longer live in the home and aren’t paying rent. Your loss of rental income is covered while the home is being repaired or rebuilt.
• Some companies offer extra coverage options such as lock replacement and emergency repair service.

Because landlord policies provide the higher coverage you need, they typically cost about 25% more than a standard homeowners policy. However, discounts such as multipolicy and new/renovated home discounts may be available. Contact my office for the option that’s best for you.

Legal firm Norton Rose Fulbright recently released the results of its 2015 Litigation Trends Annual Survey. The survey involved companies in 26 countries and over 800 corporate legal representatives. These results indicate the areas business owners may want to examine closely as part of a review of their current insurance coverage.

Of the U.S.-based businesses surveyed, 55% reported facing more than five lawsuits in the past year, while only 18% reported zero lawsuits. All surveyed were asked to choose the top three types of litigation their companies faced in the past year. Out of the 20-plus categories listed, these were contracts, labor/employment, and regulatory/investigations.

What does this mean for business owners? In addition to general liability insurance, which is a must, you may want to consider obtaining coverage that targets these high-litigation areas.

Depending on the specific needs of your business, some types of coverage may be more relevant than others. But here are some policies you may want to focus on in light of the top areas identified in the survey.

Contracts

Contract Litigation Insurance (CLI) offers an important type of protection: Are you aware that generally the losing party in a contract dispute is forced to pay the winning party’s attorney fees? These fees can range from thousands to millions of dollars, depending on the case. General Liability, Errors and Omissions, and other types of policies may cover your own legal costs but typically do not offer protection from paying the other side’s legal costs. CLI offers this coverage.

Labor/employment

Workers’ Compensation Insurance is required for any business owner with employees. It must provide strong coverage and reflect the needs of your business. But if your company is particularly concerned with the area of labor relations, you may also want to consider Employment Practices Liability Insurance, which will extend your protection to cover suits involving sexual harassment, hostile workplace claims, unfair employment practices, and discrimination. In addition, ensure that your company is following regulations for Unemployment Insurance and adhering to any specific regulations applicable to your type of workforce.

Regulatory/investigations

Leaders of a company facing litigation can themselves be charged for breaches such as failure to follow regulations, mismanagement, and operational failures. Other policies in place may cover the business, but individuals may not be protected from a lawsuit. If your business has concerns about regulatory/investigations litigation, Directors and Officers (D&O) Insurance may be a good safeguard. This offers coverage for individuals against claims made while they served as an officer or on the board.

In addition to these specialized policies, it is often necessary to simply increase your general coverage. A high-payout lawsuit could require funds beyond the limits of your general liability insurance. To protect yourself in these cases, you can add an umbrella policy. This business liability “umbrella” insurance will kick in when your general liability insurance limits are reached.

By remaining aware of trends in your industry, you can protect your business by having the proper policies in place for your commercial needs.

It’s hurricane season, but the next tropical storm is not the only water threat to your business. Flooding is frequently caused by snowmelt, rainstorms, inadequate drainage systems, and broken levees or dams. In fact, FEMA’s National Flood Insurance Program (NFIP) works on the assumption that everyone lives in a flood zone. The only question is whether it’s a low-, moderate-, or high-risk area. In fact, you’re not protected even if your building is built on a hill; although your company may be located in a low-risk area such as this, you still need flood insurance.

Depending on your mortgage program, many lenders require flood insurance. However, even if they don’t, insurance is still recommended and advisable to protect your business; roughly 20% of NFIP claims and 33% of disaster assistance for flooding involve areas considered at low or moderate risk.

So for the most part, you do need flood insurance. The good news is that low-risk-area businesses will pay less for coverage.

Flood insurance coverage is purchased through an insurance agent, and most insurance companies can obtain coverage through the NFIP, a federal program that offers set rates. The rate for your particular business will depend on factors such as the date of construction, building design, amount of coverage requested, and the area’s risk level.

Twenty-five percent of businesses that close after a flood event never reopen. Be one of the 75% that do. And don’t delay. A 30-day waiting period from the day of purchase is standard.

