Thank you to Candy Messer from Affordable Bookkeeping and Payroll Services for interviewing me on the topic of “The Different Types of Insurance To Protect Your Business” Some of the key items we discussed are:
- Tailoring Insurance Coverage for each unique business
- Commercial General Liability Insurance
- Workers Compensation Insurance
- Errors & Omissions (Professional Liability) Insurance
- Do home based businesses need a business insurance policy?
- Is business insurance required by law?
- Insurance for contractual requirements and lease agreements
- Employment Practices Liability Insurance
- The difference between Commercial General Liability and Errors & Omissions Insurance
- Cyber Liability / Data Breach Insurance
- How much does business insurance cost?
- Ways you can keep your insurance costs down
- Negotiating premiums with Carrier underwriters
Check out our interview together here:
Thanks for watching
Several months ago, a client of mine lost their commercial building to a fire. A total loss. It was a really unfortunate situation.
There’s been a lot going on since then, but I’ll fast forward to the claims process today.
In speaking with the claims adjustor, my client was told he should feel really good about his policy coverage. That you “should be thankful that your broker put together a nice comprehensive policy for you” with all the bells and whistles.
My client called me to share the news of this conversation. In a time of difficulty, it was refreshing to hear such a strong statement from the carrier side.
As their agent/broker, this made me happy to hear. It’s NEVER fun when you get a call from a client sharing they sustained a property insurance loss. These are really technical policies with so many coverage types, endorsements, and exclusions that vary from carrier to carrier. In fact, I would argue that commercial property insurance is the most complicated line of insurance to deal with after sustaining a loss.
The thing is, you can’t just get a “Cadillac” policy for just any old subject of insurance. Whether it’s for Commercial Property, Liability, Workers Compensation, or any other form of insurance, the subject of insurance needs to be well maintained in order to get quality coverage from an insurance policy.
It’s like having good credit. When you do, you get better interest rates, better loans, better terms. You have banks lining up wanting to lend you money.
The same goes for insurance policies. You see, my insured’s commercial building was totally renovated within the past 10 years. Roof, plumbing, electrical, and heat were totally updated to modern standards. Carrier underwriters LOVE to see this. This allowed me as their agent/broker to build a quality policy that ultimately came through in a big way during my insured’s greatest time of need.
This doesn’t just apply to commercial property insurance either. Take Workers Compensation insurance for example. Your company has a sound safety program/culture with favorable claims/loss history. As a business owner, you conduct employee screenings, background checks, physicals, etc., etc. When all these details align, you will have carriers fighting to insure your business knowing you take the necessary measures to try to prevent claims from happening in the first place.
Or let’s talk about Commercial General Liability. You can get better terms and pricing if you have proper contracts in place with vendors and other interested parties. Sound quality assurance procedures for your products or operations. These things and so many more will help not only mitigate claims, but it’ll help swoon underwriters like you’re a contestant on The Bachelor (ABC).
The list goes on with all types of business insurance policies.
It’s then up to your insurance agent or broker to put together a quality policy to protect your business. This too is extremely important because, like all industries or professions, there are a lot of good insurance professionals out there but bad ones too.
At the end of the day, you have to give in order to receive it. You make sound business decisions and have proactive risk management procedures in place, you can get exceptional insurance coverage at a reasonable price. But if you don’t really care about the important details and don’t put much TLC into what you do, don’t expect the world from your insurance policy. You don’t give a crap? Well, you will only get crap in return.
As for my client who lost their building, the carrier has already paid out $180,000 of almost $500,000 in losses. They have superior coverage because they have a superior broker of course ;). But more importantly, superior coverage because they had a superior building which was well maintained with love. In return, this allowed me to build the “Cadillac” insurance policy that will ultimately keep their asset protected and give rest at night knowing they will be made whole again by the carrier in response to this unfortunate loss.
With more businesses set to slowly open their doors again, I’m certain that insurance carriers are going to start adding this Communicable Disease Exclusion onto Commercial General Liability insurance policies at renewal. I’ve reviewed various policies of my insured’s to see if this exclusion is tucked away in any current policies and I am not seeing much of it at this time, but I bet it’s coming. Here’s the policy form/exclusion I’m referencing:
It’ll be interesting to see how insurance carriers respond. Will they potentially remove it for an additional premium, or if it’ll be straight non-negotiable?
My suggestion is to keep your eyes open on your general liability policy to see if this is added at renewal and what the potential repercussions are for your business.
I think in due time, new regulations will be put in place within the insurance industry to address communicable diseases, but I feel this is critical to look at now from a Risk Management standpoint.
Two Things You Can Do Today to Lower Your Business Insurance Premiums to Weather the Coronavirus Storm
Last week was tough. Call after call, I spoke with business owners and others in management roles who are feeling scared and anxious right now for obvious reasons. Due to the effects of the Coronavirus, they’ve already had to either lay off staff or furlough their hours to save on operational costs.
Some were calling to inquire about canceling their insurance coverage entirely until we get through this storm. My advice has been that we might not need to go down that road right now.
Before taking such drastic matters, here are two things you can do today to lower your insurance premiums without sacrificing or eliminating your current coverage:
- Review your estimated annual sales with your commercial insurance agent/broker and make adjustments to your liability insurance policies. Liability insurance premium is typically rated in accordance with gross annual sales/revenues, subject to audit at the end of the policy term. Rather than wait for the audit at the end of your current policy term, adjust your policy now to get the premium down which will help save on your monthly costs.
- For your Workers Compensation insurance policy, review your estimated annual payrolls and make any adjustments now rather than wait for the annual audit or canceling the policy altogether. If you’re at a standstill and do not have any payroll, or very minimal payroll, make the adjustment now.
