Most business owners would agree that it’s important to maintain insurance to protect business assets. But, many business owners do not know that they will not be able to contract with other companies (landlord’s, vendors, large customers, etc.) without certain insurance coverage.
When they think about insurance, business owners generally consider protection against hazards such as fire, flood or theft at their company sites. This is obviously an important protection to have. However, there are other types of hazards that may not be quite as high on the list, but protection could be every bit as important to offset significant financial losses. Here are five examples that underscore the need for comprehensive business insurance protection:
Company vehicle contents
If you operate a business with employees on the road making service calls to customers, chances are there is valuable equipment contained in the company vehicles. But a typical auto insurance policy would probably not cover the contents of a company vehicle if that valuable equipment is lost or stolen.
Tenant property improvement insurance
Do you rent space to conduct your business? Have you built out the interior of your space or made improvements to accommodate your business needs? If so, you probably made a considerable investment in the improvements. But many property insurance policies don’t include the value of the improvements made by a tenant to the existing structure. If you’ve invested in improvements, it’s worth taking a look at securing coverage to protect it.
Home-based business equipment
More and more people are working at home at least part of the time, even if they maintain an office or site elsewhere. Most don’t have insurance on the business equipment they keep at home; many assume their homeowner’s insurance would cover it. However, homeowner’s insurance generally does not cover business equipment. If you have expensive business equipment at home, you may want to consider purchasing additional protection.
Business interruption insurance
Remember the series of hurricanes that hit Florida? The wild fires that damaged cities and towns in California? The flooding that disrupted life in the Midwest? In addition to the effect that disasters have on individuals, they can bring businesses to a standstill for weeks or even months. Business interruption insurance can provide a way to get back on your feet.
Key person insurance
In many companies, the knowledge and skills of a single person or a top few are absolutely essential to the enterprise’s success. Key person insurance can help a company recover if an essential employee dies or becomes disabled for a lengthy time. The coverage can provide needed funds that allow the company to continue operating during a search for a successor or until the key employee returns.
As you can see, there are many hazards businesses face that aren’t covered under a typical insurance policy. However, you can get extra protection with the types of coverage outlined here. Since you invest so much time, money and effort into your business, it pays to make sure you have the protection you need. Call us for a consultation today!
Umbrella insurance protects insureds from financial devastation. It’s a common policy homeowners purchase because it protects their home and other assets when an insurance claim exceeds existing homeowners or auto insurance policy limits. However, it could be a smart investment for renters, too.
It Supplements Existing Liability Protection
Typically, basic liability protection only includes $100,000 in coverage. An umbrella policy can offer $1 million or more in additional coverage. Both types of coverage offer financial protection and peace of mind.
For $1 million in liability protection, renters could pay as little as $300 a year. Claude Lilly, Clemson University College of Business and Behavioral Science dean, also reminds renters that an addition million may only cost $100 more. This inexpensive investment protects a renter’s possessions, auto and other assets as it gives the insured peace of mind.
It Complements Exposures
The hobbies a renter enjoys can make an umbrella policy a necessity. For instance, the renter’s dog bites a contractor or guest, resulting in thousands of dollars in medical expenses and an expensive lawsuit. The umbrella coverage kicks in after the basic renter’s insurance policy funds are exhausted, and it provides the financial protection the renter needs.
Likewise, owning a swimming pool, hunting as a hobby or playing golf can each be fun activities, but they also have the potential to turn into expensive lawsuits. Renters should invest in an umbrella policy that covers expenses associated with a claim or liability related to the exposures they enjoy.
Consider Net Worth
Each renter can decide how much umbrella insurance to purchase. Overall, the renter’s current assets and net worth determine the basic coverage amount.
Buy Based on Future Earnings
A renter who’s found liable for an auto accident could face wage garnishment. Purchasing an umbrella policy that takes future earnings into account ensures the renter is adequately covered and can pay the judgment without losing his or her home and other assets.
Remember Slander, Libel and Invasion of Privacy Protection
Umbrella coverage does more than protect financial assets after an accident or lawsuit. It also protects renters who are victims of slander, libel or privacy invasion. The protection an umbrella policy offers against these challenges makes it a wise investment.
Overall, umbrella insurance provides beneficial coverage for every consumer, including renters. An insurance agent can offer additional counsel and advice regarding how much umbrella insurance to purchase.
You own your home, have your own business, and drive a new car. Though you are not rich, you are comfortable. It will be a shame to lose it all if someone sustains injuries by your car or at your home or place of business.
