The Importance of Adapting Your Insurance to Your Business Growth
Watching your business prosper and grow can make all your hard work seem worthwhile. As you enjoy your success, it is important to be aware that as your business grows, risk management considerations increase accordingly. You may need to revise your business insurance because of expansion or any of various other factors.
How Do Most Businesses Get Started With Insurance Coverage?
For most business owners starting out, the cost of business insurance is an important consideration. Busy with operations, they typically allocate little time to risk management and insurance solutions. Many start with a Business Owner’s Policy (BOP), a bundled insurance package providing several essential policies, such as general liability, commercial property, and business interruption insurance. BOP packages are often purchased by owners of small and medium-sized businesses who want to handle all their insurance needs in one place at affordable rates. For businesses with employees, workers’ compensation insurance, which is not included in a BOP, is required by most states.
When Should You Adjust Your Coverage?
When businesses expand, they are likely to outgrow their original BOP packages. After reaching a certain growth threshold, a new insurance strategy may be required. As they begin earning higher profits, it will become more important to prioritize risk management and safeguard assets with the appropriate commercial insurance coverage.
Businesses are only eligible for BOPs when they employ fewer than 100 people and generate less than $5 million in revenues. Even if a business is still eligible after significant growth, it is likely they will need additional customized insurance coverage for protection against new risk exposures. Any of the following situations should prompt a review of coverage needs:
- Hiring employees: Most states require employers to carry workers’ compensation insurance once the first employee is hired. You may also consider employment practices liability insurance (EPLI) for protection against employment-related claims such as discrimination or wrongful termination.
- Changing or adding locations: If you relocate to a larger property after your business grows or add another location, it is essential to update your commercial property insurance to ensure you have the coverage you need.
- Acquiring vehicles: Your business should obtain commercial auto insurance when it purchases its first vehicle for protection in case of accidents on the road.
- Renovating commercial property: When you install new equipment, update structural features, or add additional space to your business property, your commercial property insurance coverage should be adjusted in accordance with the increase in overall value.
- Offering different services or products: If new products or services are introduced to boost your company’s profits, consult with our experienced agent to determine if you need policy adjustments or specialized liability coverage for protection against new risk exposures.
- Digitalizing operations: Using workplace technology to digitize certain operations can increase company efficiency and promote growth and profits. It may also increase the risk of a cyber-attack and your need for cyber liability insurance.
Meet with our knowledgeable agent to review your business insurance. We can help ensure your company has the coverage it needs at the lowest possible cost.
How to Ensure Your Home is Prepared to Weather Any Storm
Although summer means warmer temperatures, it can also bring thunderstorms, with hail, rain, lightning, and strong winds. The following are some tips on preparing your home for harsh weather conditions and summer storms.
Clear Your Gutters and Check Your Roof
The exterior of your home is its first defense against interior damage. Clear and clean your gutters to direct water away from your home and avoid roof, wall, and basement flooding. Get your roof checked for shingles that need replacing or soft spots, and have any necessary repairs done.
Trim Trees and Clear Limbs
Dead tree limbs can come crashing down during a storm, causing considerable damage to your home and adjacent structures. Heavy rains can cause trees with shallow roots to pull from the ground and topple over. Trim tall trees close to your house and have them checked by a specialist to ensure they are stable. Trim weak and overhanging branches to reduce the risk of breakage and damage to your home.
Secure Outdoor Furniture & Structures
Items such as garbage cans, grills, and outdoor furniture can become deadly projectiles in a violent storm. Bring them into your garage or house to reduce the risk. If high winds are expected, have a drill, drill bits, and pre-cut wooden boards ready to secure your windows. Ensure your fences are properly secured to prevent them from being lifted and hurled against the house by heavy winds.
Prepare Your Basement
If your home has a basement as the lowest level, it is the first place likely to be damaged by precipitation. Protect your electronics, furniture, and valuables by moving them upstairs to higher ground. Unplug all electrical cords, as water and electricity can be deadly.
