Business Protection Bulletin

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.

A survey by the Centers for Disease Control and Prevention (CDC) found that 69% of U.S. drivers talked on their cell phones – and 31% read or sent text messages or e-mails while driving. “The cell phone can be a fatal distraction for those who use it while they drive,” warns CDC Director Thomas Frieden.

Using cell phones to text behind the wheel can increase the danger of fatal crashes by six to 23 times, and drivers using hand-held devices are four times more likely to become involved in crashes serious enough to injure themselves.

You probably have rules about employees talking on their phones and texting while driving – but are they following them?

According to Jim Evans, president of human resources consulting firm JK Evans & Associates, some bosses turn a blind eye to cell phone use behind the wheel, while others don’t want to cut into their employees’ productivity. His advice to employers: “Dust off the old cell phone policy or unwritten practices and revisit whether employee safety and employer liability is at risk.”

To minimize this danger, your company should require employees who drive on the job to:

• Turn off personal phones or switch them to silent mode before entering a company vehicle.
• Pull over to a safe area if they need to make a cell phone call or send or answer a text message.
• Ask a helper or another passenger to make a return call.
• Contact supervisors or dispatchers when the vehicle is parked.
• Avoid smoking, eating, drinking, reading, and any other activities that distract them behind the wheel.
• Tell people who call them while driving that they’ll call back after reaching their destination.

Recent computer crimes involving hacking major department stores, governments, banks, healthcare providers, credit card companies, even motion picture studios suggest no system is safe from cyber-attacks.

How can we risk manage this threat?

Updating computer systems can be tricky and often exposes data normally kept safe behind firewalls. When components are switched out, oftentimes doors are left open for outsiders to intrude.

For example, when you must lower your own firewall, be sure you’ve changed the factory provided password to the next firewall. Check your fundamentals. Implement strict protocols for employees to change any aspect, hardware or software, of their company computers. Centralize this function if possible.

Train employees to recognize phishing scams. Do not relay log-in information or passwords in response to an email. If an email seems poorly worded with misspellings, it probably did not originate from a major corporation.

Change passwords regularly. Request all systems users to change their passwords often. The company can protect passwords through thorough hashing and encrypting.

The company should back up all encryption software and password information.

Completing all possible due diligence helps move the criminals to an easier target, but determined hackers can find ways in. So, how does a risk manager deal with one of the fastest growing liability risks for companies?

First, understand the magnitude of the risk. For each client record exposed through your company website, your company will provide a year of identity theft protection and cyber security. At a reasonable $150 per account, you gasp at the 1,000,000 customer accounts like the large chains or credit card companies exposed to loss.

These claims are becoming more frequent, and more severe. The only risk management answer is transferring the risk, and most likely through insurance. What limit is safe? Depending upon your data base from outside your company, customer data, supplier data, bank information, and things you can’t remember, like old accounts, these claims can bankrupt companies and destroy reputations if an inadequate response is offered.

Consider that $150 per account. How many will you likely lose in a cyber-attack? Talk to your insurance agent and find the best fitting plan. It’s worth the conversation.

Property risk management in this real estate climate offers tricky valuation issues. Start with the balance sheet: what is the book value of the real estate assets? This number is the primary concern.

The practical value, the operations value, represents the nuts and bolts of the business. If your real property suffers a major loss, how easily can operations be transferred, set back up, and continue? If the business requires massive machinery rigged and moved, the cost can be quite high. This extra expense to relocate, whether temporary or permanent, is an intangible asset, and may require special attention to insure properly.

Real property, buildings, depreciate. The book value, under normal real estate market conditions, is typically significantly lower than the replacement cost of the buildings. An actual cash value, replacement cost less depreciation, will theoretically equate to the book value. But, you may need a new location.

First Contingency Question: Is our current location perfect, or could we move to a new site?

As your business changes, needs change. Offices can be more remote, industry requires some ground transportation, usually trains and trucks, or do you ship by sea? These considerations may have changed since your current site was chosen.

In a perfect world, where would you locate your operation as a new start-up? If it’s where you are now, you need to assure you can replace the building you are currently in, or build the redesigned building you may need to keep up with current building codes.

If you could move or would desire a new location, consider the current market value of your land, and add to that the actual cash value of your buildings. Can you acquire new facilities at the more desirable location for that budget? If so, your contingency plan might include this move, or possibly a rent to own option in an existing building.

Think through the disaster response. Would we want to literally replace what we have, or would that be a good time to change the operations, even slightly. This thought exercise gets better results when you’re not under the pressure of an actual disaster.

Second Question: Does our funding, including insurance coverage, reflect our catastrophe plan?

An important step in risk management – funding the risk. Review your policies, building valuations, amount of coverage, and any extra coverage like extra expense or loss of income.

To help you make sure make sure that your business has the right Commercial Auto policy at the right price, we’d recommend following these guidelines:

Make sure to cover all vehicles that your employees drive on company business. This could include vehicles that employees own, lease, or rent – as well as those that the company owns.