You have insurance you say; you have standard auto liability insurance. The limits are $100,000 for a single person and a total of $300,000 for multiple people. Suppose you are responsible for any accident involving a shuttle taking ten people to the airport. Three hundred thousand dollars allows on average $10,000 per person. That is hardly enough to cover the emergency room fees let alone any surgery, rehabilitation, lost wages and other medical expenses. If there is a fatality, you may consider bankruptcy.
Your business has a small storefront on a busy street. A middle-aged executive comes into your place of business following a rainstorm. Your floor is wet and slippery, and the executive slips and falls. He strikes his head, loses consciousness, and goes into a coma. Your general business liability insurance has the same limit as your auto insurance – $100,000. It may cover part of the hospital bill, but the official says he is permanently disabled and sues you for future wages for $1 million. Since your business is a sole proprietorship, bankruptcy beckons.
Your son invites a friend over for a swim in your pool. He dives into the shallow end strikes his head and suffers traumatic brain injury. Sadly, the damage is permanent — with standard liability limits of $100,000 — well, you know, bankruptcy stares you in the face.
The inexpensive, elegant solution to the problem is umbrella insurance. When a claim exceeds your standard liability insurance limits, your umbrella insurance policy takes over and pays up to your umbrella liability limits. Most people who buy umbrella insurance extend their liability limits to $5 million.
Though you hope never to use it, for a few hundred dollars per year, you can protect your assets, and avoid financial disaster. Umbrella insurance pays when you are responsible for an injury that exceeds your standard liability limits.
If you’ve ever shopped around for insurance, you’ve likely been asked if you want to bundle your policies—in other words, combine your home or renters, auto and life insurance policies with the same carrier. Although you have the option to shop around individually for each policy, it almost always makes sense to have the same carrier cover as many of your policies as possible.
Benefits of Bundling
- The discount—Most policyholders bundle their policies because of the promise of a discount. The amount varies by provider but can generally range between 5-25 percent.
- The option of a single deductible—With bundled policies, your deductible may be cheaper in the event of a claim that affects multiple policies. For example, if your home and auto policies are with two separate carriers, and a hailstorm damages your home and your car, you’re responsible for paying both your home and auto deductibles before receiving payment. But if you bundle your policies, your provider may offer you the option to pay only the higher of the two deductibles.
- Less chance of being dropped—If you’ve made claims or gotten tickets, having your policies bundled with one provider can decrease the chance of them dropping you.
When it Doesn’t Pay to Bundle
It isn’t always better to bundle your policies with one insurance carrier. Here’s when it may be better to split them up:
- If you have tickets or past claims that make your auto insurance expensive—In this case, it may be cheaper overall to buy each policy from separate providers.
- When premiums increase—Bundling discourages people from price shopping, which makes it easier for providers to increase their rates. Most assume that you won’t go through the effort of shopping around when your policies renew.
- If policies aren’t technically bundled—Some carriers may insure you with an affiliated company. Although you may get a discount with that company, you’ll lose the convenience of paying your premium with one familiar provider.
A Few Tips to Consider
Although discounts are the main reason people bundle their insurance policies, never assume that bundling is the cheapest option. Your needs and circumstances will dictate whether you should combine your policies with one carrier. Consider the following tips:
- Shop for new coverage when your policies renew, and ask for the price of the individual premiums as well as the price of the bundled premium so you can decide whether it is worth it. Just make sure you compare the same coverage when shopping for quotes from each carrier.
- Ask if the provider uses a third-party insurance company. Remember that you may save money but lose the convenience of dealing with one provider and a combined bill.
- Ask an independent insurance agent to get prices from multiple companies so you don’t have to do the legwork. An agent that is loyal to a particular carrier may be able to offer discounts that you can’t get alone.
With multiple factors contributing to the price of your insurance premiums, it is important to shop around in order to get the best rate for your insurance needs. Feel free to contact Scurich Insurance to determine if bundling is right for you and help you take advantage of all available discounts.
Every business goes through different cycles of profit and loss. This means that your risks and potential exposures are being affected similarly. At the same time, Commercial insurance coverage is also evolving and changing. Nothing in either your business or the insurance industry remains static. This is why you should re-evaluate your insurance coverage at least once a year. A regular insurance audit will help you plug any coverage holes that might impact your bottom-line severely should an unexpected loss occur.
