Entries Tagged 'Commercial Insurance' ↓

The Nuts and Bolts of Contractors Insurance

Are you a general contractor, contractor, or subcontractor? Or do you hire them? If so, you need to understand contractors insurance.

Typically, contractors insurance will come into play if a business focuses on one or more of the following: construction, carpentry, plumbing, cleaning, electrical work, landscaping, painting, snow removal, and more.

These categories cover a wide range of businesses and needs. Since every business is different, insurance options range from standard policies to a mix of appropriate coverages. However, some issues are common to almost every contractor, including:

  • Bodily injury and property damage: Many contractors work with heavy machinery and tools. If you do, or you hire workers who do, you should be concerned with potential accidents related to your equipment.
  • Product liabilities: If you deliver a product or serve food, you must consider potential injuries to those recipients, and illness.
  • Medical and disability: In addition to the safety of others, it’s also important to consider an owner’s own health. An owner needs coverage in case of becoming ill or being injured.
  • Errors and omissions: If you provide consulting advice, such as that provided by landscapers or others, you risk liability. Coverage is needed in case a client experiences loss as a result of the advice.

To cover each of these areas, companies will need an appropriate bundle of policies that meet the specific needs of the operations. Options include:

  • General liability: This is the standard that everyone needs. It covers bodily injury and property damage. For medical costs, it covers anyone injured during the course of the work. For property costs, it includes the project contractors are working on plus third-party claims.
  • Completed operations/products: This covers any products sold or distributed, as well as any issues caused on a completed project.
  • Contract liability: This policy provides coverage in the case of a contract dispute. It may or may not be included with general liability coverage.
  • Commercial vehicle: If vehicles are used in the business, companies need this coverage for asset protection, as well as providing coverage for accidents.
  • Workers’ compensation: The regulations for workers’ compensation vary by region. In the case of solo contractors, it’s likely they won’t be required to carry this insurance, but it’s not guaranteed. Be sure to check with an agent about local requirements. If a company has employees, this coverage is needed to protect workers from injury, illness, or death. It provides for employees if they must miss work and for the contractor in case of an employee lawsuit.
  • Professional liability: This is also known as errors and omission insurance. It protects the contractor in the event of an error that causes a client financial loss. It covers legal defense and settlements.

It’s common for businesses to change and grow. Contracting businesses can be particularly dynamic. As companies expand and develop, they need to maintain communication with their agents. Company owners should also review policies annually to determine their needs and make any changes necessary to meet those needs.

Why Your Company May Need Pollution Insurance

Today’s marketplace likes green practices, and most companies are striving for a smaller environmental footprint. From printing less to recycling more, businesses are looking more and more green.

However, even green companies make messes. Even if your business operations are as green as can be, you may still need pollution liability coverage. Your standard liability coverage may not cover this type of incident, so you might want to investigate supplementing it with an environmental liability policy.

The professionals at greatest risk (and therefore in greatest need of this coverage) are contractors. Most job sites pose pollution risks, despite the use of best practices. Broken pipes, leaking fuel tanks, oil spills, and other hazards happen, and they can result in contaminated soil and/or potential health hazards. But contractors are not alone. Any company, no matter how careful, can experience a fire or a spill.

This type of insurance is available to property owners, specialists, and just about any company with the potential for a pollution-related problem. Typically it covers cleanup as well as third-party claims of bodily injury and property damage resulting from a pollution or contamination event, whether it happens suddenly or over a period of time.

There also are environmental policies for specific types of businesses, such as errors or omissions policies for environmental consultants, and contractors’ policies for remediation firms. Call my office about the coverage and limits that are appropriate for your business. When a pollution disaster strikes, your pollution insurance could mean the difference between cleaning up and shutting down.

How to NOT Fail a Workers’ Comp Audit and Ace It Instead

Audits are a necessary part of your workers’ compensation policy. Your premium is only an estimate of what you owe and is based on the projected payroll for the coming year. Once the actual payroll is determined, your premium is adjusted; you either end up paying extra or you receive a partial refund from your insurance carrier. The audit is what determines this result.

The purpose of the audit is to establish whether your coverage accurately reflects your risks. As part of the process, your insurer checks to make sure your employees are properly classified, and that your rates are accurate.

If the information you provide to your insurance carrier is not correct, your policy will not provide the proper coverage. So when the incorrect information is checked, you will fail the audit.

What constitutes insurance fraud?

It is very much in your interest to provide the right information and cooperate with the audit. You may know of some business operators who have fudged information and were prosecuted for insurance fraud. Others may have failed to provide updated information or refused to allow their insurers to visit their facilities, which are breaches of their insurance contracts and allow the insurers to cancel or not renew policies.

Other no-nos include underreporting payroll, providing incorrect job descriptions, and employing contractors without informing the insurers.

Acing the audit

For the best results, always provide up-to-date, accurate information to your insurance carrier. Maintain open communication for a successful partnership that provides the appropriate coverage for your employees.

