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.
California Assembly Bill 5 (also known as CA AB 5) was signed into law in September 2019, implementing a new test all employers must use to determine if a worker is an employee or an independent contractor under the California Labor Code. The law may impact who you cover under your workers’ compensation insurance policy.
While the bill is effective January 1, 2020, the part that affects workers’ compensation insurance coverage goes into effect July 1, 2020.
Know The Facts
- The new legislation is not based on policy effective date. As of July 1, 2020, as an employer, you’ll be subject to the new test. This means that a worker could be classified as an independent contractor before July 1, 2020 and as an employee after July 1, 2020.
- If you’ve employed an independent contractor that can supply you with a certificate of workers’ compensation insurance that is effective during your policy period, he/she would not be considered part of your employee roster. You would not report payroll for him/her.
- In order to avoid an unexpected change in exposures at time of audit, you must include payroll for all employees defined by the statute as of July 1, 2020.
- The statute applies to businesses headquartered in California AND businesses headquartered elsewhere with employees working in California.
Got questions? Contact me. I’m here to help you with this law change in any way possible.
A lot of businesses are shut down right now and suddenly there are many individuals who find themselves out of work. Premises’ that are typically bustling with business and commerce are at a standstill sitting vacant as we wait for this Coronavirus pandemic to pass.
I’m hoping this doesn’t become a trend but just this morning alone, I had two different retail clients call in to report claims burglary and theft overnight with the doors busted open as a point of entry. Luckily due to monitored alarm and surveillance cameras, the burglars didn’t seem to get away with much based on early indications.
This serves as a reminder to be vigilant with your business premises and your neighbors in the surrounding areas.
Here is a Burglary Prevention Checklist from The Hanover Insurance Group to help get your brain thinking about measures you can take to help prevent burglary and theft at your place of business. We have enough to deal with right now, so let’s try to eliminate additional perils like this if at all possible.
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.
You see it everywhere you go. It doesn’t matter what city, state, or country…..graffiti is EVERYWHERE. And it looks like crap and if it’s on the wall of your business or building! Not only does it look like crap, but graffiti contributes to reduced retail sales, a decline in property values, and citizen fear. Not what you want when it comes to running a thriving business. Or owning a successful commercial building.
A business littered with graffiti is less likely to be patronized. Citizens feel less safe and secure entering a storefront where graffiti is present.
Graffiti Prevention: Tips for Businesses
If you have any questions about the following:
- How can a business prevent graffiti?
- How might a “graffiti ordinance” affect a business?
- What should a business do if it’s hit with graffiti?
- How should graffiti be removed?
Then check out this Tips for businesses fact sheet
Hopefully with enough businesses on board to prevent graffiti, we don’t have to see it everywhere we go. Pure and simple, it looks like CRAP! More importantly, it contributes to reduced retail sales, declines in property values, and community fear.
What measures are you taking to prevent graffiti on the walls of your business or building?
Although many people view California as the most litigious state in the United States, it is actually the sixth most litigious, according to the Employment Opportunity Commission (EEOC).
Texas had more than 7,482 charges filed in 2018; followed by Florida with 6,617; then Georgia with 4,919; then Pennsylvania with 4,463; followed by Illinois with 4,444; and then California with 4,344.
Considering that California is the most populous state and has the most protections for employees, the number of complaints, just based on employee population, is a head-scratcher unless you believe that California employers are better at preserving employee rights or that population and employee rights are not good indicators of employment practices risk.
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.
Yesterday, the Small Business Administration (SBA) Office of Advocacy published a fact sheet by research economist Daniel Wilmoth that indicates more small businesses are opening than closing. In 2017, the number of businesses in the U.S. increased by about 118,000 with various levels of growth depending on the region. In all, 975,000 new businesses had opened by the end of 2017. The number of businesses that closed fell from 859,000 in 2016 to 857,000 in 2017. Business openings have exceeded business closings for 28 consecutive quarters, Wilmoth noted. California accounts for nearly one-third of the net increase of businesses in 2017, with 38,000.
Source: Long Beach Business Journal