Kamis, 13 September 2012
Properties (physical assets) make up for the most part of the capital of a business. Any damage caused to these assets can incur huge losses to a business. Especially for small businesses, damage to these costly physical assets may prove detrimental for the survival of the business. Let us discuss in this article the importance of property insurance for small businesses.
SMEs need to secure their investment
Small and medium sized businesses are usually limited by their budgets, and any kind of unexpected risks to their capital can cease the working of their business. Hence, their huge investments in properties, contents and equipment have to be protected from the risks by taking proper insurance. This will not only relieve the business owner from financial burden, but also helps the business to resume quickly.
Protects businesses from catastrophic losses
Catastrophes such as typhoons, gales, lightning, flash floods, and earthquakes can cause massive damage to the property of SMEs. The contents are also hit. Catastrophes are unpredictable. They cause immense damage to these businesses, making it difficult to recuperate from such loss. Therefore, it is important for them to purchase the insurance.
Protects monetary value of the property
Property insurance is beneficial as it covers the damages and repairs because of natural causes such as catastrophes and man-made causes such as vandalism, theft, fire and so on. Such troubles cause significant decline in the value of the property. Also, the property owner would have to repair the breakage and other damage thus, caused to the property. Property insurance will help the policy holder to get the right price to the property, should he want to sell it, thus, keeping the value of the property intact.
Covers loss from theft
This insurance protects businesses against theft by covering the content including inventory, fixtures, equipment like computers, electric appliances, etc., by employee or others.
Protects business content/stock
For SMEs, content in the business house or stock of goods are significant for their everyday operations. It is, as such, important to purchase property insurance that covers the damage to content and the stock.
Covers loss of income due to business interruption
Apart from covering the losses of catastrophes and damages because of vandalism, arson, theft, it also protects SMEs from loss of business by providing income when it is void as a consequence of repairs. Not all property insurance policies offer coverage for business interruption, it is, therefore, important for you to check if a particular company includes business interruption in its policy or not.
Having understood the significance of property insurance, SMEs should consider purchasing it. While doing so, it would be sensible for them to research thoroughly by diverse media including, word of mouth, friends and relatives, and the Internet. The Internet presents numerous brokerage agencies with substantial expertise, which also suggest you the right cover after doing proper risk assessment for your company.
Rabu, 15 Agustus 2012
Truck drivers must have proper insurance to drive heavy trucks on the highways. When they work for a trucking company the company takes care of the insurance requirements. Drivers who take the leap to become owner/operator truck drivers or small fleet owners become responsible for their own insurance. At that point they must be very knowledgeable about the type of coverage they need. They should discuss various options with insurance agents to determine the type of coverage and the proper amount of insurance required to cover the needs of their new business.
Truck drivers typically begin their trucking careers working for a trucking company. Usually, the next step drivers sometimes take from working as hired drivers for trucking companies is to become owner/operators. They become business owners and purchase or lease their own trucks, trailers and equipment. As opposed to being hired employees, they hire themselves out to other trucking companies to haul freight for them. Choosing to become an owner/operator puts these drivers in control of the loads they haul. It also puts them in control of where they choose to go. Additionally, it allows them to earn more income.
Typically, after working for some time as owner/operators many drivers decide to take the next leap and become small fleet owners. They can start with one or several trucks. They can choose to hire other truck drivers or owner/operators. They could also decide to be the sole driver for their company.
The trucking industry is a highly competitive industry so new owners must have a plan to ensure their success. New trucking company owners must make decisions as to the type of freight they desire to haul and obtain the proper equipment. This could include dry van trailers, flatbed trailers, refrigerated trailers, etc. They also will need to decide if they plan to hire other drivers. These and other factors will determine the type of insurance their business requires.
Regardless of whether drivers decide to become owner/operators or small fleet owners they will be responsible providing all or part of the insurance for their truck, trailer and other equipment. Owner/Operators may have part of their insurance such as primary liability insurance covered through the company they are leased to. However, they may need additional insurance to cover their truck, plus any other equipment they have. Small fleet owners are entirely responsible for the insurance needs of their company.
