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Business insurance is a broad description that can be broken down into a list of nine types of insurance policies and here we will briefly explain the coverage and expand on these as individual topics.
Business Property Insurance
Property insurance provides coverage in case of total loss or damage
to the business and its contents. You can choose to cover some risks
and not others (eg. a fire insurance flood insurance, earthquake.
You can also insure machines, inventory, or other items that belong
to suppliers or others, but that are under your roof and control.
Property insurance needs to be reviewed at least annually as your inventory, equipment, or other contents are generally changing all the time. You may also want to review the deductible as your business grows and can assume more risk.
One Stop Shopping
It is easy to fall into the trap of taking insurance coverage for granted. You purchase a policy for auto or homeowners and keep sending the premium payments without much thought. After all, making a change in your insurance seems like a huge task. Who will you use? How will you really know if the new policy is better or worse than the one you have now? If it costs less, is it because you are getting less coverage? If it costs more, is there a benefit that makes the cost increase worth it?
Not only is there the question of which agent to use, but then you want to be sure that the insurance company is fair in its policies and financially sound so that you will get your expected benefits when you have a claim.
Finally, your circumstances are always changing, and those changing circumstances may dramatically effect the coverage you should have for your family or business. What is the best way to make sure that you have the best coverage with the best companies for your circumstances as they change over time?
When you use an independent agency like Ted Papanickolas Insurance Services , the management and staff will be able to keep track of all the issues that matter to you and your situation across all policies. The insurance professionals at Ted Papanickolas Insurance Services regularly review all your coverages and asks pertinent questions about changes in your life and your assets, to help ensure you are properly protected. Since We have access to the finest and strongest insurance companies in the US, and multiple companies for each kind of policy, they can help you to select the best policy and company for each kind of coverage. Everything done by one agency. It only makes sense to have Us handle all of your insurance needs.
Call or Email now to discuss a complete package with Ted Papanickolas Insurance Services.
Casualty insurance insures against loss or damage to the business in ways that are not covered in the property insurance coverage. Property and casualty insurance are commonly packaged together, and may also include liability coverage.
-Flood Insurance - Plumbing leaks are covered by property insurance, but floods are covered under casualty insurance.
-Political Risk or Government Liability - This is a very specific type of policy for businesses with overseas exposure in countries that have the potential for business damages resulting from a sudden political change in a country or withdrawal of a contract as a result of a political decision without recourse.
- Terrorism Coverage - Insurers now specifically exclude acts of terrorism from the basic property insurance, and require the purchase of a separate terrorism policy if you wish that coverage.
- Employee Theft - If your employees have access to company funds, inventories, or equipment, or if they handle cash you will likely need this coverage.
- Surety Bonds - A special type of casualty coverage is referred to as a "bond." A surety bond is one type. It insures a client or partner that you will complete the contract. This type of bond is commonly used in construction and with some types of government contracts
- Other Types - Identity theft, Cyber-Liability, Cyber Fraud
Liability insurance insures your business against loss from the negligence of your business or its employees.
Employment Practices Liability Insurance is liability insurance to protect your business from claims by employees against the business for things like wrongful discharge, workplace harassment and discrimination.
A Liability Insurance Policy covers your business in the event of a law suit alleging your company caused damage or loss by a mistake.
A Business Insurance Plan should include a Liquor Liability Policy if you supply, manufacture, or serve alcohol to your customers.
Product liability insurance is business insurance that is designed to cover liability of the business for damages caused by a product manufactured, supplied or designed by the business.
Businesses often face the situation where an employee is accused of a crime or similar act. Business insurance may or may not provide coverage for such an act.
Business insurance can provide coverage for damages caused by an advertising injury. Here we discuss advertising injury coverage and business insurance coverage for such risk.
Commercial auto insurance is one of the most critical coverages for your business insurance and risk management program. Your personal automobile policy does NOT cover vehicles used by your business. If your business uses vehicles or anything that is required to be titled by your state, then you need a commercial auto policy. Commercial auto coverage insures against property damage to vehicles and damage caused to others by those vehicles.
Commercial auto insurance insures your business against loss or damage to vehicles used by your business and damage caused to others by vehicles used by your business. Your business needs commercial auto coverage if it uses any titled vehicles in its business. If a vehicle is used extensively or exclusively for the business, your company may face liability even if the title is not in the name of the business. We can help you sort these issues out.
You must insure your employees against on-the-job injuries in California. With a workers' compensation program your employees are not allowed, by statute, to sue you for on-the-job injuries. In return, the you must, as the employer, participate in a system that provides payment to the employee in case of injury for their medical bills and damages. There are many options for workers' compensation coverage. We can help you sort out those options.
Premiums for workers compensation are arrived at by the following formula:
RATE X $100 payroll X Experience Modifier = PREMIUM
There are two critical variables in the equation: rate and experience modifier or mod.
Every year, California determines the rate for your industry using actuarial calculations. Clerical work is usually the lowest since clerks don't get hurt that much. The construction trades like carpenters and roofers is usually the highest since they get hurt on the job more often and the injuries are more significant.
The MOD is determined by your business's loss and claim history. It is a multiplier on the premium. The average company having an average number of claims will have a mod of 1.0. If your claims history is low it will decrease. If your claims history is high it will increase. If you have a MOD of .90 it is the same as having a 10% discount on your premium while a MOD of 1.10 acts as a 10% increase over the average in your industry group.