Ask yourself: How much risk are we prepared to accept for our business? Essentially, anything that you are not prepared to take on needs to be covered by suitable insurance coverage. To measure the amount of risk in evaluating the insurance needs of your company, there are a number of key areas you need to examine — in conjunction with one of our knowledgeable insurance agents. The primary areas you should re-evaluate annually are:
General Liability. How much liability protection does your company currently require? The amount of coverage you had purchased previously was probably adequate at the time, but remember: Your business has changed since then and so has your liability exposure. What was suitable for your needs last year might no longer be sufficient if your company has grown and expanded. The larger your growth, the more you become exposed to potential, increased, and significant liability.
Property Insurance. Business property evaluations go up and down as commercial real estate values fluctuate. You could now be paying too little or too much for the necessary coverage. The same applies to your equipment, machinery, and your inventory. Adding or subtracting in these three areas, while factoring in appreciation or depreciation, can affect not only the premiums you pay, but also your overall Property insurance coverage in the event of a significant loss, such as a fire or natural disaster.
Workers Compensation. The premium you pay is largely dependent on the roles of each and every employee — from the shop floor to your managerial staff. If the roles of your personnel have changed relative to how your business has grown, shrunk, or evolved, then you need to re-evaluate these changes relative to the premium rate you pay for each worker. The premium cost changes and/or differences can be substantial.
Business Interruption Insurance. You might have enough insurance to get your business re-built and your equipment replaced in the event of a disaster, but did you also factor in your business operating expenses? Many companies neglect that part of the equation and fail to develop a disaster recovery plan. Even if your company has a plan, what about the vendors that are key to the survival of your business? Your own business might be fine, but in some other part of the state or country, a key manufacturer or supplier could get nailed. Did you know that you could extend your coverage to cover this circumstance, too?
Insurance Protection of Executives. The size of your company doesn’t matter. If you have employees, you can face claims for sexual harassment or wrongful dismissal. You might not have considered the need to purchase Employment Practices Liability insurance before, but if your company has grown, that expansion has increased your risk to potential claims. Similarly, if you sponsor a 401(k) plan for your employees, and its performance has not met expectations or an employee feels the investment was mismanaged, do you have adequate Directors & Officers Liability to handle such claims?
Summary. To safeguard your business from potential risk, an annual insurance audit is a must. You might discover that changes in your business might have exposed you to new risks. Likewise, insurance premiums are a significant expense, and you might find that you are paying too much or covering exposures that are no longer relevant.
Your commercial insurance policies protect your business, making your insurance agent an essential resource for your company. While you may not have your agent on speed dial, you will want to contact him or her in several circumstances.
Verify Coverage Details
You can purchase a variety of different policies for your business, and need to understand your exact coverage. Contact your insurance agent to verify which types of coverage you have and your policy limits.
Update Your Policy
When you add a vehicle to your commercial fleet, sell a piece of equipment, move to a new location, or make other changes to your business operations, call your insurance agent. These updates could affect your insurance needs, policy and premium.
File A Claim
If you need to file an insurance claim, contact your agent immediately. You may call the agent’s office, send an email or text, or fill out an online claim form on the company’s website. Remember to submit pictures, too, as you get your claim process started.
Ask Questions About a Claim
After you file an insurance claim, you may have questions about the adjuster’s findings or the settlement timeline. Feel free to contact your agent and ask any questions you may have.
Discuss Your Bill
Whether you pay your insurance bill annually, semi-annually or quarterly, you may inspect your bill and realize that you have questions about one of the charges or fees. Most insurance agents remain transparent about billing, and they can explain anything you don’t understand about your insurance charges, fees or payment date.
Pay Your Bill
If you experience any issues when you pay your insurance bill, call your agent. You may also ask for a change in the policy due date or a change in payment frequency.
Initiate an Annual Review
You should receive a notice a few weeks before your commercial insurance policy’s renewal date. Ask your agent for a meeting to renew your coverage. During this meeting, discuss details about your business and the types of insurance you need, including coverage limits and cost, as you verify that you have the right insurance for your needs.
Request a New Quote
Based on your insurance policies you purchase and your loyalty to your commercial insurance company, you may qualify for discounts or a more competitive rate. Your agent can rework your coverage limits, check for discounts and give you a new quote that meets your budget.
Throughout the year, you may wish to contact your commercial insurance agent for several reasons. Always feel free to reach out and discuss your needs as you purchase the right coverage for your business.