Stop Thief! Protect Against Business Burglaries

If a thief breaks into your house and steals your TV, your homeowners insurance policy usually covers your losses. But what about a business burglary? Will insurance save you from these thieves?

Typically, yes. A business owner policy (BOP) covers theft. However, it does work a bit differently from homeowners insurance by providing additional protection business owners need. In addition to theft, fire, and liability, a BOP includes business interruption insurance.

If a thief walks away with the tools you need for construction work, the computer required to run your office, or the inventory you rely on for sales, your policy will help cover your lost operation time. It will keep money coming in while you are unable to run your business.

But like homeowners insurance, business owner coverage offers either actual value or replacement value for reimbursement of stolen property.

If you receive actual value, you will get the worth of the item(s) minus depreciation. With replacement value, you receive the amount it will cost to replace the item. The type of coverage you have for your business helps determine the rate of the premium.

Each owner must decide which is the most cost-effective for his or her business. Consult with my office for advice on determining what is best for you.

Regardless of coverage type, you should keep complete records of all items at your business site. This can include receipts, photos, or a video documenting what is on the premises. This will provide proof for your claim and help expedite the process.

How to Prepare Your Business for Cyber Attacks

Technology creates new opportunities and options for your business. Most of these are good; some aren’t. In today’s marketplace, businesses must be prepared for cyber threats. Here are five you should watch out for:

  • Hacktivists - These tech pros are on a mission to make a political point or embarrass your company. Their actions can range from benign to seriously damaging.
  • Criminal hackers - Not to be confused with hacktivists, criminal hackers are trying to accumulate funds illegally. Think of them as online thieves. Their hope is to find a way into your system to siphon your funds.
  • Intellectual property threats - Hackers may seek out technical plans, blueprints, patents, or other secured information. This intellectual property gives them access to sensitive information at a great cost to your business.
  • Terrorism - These hackers aren’t looking for monetary gain, and they definitely aren’t playing an embarrassing prank. Terrorists may want to steal information that aids in a physical attack.
  • Disgruntled employees - The other four types of cyber threats are all external; this one operates from the inside. An unhappy employee has access to passwords and other insider information and can use his or her insider status to inflict damage on your company.

Stop hackers in their tracks

To protect their companies and their employees, business owners must be prepared for these threats. However, it’s not about trying to avoid being hacked. You should expect these cyber threats to happen; no one can avoid them entirely. The goal is to make breaches as small as possible, and to act quickly to minimize damage.

Business owners should realize they can stop a hack in progress. Strong security and careful scanning can alert you to hackers’ activity. Hackers’ reconnaissance missions are often lengthy; on average, 240 days pass before they’re noticed. Try to spot them early to begin identifying who they are, what systems they’re in, and how you can cut them off.

Contain and act quickly

Once the hackers are ensconced, you need to implement a predetermined plan to handle the attack. It’s essential to have analytics and legal teams at the ready to intervene; if a plan is not already in place before a cyber threat happens, the proper resources cannot be moved quickly into place to handle the issue.

Something else to keep in mind is focus. Too often, companies and legal teams are worried about potential litigation later on. The initial focus must be on surviving the current threat.

Being aware of these potential threats can help business owners understand their vulnerabilities and prioritize protective measures. Because these attacks are nearly inevitable, company owners must take steps to prepare on all fronts.

Cyber insurance

A key part of your preparation is cyber insurance. These policies cover liability for data breeches, and they’re essential. Without insurance, a nasty cyber attack could bankrupt your company and destroy all you’ve worked for. Discuss cyber insurance with my office; we can help you select the coverage that’s best for your company.

Going Green? Don’t Forget to Check Your Insurance Coverage

Increasing numbers of businesses are striving to reduce the size of their carbon footprint. While these efforts to go green save valuable resources in the long run, their initial setup can be costly.

For example, under traditional commercial insurance coverage, replacing or repairing old equipment with more environmentally friendly parts is not fully covered. Reimbursement is based on the value of the original equipment, which is typically lower than that of its green counterparts.

However, in response to these growing green needs, many insurers are now offering green endorsements that businesses can add to commercial property policies.

Green materials and equipment endorsements cover the higher cost of environmentally certified materials and equipment. It includes coverage for the difference in cost if your previous equipment was not green certified. If you must rebuild, the policy can also allow you to elevate your building to green certification status.

Green construction endorsements cover all miscellaneous costs involved with green construction, including design, engineering, certification fees, and recycling. Additionally, some insurers offer discounts for hybrid and electric cars if used for commercial purposes.

Some aspects of going green may require business owners to increase their coverages. For example, because green construction typically takes longer than traditional construction, business owners may want to extend their business interruption coverage.

They may also wish to increase overall property coverage if new environmental features are added.