Determine whether you need Personal or Commercial Auto insurance. You might be able to save money by covering vehicles with a less expensive Personal Auto policy in some situations — for example, by registering title to a vehicle in your name. However, if the company owns the vehicle, you’ll need Commercial Auto coverage. Bear in mind that a Personal Auto policy should include the contents of the vehicle, as well as medical costs if a driver suffers an injury on company business.

Be sure to comparison shop. Because every insurance company sets Commercial Auto premiums and coverages in its own way, prices (and values) can vary significantly. Because we represent a variety of companies, we can offer professional advice on finding a policy that’s tailored to your needs — and pocketbook. Just give us a call.

Insurance protects your small business from a variety of liabilities and losses. While you already pay for commercial liability, auto and property insurance, learn how umbrella insurance can help your business, too.

What is Umbrella Insurance?

Umbrella insurance is a policy that kicks in when you max out the limits of your primary insurance policies. It expands your liability and general commercial insurance coverage and may cover incidents your primary insurance doesn’t cover. Plus, it gives your business a layer of protection that increases your peace of mind if you ever face catastrophic insurance losses.

How Does Umbrella Insurance Work?

When you file an insurance claim, the insurance company will cut you a check for the damages or loss. Unfortunately, your primary insurance policy limits may not cover the entire claim, or you may face multiple claims from a single accident or mistake. In these cases, your business could face financial obligations that threaten your company’s assets and future.

An umbrella policy can cover that difference. It protects your business.

What Does a Commercial Umbrella Policy Cover?

Your small business could be responsible to pay for significant liabilities, including property damages, medical bills and legal fees, after an accident. Here are a few common situations your small business may face.

• A customer suffers an injury from a defective product and requires extensive medical treatment.
• An employee causes an auto accident while delivering products, and now your company faces large property damage and bodily injury liabilities.
• A vendor slips on stairs while visiting your property and sues for physical injuries.
• You fail to follow through on a contract, resulting in a lawsuit.

In each of these scenarios, you may file an insurance claim through your primary coverage, and then you can trust your umbrella insurance policy to cover any excessive charges your primary insurance doesn’t pay.

How Much Does Commercial Umbrella Insurance Cost?

Typically, you can purchase a commercial umbrella insurance policy for several hundred dollars annually. Many small business owners want to save money, which may prompt you to avoid this valuable insurance. However, consider the benefits a commercial umbrella policy provides and the amount of money it could save you in the long run, especially if you face a large lawsuit or other liability claim.

How Can Your Business Purchase a Commercial Umbrella Policy?

Talk to your insurance agent about your specific needs. Provide details about your business, such the services you offer, number of employees, financial needs and past claims, as these details can affect the type and amount of umbrella insurance you need.

With a commercial umbrella insurance policy, you protect your business. It gives you peace of mind and security.

Do you have the information you need to make an informed decision on buying Business Interruption (BI) insurance? Unfortunately, some companies only discover that they don’t have enough BI coverage to stay in business after they suffer a major loss. On the other hand, other firms over-insure, shelling out excessive premiums for protection they might not need.

We’d recommend that you review your Business Interruption policy. Check out the insured or reported values for your coverage, as well as the extensions that apply to the specific needs and operations of your business. For example, you might consider adding:

Claims Preparation Fees
Contingent Business Interruption
Expediting Expense
Extended Period of Indemnity
Ingress/Egress
Ordinary Payroll Coverage
Selling Price of Finished Goods Inventory
Service Interruption Power Outage

To help make sure that you’re getting the Business Interruption protection you need at the right price, we’d be happy to do a comprehensive evaluation of your coverage. Just give us a call.

Your small business tax returns may not be due until April, but now’s the time to start your tax prep so you’re ready for the big day. As you gather documents and compile receipts, consider the commercial insurance premiums you can deduct as business expenses.

IRS Expense Deduction Guidelines

According to the Internal Revenue Service (IRS), small businesses can deduct ordinary and necessary costs associated with doing business. Certain insurance premiums fall into this category of deductible expenses.

Insurance Premiums you can Deduct

Here’s a partial list of business insurance premiums you may be able to deduct on your tax return.

1. Auto insurance for commercial vehicles the business owns if you deduct the actual cost of the vehicles and not the standard mileage deduction.

2. Business interruption insurance that covers lost profit if a covered event causes a temporary business shut down.

3. Credit insurance that pays for losses caused by bad business debts.

4. Group health insurance premiums if the company’s employees, managers and owners benefited and the policy is written in the business’s name.