Get Ready for a Power Outage
When a storm is coming, turn your refrigerator to its coldest setting. Move as much food as possible to the freezer. If the power goes out, perishable foods will stay cool and will be safe to eat for longer. Unplug all electrical appliances to avoid overloading circuits and creating a fire hazard when power is restored. If power outages are likely, plan for alternative power sources, such as a portable charger or power bank.
Prepare an Emergency Kit
Keep an emergency kit stocked and ready in case of a storm. The kit should include the following at a minimum:
- Non-perishable foods
- Water (at least a gallon per day for each individual, plus what is needed for pets)
- Flashlights
- Batteries
- Blankets
- Clean clothing
- Hand sanitizer
- First aid kit
- Any necessary medications
- Candles and matches in water-resistant packaging
In addition to the above preparations, meet with our knowledgeable agent to ensure you have sufficient homeowners insurance coverage. With storms becoming more intense, it may be a good idea to consider flood insurance as well, regardless of where you live.
Life Insurance: A Family Conversation on Financial Security
You care enough about your family to protect their financial security with life insurance. But, as crucial as that coverage is, it’s equally important to make sure your loved ones know what your insurance does for your family and how it works — well in advance of the day it matters most. Everyone should grasp […]
5 Labor Day Lessons on Securing Your Business
The long Labor Day weekend is a time for backyard barbeques and celebrating the holiday with family and friends. It is also an excellent time to review your coverage and ensure you have the following five main types of insurance to help protect your business.
Business Owner’s Policy (BOP)
Business Owner’s Policies (BOPs) are among the most popular insurance bundles for small business owners. They typically combine commercial property insurance and general liability insurance. In some cases, they also include business interruption insurance. General liability insurance protects your business from liability in case a third party is injured, or someone’s property is damaged on your business premises. It can also protect you from libel, slander, and advertising injury claims.
Business Interruption Insurance
Also called loss of income insurance or business income coverage, this type of policy protects you in case a covered event disrupts your ability to operate your business. When business income stops temporarily, business expenses do not. Business interruption insurance can help cover your bills and payroll in the interim.
Commercial Auto Insurance
Generally, personal auto insurance will not cover business use. It is important to have commercial auto insurance to cover your business vehicles and their drivers. This type of policy may include:
- Liability: This covers bodily injury or property damage to third parties.
- Med Pay: Covers medical expenses arising from accidents up to policy limits for you, your employees, and your passengers, regardless of who is at fault.
- Comprehensive: Helps pay for damage to vehicles from vandalism, theft, weather, and events other than crashes.
- Collision: Covers damage to your vehicles caused by a collision with another vehicle or object or a rollover, regardless of fault.
- Uninsured/underinsured motorist: This coverage pays for medical expenses and damages owed to you or your employees or passengers due to an accident caused by an underinsured, uninsured, or hit-and-run driver.
Commercial Property Insurance
This coverage provides the protection you need for leased or owned business buildings and properties. It includes machinery, equipment, furniture, and inventory contained in the building. Damage caused by flooding generally is not covered by commercial property insurance. Work with our experienced agent to ensure you have protection from any potential flood losses.
General Liability Insurance
Also known as business liability insurance, general liability protects your business from claims involving bodily injury and property damage. When claims arise from your products, services, or business operations, it typically covers medical expenses for which your company may be held liable and your attorney fees. It does not cover employee injuries (which are covered by workers’ compensation insurance) or auto accidents. General liability coverage may be purchased in a standalone policy or bundled with other key coverages in a Business Owner’s Policy (BOP).
In addition to the five main types covered above, you may need other types of business insurance, such as workers’ compensation or Errors & Omissions (E&O). Meet with our experienced agent to ensure you have the coverage your business needs at the best available rates.