If you’re a business owner, you know research, planning, and asking questions are all necessary for you to manage every aspect of your business-from employee schedules to general operating procedures to taxes.

Admittedly, you need to spend your scarce time and resources on activities that are key to your business. So other things necessarily slip.

But one thing that should be-and often isn’t-a top priority is your commercial insurance coverage. You pay high insurance premiums to protect your company from risks.

Why not take the necessary time to ensure that your coverage is working for you? And while you’re at it, look for ways to potentially reduce the cost of commercial insurance premiums.

Here are six ideas that may reduce your commercial insurance costs.

Create and maintain safety routines

Workers compensation insurance is one of the largest commercial insurance products a business has and needs. To keep these costs down-whether by discounts or through being claim-free-you need to be vigilant about eliminating safety hazards. Create a safety plan and maintain it. Involve your employees in the plan, such as by setting up a rotation to inspect business grounds or buildings. When you find something wrong, fix it immediately.

Beef up your training programs

Most insurers will offer sizeable discounts for companies that implement training programs for their workers. This benefits everyone.

Keep your insurance up to date

At least once a year, examine your insurance to ensure that all your needs are being met, but also to be sure you aren’t paying for coverage that is no longer needed. If, for example, you’ve recently outsourced work previously done internally, you may no longer need coverage. Or the coverage should change.

Classify employees properly

If you have employees, you can save by ensuring that your employees are classified correctly. Premiums for workers compensation and liability insurance rates are partially determined by employee classifications. For example, you may have sales representatives who are still classified as production line workers. Talk to your agent to ensure that your classifications are correct and up to date.

Install security features

It’s not as expensive as it used to be to install security, and there are a plethora of options now. Since insurers usually give instant discounts to businesses that have installed security features, you may find that you can pay for part or all of the cost of installing security with the discount.

Talk to your agent about reducing premiums

This may sound obvious, but many people don’t feel comfortable telling their agent they want a better rate and, even worse, they don’t ask if there’s something they can do to reduce premiums. Most agents are happy to help. By talking about it with you, your agent might become aware of some aspect of your business that could result in savings and may also suggest ways to reduce premiums that you hadn’t thought of before.

Make it a point to review your policy at least once annually, and to speak to my office after the review. Remember: It never hurts to ask!

In business, as in life, it’s about knowing the right questions to ask. As a business owner, you may have concerns about your commercial insurance coverage. The following are four questions to ask your insurance agent about commercial insurance.

Why do I need it? You only have to think of the alternative. Even sole proprietors and independent contractors need commercial insurance coverage, as they are open to risk in any interaction they may have with individuals or other companies. No matter how small or large your company, your personal assets are at stake-which is why commercial insurance is so important.

What’s covered? Typically, you’ll have a commercial insurance “package” tailored to the needs of your business. It’s designed to protect you if your business is found legally liable for damage to another party. Coverages may include: Slander, libel, or misleading statements or advertising; property or physical damage; medical payment coverage; personal injuries that occurred on your business property or resulted from the use of your products; legal fees, including court fines/costs, settlements, and attorney fees; intellectual property claims or copyright infringement.

Who’s covered? This is dependent on your business type, and you can adjust it as your business grows. Typical policies will cover you, your corporation as an entity, co-owners and directors, and officers and shareholders.

Do I need specialized policies or policy addendums? Also dependent on business type, these may include: Workers compensation insurance, Product liability insurance, Key man insurance, commercial auto insurance, Cyber liability insurance.

Regardless of business type, size, or location, small businesses need insurance. In addition to insuring business assets, small-business owners are also protecting their personal assets and their reputation. As well, many states require small businesses to carry certain coverage, and for some businesses (such as building contractors), even customers may want proof of insurance coverage.

If you’ve previously passed on coverage because of the price, think again. You’re risking bigger costs if your business is found liable for a large loss.