Learn the ABCs of Asbestos, Taking Special Note of ‘B’

Contrary to popular opinion, asbestos is still around: asbestos liability remains one of the biggest threats to U.S. businesses, and the insurance industry estimates that asbestos-related losses could go as high as $85 billion. Here are the ABCs of asbestos - something you may not have thought you’d need to know about:

Asbestos: Naturally occurring in the environment, asbestos is a group of minerals that exists as bundles of fibers, which can be separated into threads. Because of their durability and resistance to heat, fire, and chemicals, asbestos fibers have been widely used in many industries, including construction, shipbuilding, and automotive.

After heavy use in many products, asbestos was discovered to be a health hazard. Consequently, the use of asbestos has been greatly reduced. However, older products, especially older buildings, still contain asbestos. It is still legal to use asbestos in some applications, providing the product contains less than 1% asbestos.

Business insurance: Asbestos can prove costly to business owners whose employees use or regularly encounter it. Be aware of safety regulations, and implement them, using the help of employee education programs. Liability lawsuits are still being filed by individuals exposed to asbestos, and liability insurance is a must-have - not a should-have. Check with my office to ensure your coverage is appropriate for your level of risk.

Claims: The initial discovery of the harmful effects of asbestos resulted in a surge of claims. By the 1990s, it seemed this wave had passed. Recently, though, it has resurfaced. Business owners should be prepared with proper insurance.

What Is Terrorism Insurance and Should I Have it?

Terrorism insurance coverage is not what it used to be. Prior to 9/11, business owners got terrorism coverage free or for a small fee. Events of the past fifteen years have changed this.

As of 2002, the Terrorism Risk Insurance Act set out insurance coverage basics for terrorist attacks.

The act established that commercial property owners must be offered a terrorism coverage option. Private insurers provide the commercial policy, but it is reinsured by the federal government.

Premium rates are based on risk for attack. If your business is located in or near a potential target for terrorism, rates are higher.

A policy for a large business in an urban area may costs thousands per year, while less vulnerable areas can see annual premiums of just $25.

It is up to the Treasury Department to administer the program and officially declare whether an event is a certified act of terror - only then is compensation provided for the losses.

If an act is certified as terrorism, a business owner’s terrorism insurance kicks in to cover property damage or losses caused by the attack.

These may include damages to structures and/or vehicles and injury or death of workers. Nuclear, biological, chemical, radiological, and war events are not covered.

Currently, 60 percent of business owners in the U.S. carry terrorism insurance. Should you? Consider the following:

  • Are you located near a potential target?
  • What is at risk? (Do you have a lot of property, vehicles, and employees?)
  • What is the policy cost?

Happy New Year! It’s Time to Review Your Insurance Coverage

Exercise more. Eat better. Learn something new. It must be New Year’s resolution time again. As 2016 approaches, it’s a good opportunity to make New Year’s insurance resolutions by reviewing your coverage and deciding if changes are needed. As you examine your policies, consider making these resolutions for next year:

Update home inventory: Is your home inventory up to date? What have you sold, donated, or pitched in the past year? What devices will the family splurge on this Christmas? An up-to-date home inventory is essential to make the most of your coverage in case of theft or disaster. Include all items and their cost. Store this list off-site or in the cloud.

Assess car policies: Does your vehicle coverage accurately reflect your car’s value? As autos age, you may want to reduce coverage. Who drives the car? Are primary and occasional drivers designated properly?

Check for savings: Are you currently taking advantage of every savings opportunity? A call to my office will be worthwhile. Check for new programs, multiline discounts, and changes in policy requirements; they may save you a few bucks in the coming year.

Life changes: Be sure to discuss with my office any life changes, such as marriage, divorce, death, or births as well as home purchases, renovations, job changes, and health concerns. These can impact your insurance needs and may affect everything from your homeowner and life insurance policies to health insurance. You may even need commercial insurance if you’re starting your own company in the New Year.

Do You Need Landlord Insurance?

Increasing numbers of homeowners are considering turning a second home into an investment property by renting it out. If you’re thinking about this alternative, depending on the type of rental you’re considering, you may need landlord insurance.

If you are planning to rent all or part of your primary residence for a short time (a week or less), you may not need a landlord policy. Often your homeowners policy will cover this situation. However, check with your insurance advisor to see if any additional endorsements are required.

If you want to start a bed & breakfast in your primary residence, you are then considered a business and will need a business insurance policy.

But when you decide to make a second home into an investment property to rent to tenants over the long term, you have become a landlord, and you will need landlord insurance. The policy may be customized to suit your needs and will provide the additional protection you will need as a landlord.

Options typically include:

  • Standard structure protection. The home, any other structures on the property, and any owned items on the premises, such as appliances, are covered.
  • Liability. As a landlord, you will need greater liability coverage to protect against claims for injuries on the property.
  • Fair rental value coverage. This option reimburses you in the event of a disaster where tenants can no longer live in the home and aren’t paying rent. Your loss of rental income is covered while the home is being repaired or rebuilt.
  • Some companies offer extra coverage options such as lock replacement and emergency repair service.

Because landlord policies provide the higher coverage you need, they typically cost about 25% more than a standard homeowners policy. However, discounts such as multipolicy and new/renovated home discounts may be available. Contact my office for the option that’s best for you.