6 Common Problems Caused by Clogged Gutters
Raising a ladder to dig mud and leaves from your gutters never sounds like a fun job. But if you’re a homeowner, it’s worth the hassle. That’s because cleaning your gutters can help prevent anything from bees’ nests to a bad foundation. This year, resist the urge to put off the chore. Need some motivation? […]
4 Fire Prevention Tips for Your Business
Reducing the risk of a fire at your business is one of the most important things you can do to help protect your customers, employees and property. The U.S. Fire Administration reports that more than 116,500 nonresidential building fires occurred in 2021. Those fires caused 1,025 injuries and almost $3.7 billion in damages. The Unseen […]
7 Tips for Developing Your Family’s Fire Escape Plan
During a house fire, every second counts. That’s why it’s important for you and your family to be prepared. A recent study by the American Red Cross found that many homeowners are both overconfident and underprepared when it comes to fire safety. Practicing your escape plan twice a year helps increase the odds of survival, […]
Batten Down the Hatches: What To Know About Winterizing Your Boat
As the days become shorter and the temperature dips, the inevitable appears on the horizon for every boater: winter. But don’t let the impending off-season blow you off course. By planning to properly winterize your boat, you’ll confidently end the season knowing you and your beloved ship will be ready to take on the waves […]
Errors and Omissions Insurance: What Is Covered?
Errors and omissions (E&O) insurance is a type of professional liability insurance. It is designed to protect professionals, including companies and workers, against claims of negligent actions or inadequate work brought by clients. Companies that provide services to customers for fees often purchase E&O insurance.
What Does Errors and Omissions Insurance Cover?
E&O insurance generally addresses the aftermath of professional service mistakes, such as specific errors.
- Errors, mistakes, or oversights
- Failure to meet a deadline or deliver a service promised to a customer
- Failure to meet a specific standard of care as outlined for a given profession
- Professional negligence
- Breach of contract
If a company is sued, errors and omissions insurance may cover legal fees and court costs, whether or not the company is found to be at fault. E&O insurance may also cover settlements, judgments, damages, and expenses incurred by others for professional wrongdoing.
What Will E&O Insurance Not Cover?
E&O insurance will not cover criminal prosecution or liability that arises from illegal acts, intentional wrongdoing, or criminal activity. It does not cover bodily injury, employee injuries, discrimination claims, or information leaks due to cybercrime. Errors and omissions insurance may not cover temporary employees of a company.
What Is the Difference Between E&O Insurance and Liability Insurance?
Errors and omissions insurance is the same thing as professional liability insurance but different from general liability insurance. E&O insurance is designed specifically to cover mistakes made in the operation of a business. General liability insurance, on the other hand, is geared toward claims for bodily injury or product liability.
Who Needs Errors and Omissions Insurance?
Most businesses in which professional advice is given, or professional services are rendered need E&O insurance. Companies sued by clients can be held liable for millions of dollars in damages in addition to their legal fees. Examples of professionals who typically purchase E&O insurance include real estate brokers and agents, insurance brokers, financial planners, investment advisors, contractors, general maintenance companies, engineering firms, printers, and wedding planners. Doctors, dentists, and other medical professionals, as well as lawyers, carry E&O coverage, known as malpractice insurance.
Mistakes made on behalf of a client can be costly. Professionals working in financial industries, such as accounting, real estate, insurance, and investments, can certainly benefit from errors and omissions coverage. Clients may sue financial professionals if they incur losses due to errors made in a consultation, application process, or investment decision. In fact, many regulatory agencies require employees in these professions to obtain E&O coverage, either independently or through their employers.
How Much Does E&O Insurance Cost?
The cost of errors and omissions insurance can vary widely, depending on the type of business, where it is located, and whether any claims have been paid to that person or company previously. A professional or company that has been sued multiple times in the past is likely to pay higher premiums. On average, the cost of E&O insurance is approximately $500 to $1,000 per employee, per year. Our agent can help you find an E&O policy to suit your business needs at the best available rates.
Writing Your Will: Common Questions and Simple Tips
Have you thought about your final wishes in life? We know it’s not a particularly fun topic to discuss. But the truth is, writing a will is an important step to help your loved ones in the event of your passing. (So is choosing the right life insurance.) If you’re one of the 60% of […]