Insurance carriers are making billing accommodations and extending grace periods for cancellations by as many as 60 days. Call your insurance carrier billing departments right away and explain your situation. Do not wait. They’ll most certainly make accommodations based on the current state of affairs.
Times are challenging for the entire world right now, but I believe we’ll get through this just as fast as we were thrown into it. Although insurance premiums aren’t the only operational cost for a business, they are one that we can control now by taking these types of measures. By doing this and maintaining your coverage, you won’t have to go through the process of re-applying for insurance once things are back to “normal.”
This too shall pass.
I hope you’ll catch my radio interview hosted by Candy Messer of Affordable Bookkeeping & Payroll. We discuss all things Business Insurance and Risk Management. From General Liability for a home based business to Cyber Liability and Employment Practices Liability for small to middle market companies. You can catch our interview HERE. Also, link included below.
Topics include: General Liability Insurance, Errors & Omissions Insurance, Cyber Liability Insurance, Businssowners Insurance policies, Employment Practices Liability, Workers Compensation, Risk Management.
Accountants, CPA’s, Bookkeepers, Tax Preparers, and other financial services professionals work with a lot of sensitive, personal financial information which can expose them to high levels of risk. And that’s in addition to the every day risks they face – like damage to their place of business or business-related records, etc.
The Hartford is a great insurance carrier for Accountants, CPA’s & Bookkeepers and other financial professionals. They offer a product which bundles General Liability, Professional Liability (Errors & Omissions), Data Breach, Property, and Business Income into a single package policy at a really reasonable price.
Whether you’re a sole practitioner, or partner at a large accounting firm, you should consider The Hartford for your business insurance if you don’t have a policy with them already.
Contact me if you would like to see what The Hartford can offer. I am an appointed broker who can help you out with a quote for this.
I’m working on an insurance policy renewal for a Technology, Computer & IT Services based small business. This is for their Professional Liability / Errors & Omissions insurance coverage.
The insured wants to know the advantages of keeping this E&O insurance policy and the coverage differences compared to General Liability insurance.
Here’s a nice two-minute explanation from The Hartford to address this exact question:
If you ask me, all Technology, Computer and/or IT Services based businesses should carry both professional liability (E&O) and General Liability to protect their risk exposures, without question.
Your clients can sue you for a wrongful act in providing professional services, which can be the result of an act, error or omission; very often, it is not the result of a mistake, but rather displeasure with the outcome, and even frivolous lawsuits will incur defense costs
The best part is that both coverages can often be packaged into a single policy together.
Uber and Lyft passengers can now buy insurance before their rides to cover any accidents or even death. Chubb, one of the world’s biggest property-casualty insurers, is joining ranks with startup Sure to sell policies on an “on-demand, per-day basis,” to cover accidents or death. The initiative will be called RideSafe and will pay up to $10,000 in medical costs per accident and include a $100,000 death benefit. Eventually, RideSafe plans to offer insurance for autonomous vehicle rides.
Right now there are industry-wide challenges with increasing loss costs in commercial and personal auto insurance, particularly in California. If you have a commercial auto insurance policy for your business, you’re probably seeing your premiums increase. If not, you can expect to. I’ve been seeing it with pretty much all major insurance carriers on the market. We’ve been having to shop coverage for clients like crazy due to the steep premium increases.
California Commercial Auto – What’s Driving Losses?
More traffic: Total miles driven increased 50 percent faster in California than in the rest of the country since the start of 2015. More vehicles = higher frequency of accidents.
Distracted drivers: One-quarter of crashes involve drivers talking on phones or texting.
Escalating medical costs: Medical care costs are climbing more than 1.5 times faster than other costs.
More fatalities and other severe accidents: Accident rates per person and per mile
of driving are rising in California.
Inexperienced or undesirable drivers: A shortage of skilled commercial drivers with good driving records = greater odds for accidents.
Rising auto repair costs: Record U.S. auto sales mean garages are often servicing newer cars with more expensive parts. Even minor repairs can cost big bucks.
What you can do to help ease your commercial auto insurance loss costs?
- Implement a fleet safety program and follow proper fleet maintenance procedures.
- Enforce company policy for use of company vehicles (e.g., limitation on personal use, who can use company vehicles, hours of operation, etc.).
- Regularly check employees’ driving records and take appropriate action driving records are not acceptable.
- Use telematic devices to monitor employee driving habits and usage of company vehicles.
- Be aware of the risks involved with employees using their personal vehicles on the job.
- Provide Driver Safety Training for their employees. Important topics include, but are not limited to: Distracted Driving; Speeding; DUI; Need for Rest; What to do if your vehicle breaks down, etc.
Need help with these things? Contact me today. Buying a commercial auto policy is one thing, but implementing these risk management procedures along with the policy can help your business tremendously with costs.
Yes, you read that title correctly. A Los Angeles man is suing Krispy Kreme doughnuts claiming they misled the public by naming its doughnuts in a way that led people to believe they contained vitamin-rich fruits, despite them being completely fruit-free.
Read more HERE
If you’re wondering what this has to do with anything, my point is that there are nut jobs all over the world like this who are sue happy and looking for a little extra money, even through a settlement. It’s imperative as a business that you carry commercial general liability insurance with product liability included. By carrying a policy for this, you have defense coverage under the policy to protect your business from even the frivolous claims.
Even though a judge could potentially throw this case out the window, there’s going to be legal fees that need to be paid no matter what. And the headache of dealing with this. Leave it to a commercial general liability policy to handle this for you so you can focus on the important things in running a business. Don’t think that only happens to the big guys like Krispy Kreme either. This can happen to ANY business, especially in litigious Southern California.