My office can help you navigate the various coverage options available. But your first step is to decide what you want covered, what you need protection against, what losses and risks your customers face, and what risks or losses your employees face.

Small business insurance consists of three main components: liability insurance; coverage for property and buildings; and coverage for business equipment and other contents. The following are some types of available coverage:

Employer’s liability insurance:

Legally, businesses with more than one employee must carry this coverage. It provides protection for costs incurred (including damages and legal fees) if an employee becomes injured or ill as a result of his or her job.

Public liability insurance:

If your business regularly comes into contact with the public, this provides protection in the event that they or their property are injured or harmed in some way. This is essential if customers visit your business premises.

Professional indemnity insurance:

Mistakes causing financial harm to a customer or client can happen in a number of professions. Also known as errors and omissions (E&O) insurance, this covers claims or legal costs incurred if this transpires.

Key man insurance:

If an employee vital to your company’s success dies or is seriously injured and unable to work, key man insurance helps cover what the loss of this individual would cost your business. A coverage amount is decided before a policy is purchased by determining potential losses stemming from that employee’s absence (say your top salesman is injured). This may be hard to quantify, and the amount you’ve settled on may be insufficient, but at least there’s something there to compensate for the loss.

Business interruption insurance:

If a disaster causes you to shut your doors for an extended period of time, the losses could sink your business. This policy will allow you to return to original operation levels.

Commercial vehicle insurance:

If you or your employees drive company vehicles, this is required by law. The right coverage depends on the vehicles, and how often and how they’re used.

Insurance for property and buildings:

Business property damages and losses due to fire, lightning, riot, explosions, malicious damage, storms or floods, or vehicle damage is covered by most commercial policies.

Business contents insurance:

As seen, your property and building coverage for physical locations provides protection for buildings themselves-not their contents. This covers content losses inside your building and includes anything that would fall out if you turned it upside down.

Your building is protected from certain risks by property insurance; your employees, by workers’ compensation; and your vehicles, with commercial auto insurance. But what about risks associated with your business’s intellectual property (IP)?

Most business owners know protecting IP is crucial; one of the best ways to do so is with IP insurance. But how exactly does it work?

What is intellectual property? There are four types of IP (with definitions courtesy of Investopedia):

• Trademark: “A symbol, word, phrase, logo, or combination of these that legally distinguishes one company’s product from any others. Any infringement on a trademark is illegal and therefore grounds for the company owning the trademark to sue the infringing party.”
• Copyright: “The ownership of intellectual property by the item’s creator. Copyright law gives creators of original ideas, art, etc. the exclusive right to further develop them for a given amount of time, at which point the copyrighted item becomes public domain.”
• Patent: “A government license that gives the holder exclusive rights to a process, design or new invention for a designated period of time.”
• Trade secret: “Any practice or process of a company that is generally not known outside of the company.”

What does IP insurance cover? There are two types of coverage to help in the event of alleged IP infringement. One pays the costs of your legal defense if someone claims you stole their IP; the other, the cost of suing someone you believe has infringed upon or stolen your IP.

For businesses centered on ideas or inventions, IP insurance to protect them is essential. Typically, commercial general liability policies exclude IP coverage. Sometimes available as a policy provision, and commonly paired with Errors and Omissions (E&O) policies, there are also stand-alone IP insurance policies.

Who needs it? Any company whose core business is the development of new products should have IP coverage.

For larger businesses, IP insurance is essential because of turnover. Patents can easily expire without anyone noticing, typically after 20 years. IP protection through constant and proper IP designations (think © and ^TM) is a good preventive measure, but IP insurance functions like liability protection.

All companies should consider IP insurance to protect against claims, especially small businesses, since they are more vulnerable to the costs of legal defense expenses or judgments, where damages can run from $650,000 to $5 million.

Finally, all businesses face employee IP theft risks.

Do you need IP insurance if you’ve correctly registered IP and know your idea is original? If accused, you’ll need to prove ownership of your IP, and IP insurance can help fund the expenses to do that without unneeded and unjust financial strain.