Your premium is a multiple applied to every $100 of payroll. If you have a rate of .08 with a MOD of 1.00 you will pay $8.00 of annual premium for each $100 of payroll. If you improve your losses in that year, the next year you may go to a mod of .90, which would reduce your premium to $7.20 on each $100 in payroll.
What can a company do to effect their premium?
Safety is the key - Nothing will change your expense on this like a great safety record. The fewer claims and the less significant the claims the less you will pay. Implementing safe workplace procedures including equipment, training, incentives, and clearly written procedures will almost always more than pay for the costs through reductions in the cost of workers compensation premiums.
California Programs - You can participate in state programs to improve safety in return for a deduction in the MOD rating. We can help you with this.
Review Your Payroll Figures - Payroll calculations are frequently wrong or are not correctly estimated. A outside consultant can review your payroll history which will often result in a lower estimated payroll and lower resulting premium.
Review The NCCI Classification - Most workers compensation programs have a 30-35% error rating when it comes to business classification. Through carefully determining what each employee group does, you may save very substantial amouns on their rate. Classify all of the employees individually and demand proper classification. In the example above, a clerk classified as a construction worker because he was in the same payroll group can cost thousands in premium dollars.
Errors & Omissions/Malpractice
An error or omission (failure to act) can occur on almost any transaction. Professionals who are at the top of their field or who have been in business for decades are still at risk for a claim that they failed to handle some matter appropriately or just didn't act when they should have. These claims may result in the threat of a lawsuit or an actual lawsuit. This is the point at which errors and omission policies take over. E&O insurance programs help provide protection for the busy professional from the liability associated with such errors, mistakes or omissions.
Errors and omissions insurance are designed to protect a professional for claims relating to mistakes and claims relating to allegations of mistakes. Legal defense is a significant aspect of the cost of errors and omissions insurance as it is common for a professional to spend tens of thousands of dollars for a defense of a claim even if the claim is ultimately dismissed or settled for a small amount.
Any professional can (and should) purchase errors and omissions liability insurance; Doctors, Lawyers, Accountants, Architects, Engineers, Realtors, Financial Planners, Computer Consultants, Business Consultants, Party Planners, and more.
How Much Does Errors and Omissions Insurance Cost?
E&O insurance is not that expensive. Premiums for E&O insurance are based primarily on the revenues of the professional or the professional organization, the type of service provided, and the company's loss history. E&O insurance costs vary by state, by industry, and by insurance carrier. We work hard is to locate the most competitive E&O insurance carrier for your industry and circumstances.
How do I get an insurance policy for errors and omissions?
You simply fill out an application for E&O insurance which asks for basic information about your business including the type of business and your revenues. The underwriter needs to get a handle on what their risks are. The application may request financial statements or information about the management such as professional biographies.
Other Professional Liability Insurance Programs you may be interested in, include, but are not limited to:
Director's and Officer's Liability
Employment Practices Liability
Imagine that your building is hit by lightening, and as a result you have equipment or computers that go down. The repairs may be covered by property or casualty insurance, but if the business can't operate for days, weeks or months, those insurances do not replaceme the lost income during that period. That is where business interruption insurance is vital.
Figuring out how much business interruption coverage to purchase is complicated. You need to make an educated guess about future business profit, the real likelihood of potential loss, and then base the amount of coverage on those projections.
Business interruption policies have coinsurance penalties for under insuring. The penalty can range from 20 - 50% of the claim. You can also determine how much risk you wish to take on the coinsurance aspect. This is another area where working with Jaffe Insurance Agency will be critical. We can help you with these calculations.
Many insurers now include a premium adjustment endorsement in their policies to help with these issues. The premium adjustment endorsement helps eliminate risk by allowing you to over insure. At the end of the policy year, the premiums are recalculated and excess premiums are returned.
Key "Man" Insurance
Many businesses have one or more individuals whose unique skills, training, and ability make them "key" to the success of the business or a component of the business. If that person were to die or become disabled to the point where they could no longer effectively execute their position, there would or could be a financial loss to the company. That loss might take the form of lost business, or merely the costs of finding, hiring, and training a replacement. Key man insurance is a type of life insurance designed to provide coverage to fund that financial cost if those services need to be replaced.
Key man insurance is generally a term insurance policy with the term being the time until that employee retires or until there is some assumption that the risk will no longer exist. The company may have a plan to have back up for that position some time in the future, for instance. The company pays the premiums on the policy and receives the death benefits should the employee unexpectedly die. At retirement, the company may choose to surrender the insurance contract, giving the employee the chance to convert the policy to some type of permanent insurance.
In some cases, key man policies may have split beneficiaries with some proceeds going to the spouse or other loved one of the employee.
How Much Key Man Insurance Should the Company Take Out?
Your key man insurance policies should provide enough coverage to account for all costs associated with the loss over and above that which the company is willing to pay out-of-pocket. If you have one or more individuals in your employ who meet these criteria, please contact a representative of Ted Papanickolas Insurance Services who can help you determine adequate coverage for your situation.
Life and Disability Insurance
Life and/or disability insurance provides protection against the death or disability of key employees. If the company has two or three key active stockholders or partners, each partner carries a life insurance policy naming the partnership or the company as a beneficiary. If one key member dies, the proceeds of the policy are commonly used by the business to buy out the decedent's partnership interest from the estate.
It is also possible to have some of the proceeds used to provide for a transitional employee while the skill sets of the deceased are replaced.It is also common to use such insurance for highly skilled and trained employees who may be difficult to replace if they become unavailable by death or disability.