5. Liability insurance that covers accidents.

6. Life insurance for officers and employees if you are not the beneficiary of any of those policies.

7. Long-term care insurance available to employees, managers and owners.

8. Malpractice insurance for personal liability that occurs because of professional negligence.

9. Overhead insurance, which covers business expenses if you become disabled.

10. State unemployment insurance fund contributions if they are taxed under your state’s law.

11. Workers’ Compensation Insurance that covers employees’ occupational injuries or illnesses.

Insurance Premiums you Cannot Deduct

IRS rules prevent your business from deducting several insurance premiums, including:

• Certain life insurance or annuity premiums
• Insurance premiums paid to secure a loan
• Personal insurance premiums
• Self-insured reserve payments
• Sickness or Disability insurance premiums

How to Calculate Insurance Premium Deductions

To calculate your insurance premium deductions, gather your records and add all the allowable premiums you paid during the tax year. Include this figure with your other business deductions on IRS Form 1040. You can find additional helpful information about tax deductions in IRS Publication 535, the Business Expenses worksheet, and IRS Publication 334, the Small Business Tax Guide.

Insurance protects your business and offers invaluable peace of mind. Talk to your qualified professional tax preparer now as you prepare to file your taxes. He or she will evaluate your specific insurance policies and business circumstances, help you calculate your deductions properly and assist you in maximizing your tax return this year.

Your business performs a year-end financial analysis, but when was the last time you updated your insurance policies? Insurance protects your company from liability, natural disasters and cyber threats. Make an appointment now to check, change or update your coverage as you prepare for a successful new year.

Purchase the Right Policies for your Business

Your insurance policies will cover the common risks your business faces. They also protect all aspects of your company, from product conception to customer service. Verify that you have the correct policies for your needs. Several business insurance policies available for purchase include:

• General Liability
• Property
• Business Owner’s Policy
• Business Interruption
• Commercial Auto
• Professional Liability
• Workers’ Compensation
• Directors and Officers
• Data Breach
• Health, Life and Disability

Look Ahead to the New Year

Maybe you want to expand the products you sell, hire more employees or move to online-only sales in the new year. These changes affect your insurance needs, so be sure your insurance policies accommodate your plans.

Insure Growing Assets

The equipment, inventory or other assets you own may appreciate in value. Additionally, you may have purchased machinery, technology and other items recently. If your insurance policies don’t reflect this appreciation or these added assets, you may not receive an adequate payout if you must file a claim. Update your insurance coverage to address your growing assets.

Catch Mistakes

Your annual insurance review can catch mistakes on your insurance policies. You may discover that you’ve overpaid for coverage or purchased coverage you no longer need. With your insurance agent’s help, you catch any coverage mistakes and ensure you only purchase the insurance you need and will use.

Ask for Discounts

While you need to ensure you have adequate insurance coverage, you also want to save money. Ask your insurance agent about possible discounts that make insurance coverage more affordable for your business.

• Increase your deductible.
• Install a security system with cameras.
• Develop and implement a safety training program.
• Strengthen your computer network.
• Improve fraud awareness.
• Reduce operational risks.
• Purchase all your insurance from one company.
• Pay annually or quarterly rather than monthly.
• Remain a loyal customer.

Insurance protects your business, so take time this month to perform an update. Verify that you have the right coverage for your needs now and into the future.

Jillian owns a small office supply store, and she sometimes asks her employees to make customer deliveries in their personal vehicles. She wonders if she needs to purchase a commercial auto insurance policy to cover any accidents or other related claims. Two questions help Jillian address this risk and determine what type of insurance is best for her needs, and they can help you, too, if you’re in a similar situation.

• • What type of work tasks is the vehicle used to perform?

    A commercial auto insurance policy is the best choice if personal vehicles are used by employees to:

    • Make deliveries
    • Visit client locations
    • Transport clients or employees
    • Travel to or between work or remote locations
    • Transport tools or equipment that are essential for employment
    • Transport goods or people for a fee

    If your employees perform any of these tasks and need to file an insurance claim, their personal auto insurance policy may deny the claim. Their personal policy could also be cancelled, leaving them without this valuable coverage.

• • Does the employee have personal auto insurance?

    A personal auto insurance policy is designed primarily for personal use. However, a personal policy may also include a special business-use designation. It may also cover occasional business use if the insured vehicle is a private passenger car or van.

    Inspect your employees’ personal auto insurance policies to ensure it will cover an accident that occurs if the vehicle is used for business purposes. Otherwise, you or your employee will hold financial responsibility, which is quite costly and a huge risk.

After you answer these two questions, you will know if you need commercial auto insurance or if your employees’ personal auto policies will suffice. If you discover that you need a commercial auto insurance policy, be sure it covers your needs and includes:

• An affordable deductible – you don’t want to compromise your company because your deductible is too high.
• Adequate coverage for any type of accident, including minor fender benders and serious crashes that cause bodily injury and property damage.
• Access to a rental vehicle – if you use a vehicle regularly for work-related tasks, your policy should include a rental vehicle you can use while your vehicle is being repaired.
• Coverage for legal expenses – protect your company when you purchase auto insurance that covers legal expenses related to an auto insurance claim.

Like Jillian, you may ask employees to drive their personal vehicles occasionally. Most likely, you will benefit from a commercial auto insurance policy. Your insurance company can customize a commercial auto insurance policy that fits your driving habits and needs. Discover more details today as you get the coverage that’s right for you.