How do I obtain coverage? You must know you haven’t infringed upon anyone else’s IP and be able to prove you’ve conducted an IP search and filed patents, copyrights, or trademarks. You also can’t have any claims or lawsuits filed against or by you.

Contact my office to help you navigate the issues around IP.

There are many risks involved in manufacturing and selling products. Whether you’re a small operation selling handmade soaps or candles, or a large company manufacturing auto parts, your business needs product liability insurance.

If you make, sell, or distribute a product, you are responsible for the safety of that product. If it ultimately is unsafe and someone is hurt, you could be held financially responsible, and even your personal assets could be at stake. Business size isn’t always the bottom line – even a small business growing, harvesting, and selling a crop at farmers’ markets could be liable for consumers’ injuries or illness resulting from its crop.

However, some businesses may not need as much coverage as others; it depends on the level of risk, and this usually is a function of the type of business or industry. Companies, such as those manufacturing medicine, medical equipment, toys, and sports equipment, for example, have a higher level of risk than jewelry manufacturers or tool suppliers.

It’s not just the manufacturer that is liable: Every business in a product’s supply chain can find itself liable for a defective or dangerous product. Many cases of liability have been attributed to a retailer, wholesaler, or middleman, providing they were proven negligent.

All these companies should consider product liability insurance, even if they don’t actually manufacture items directly. It just takes one recall or one lawsuit to close a company. Discuss the coverage you should have with my office. You may be glad you did!

In a virtual world, your commercial insurance policy can seem like just so much more boring paperwork. However, if you’re a business owner, get over it; it’s essential you read and completely understand your policy, however boring. To get you to that place, here are some common – and important – business insurance terms you need to know:

Actual Cash Value (ACV): This refers to the cost of replacing destroyed or damaged property with like or similar property. However, depreciation is taken into account, so whatever the insurer pays to replace the property will have deductions for depreciation. For example, a surround-sound system installed in your restaurant 10 years ago is destroyed in an electrical fire. Your insurance would pay an amount to replace it with a similar or like item, less any depreciation value to account for value lost over a decade. If you have high-value items such as electronics, artwork, or antiques, consider replacement cost coverage, which allows a higher claim payout, because it doesn’t deduct for depreciation.

Act of God: These are naturally occurring perils over which policyholders have no control, such as earthquakes, devastating windstorms, typhoons, or similar events.

Aggregate limit: An aggregate limit is the maximum amount you can receive for a specified period of time. For example, you may have an aggregate limit of $200,000 for one year, which would mean that regardless of how many separate claims you make, once your policy pays out that amount for the year, it won’t pay more. Some policies have general aggregate limits, meaning the total amount your insurer will ever pay, regardless of how many claims.

Exclusion: These are “named provisions” that specifically identify items that aren’t covered, including losses occurring from specified actions or issues.

All-Risk policy: This policy will pay for losses regardless of the reason the loss occurred. The term “special form” is sometimes used. Regardless of which term is used, be aware these policies may contain exclusions or sub limits.

Named Perils policy: The exact opposite of an “all-risk” policy, “named perils” specifically defines what causes of loss will be covered. Usually, these include vandalism, fire, or acts of nature. This policy provides coverage ONLY for events listed in the policy, and although it’s usually very affordable, it offers very limited coverage.

Valued policy: Also referred to as an “agreed amount” policy, this states that an event resulting in a complete and total loss will be covered up to a specific, pre-determined amount as stated in the policy.

Endorsements: These are provisions added to a policy that provide extra coverage, alter a policy in some way to account for special coverage needs, or define exclusions or inclusions. Often referred to as “riders”, they can be thought of as amendments to policies.

Real Property: This refers to things such as the land or items permanently affixed or attached to it: sheds, detached garages, permanent fixtures like fences, and sometimes heavy machinery and equipment.

Personal Property: Personal property is different from real property in that personal property is easy to relocate. If you turned your building upside down, anything that falls out is considered personal property, such as furniture, computers, and office equipment.