Insurance options will need to be carefully considered. First and foremost is liability insurance. Federal law requires truckers to have liability insurance to drive on the road. Primary liability insurance is the insurance which protects others on the road. Primary liability insurance protects the financial costs of the victims of accidents such as large medical bills, injury benefits, death benefits and damages done to the other vehicle(s) involved in the accidents caused by you or one of your drivers.
Cargo insurance is the insurance which covers the loss of freight that is in the care, control and custody of the carrier. The amount of cargo insurance needed will be determined by the type of freight to be hauled. Generally, the minimum amount is $100,000. A higher amount may be required for hauling high dollar freight and the amount of cargo insurance obtained should be adjusted accordingly.
Having the proper insurance in place for your business enables you to financially protect your business. You may require extra coverage in addition to liability and cargo insurance. Your insurance agent should advise you accordingly. Take the time to choose your coverage wisely.
Kamis, 26 Juli 2012
Most companies have one or more "ringers." In your company, you know who these people are: top salespeople or "producers," key executives, owners, etc. In small- to medium-sized businesses especially, these are the people crucial to success because of their talent, specialized skills, experience, knowledge of your company and many other factors.
Simply put, they're the ones who get the tough jobs done and keep revenue streaming into your business.
Now, imagine if one of your ringers was suddenly gone due to death or disability. What would the short- and long-term effects on your company be?
Key man insurance - which may also be called "key employee," "key person" or "key executive" insurance - could be the answer to protect your company.
How Key Man Insurance Works
Key man insurance is a life and disability insurance policy that companies take out on key personnel, usually with a specific dollar-amount benefit for each individual covered. In the event of a covered employee's death or disability, the company - not the employee - receives the benefit.
How Much Coverage Do You Need?
Once you've determined who your key employees are, your insurance agent can help you walk through a number of factors to determine how much coverage you need. At a minimum, you want to make sure you're covered for the considerable cost of recruiting, hiring and training someone capable of taking a key employee's place.
Other things to consider if you were to lose a key employee:
Would you experience falling sales?
Would you lose critical management skills that could lead to reduced productivity?
What would your short- and long-term revenue losses be?
Certain businesses - in particular professional service firms - have other factors to consider. For example:
A law firm or medical practice usually can't replace a 30-year veteran with a recent graduate - or if they do, can't expect the replacement to generate the same revenue until years later.
If the key person is a partner in the firm, who will inherit his or her share of the business in the event of death? If it's a family member, are they being groomed to step in as a partner, or will they need to be bought out?
It's important to remember that while life insurance is an important part of a key man policy, the odds of disability are much higher. So, make sure any policy you consider provides both life and disability coverage. Also, keep in mind that in some cases, premium for these policies can be written off as a business expense -and any benefits received are usually tax free.
Rabu, 06 Juni 2012
Commercial General Liability - Who is an insured?
1. Named Insureds
a) Individual including the spouse. As an individual you are covered for the conduct of any business of which you are the sole owner.
b) Partnership or Joint Venture. Includes partners, members and their spouses. Coverage is limited to the conduct of your business.
c) Limited Liability Company. Includes members and managers. Coverage for members is limited to the conduct of their business and coverage for managers is limited in respect to their duties only.
d) Corporation. Includes executive officers, directors and stockholders. For Executive officers and directors, coverage is limited to their duties. For stockholders, coverage is limited to their liability as stockholders only.
e) Trust. Includes trustees. Coverage is limited to their duties as trustees only.
a) Employees and volunteer workers, other than executive officers of corporation and managers of Limited Liability Company. Coverage is limited to acts within the scope of their employment or while performing duties related to the conduct of your business.
b) Persons other than employees and volunteer workers. Coverage is limited to while acting as your real estate manager.
c) Any person with temporary custody of your property if you die. Coverage is limited to liability arising out of maintenance or use of that property.
d) Your legal representative if you die. Coverage is limited in respect to their duties.
No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company not shown as a Named Insured in the Declarations of the policy.
Note that employees, volunteer workers, persons other than employees are defined in your policy language and should be reviewed with your agent. Some common definitions are as follows:
A. Employee: "Employee" includes a "leased worker". "Employee" does not include a "temporary worker".
1. Leased Worker: "leased worker" means a person leased to you by a labor leasing firm under an agreement between you and the labor leasing firm, to perform duties related to the conduct of your business. "Leased worker" does not include a "temporary worker".
2. Temporary Worker: "Temporary worker" means a person who is furnished to you to substitute for a permanent "employee" on leave or to meet seasonal or short term workload conditions.
B. Executive Officer: "Executive officer" means a person holding any of the office positions created by your charter, constitution, by-laws or any similar governing document.
C. Volunteer Worker": "Volunteer worker" means a person who is not your "employee"' and who donates his or her work and acts at the direction of and within the scope of duties determined by you, and is not paid a fee, salary or other compensation by you or anyone else for their work performed for you.
Selasa, 15 Mei 2012
Despite increasing competition from a multitude of contractors, construction can be a great business, but this industry also carries more than its fair share of risk. It is important for every contractor to carry sufficient contractors insurance to protect the company in the event of a lawsuit.
Construction insurance provides a range of protection, including coverage for legal liability that could result from poor work by subcontractors or employees. By knowing and understanding the factors that affect premiums, savvy business owners can take the necessary precautions to reduce their legal exposure and costs as well.
Identifying the risks
Keep in mind that underwriters will use both objective and subjective measurements when assessing risk. While those criteria will play a large role in the premiums for the policy, each company that writes construction insurance policies will use its own proprietary models and underwriting criteria. Knowledgeable contractors can save themselves money by knowing which factors will likely be used.
One of the factors an insurance company uses to determine risk is the type of construction. Construction deemed high risk would carry higher premiums, while contractors involved in lower-risk projects will generally enjoy lower premiums.
Putting proper safety procedures in place
A key factor in writing these types of insurance policies is the degree of safety precautions in place at the job site. Implementing strict safety rules in writing is always the smart choice, and those rules can also lower the cost of insurance. So before shopping for insurance, consider the following:
Do the workers always wear hard hats and eye protection on the job?
Are visitors to the site also instructed to wear safety gear?
Are hazardous areas clearly marked with signs and physical barriers?
Are non-employees barred from active job sites?
If written safety procedures are not already in force, implement and enforce them at once. Safety should be a primary concern as it is the number one prevention of most accidents.
Rabu, 11 April 2012
Hurricane Sandy has left a devastating toll on millions of property owners and potentially thousands of small and medium sized businesses. Conservative estimates have calculated insured losses to exceed $30 billion with many having to wait weeks or even months before they will receive compensation or reimbursement for their loss of property, equipment and or damage to other forms of assets. For those businesses especially in the coastal regions and near large bodies of water who were smart enough to purchase flood insurance, they are in a much better financial and mental position than those who elected to decline this coverage.
However, purchasing flood insurance will only cover the cost of repairing or replacing damaged building(s), property, equipment and stock. But what if a business is in an area where mass destruction and flooding will take weeks or even months to clear up. How will these businesses survive with no income and expenses that still have to be paid?
A natural catastrophic event is a perfect example as to why Business Interruption Insurance should be purchased. This form of coverage can usually be added onto a business insurance policy otherwise known as a CGL-Commercial General Insurance for a relatively small cost varying between 5-10% of the annual premium. Business Interruption insurance provides coverage when an insurable loss forces a business to shut down their operations. It will compensate the business owner for the loss of net profits and will cover ALL necessary expenses until the business is ready to open again. The amount of coverage depends on the limits chosen by the insured. For example, a takeout pizzeria that generates $20,000 a month should consider a minimum business interruption limit of $80,000 (4 months coverage). Other forms of BI coverage includes extra expense which will cover the cost of relocating and operating out of a temporary location until the primary location is ready to open again. Note that offering these limits will require the business to provide substantiated proof in the form of financial statements.
It has been the busiest week of the year at our company with hundreds of callers inquiring about purchasing flood, earthquake and other forms of natural disaster coverage. Take out a few moments to review your policy for this coverage and if required, contact your broker and have them discuss the different options. A few hundred dollars towards upgrading your coverage can potentially save your business tens of hundreds of thousands while keeping your brand operational even through the worst possible scenarios.