Almost any time of the year, fires, floods, storms, hurricanes, and many other disasters can cause a lot of damage to homes and businesses. One of the first things a business owner should do to protect their investments from natural disasters is buy business insurance, specifically commercial property insurance. Commercial property insurance is a type of property loss coverage. It protects your business from damage caused by things like bad weather, theft, and vandalism.
This coverage is different from homeowners’ insurance in many ways. Because if a business is ruined and can’t run for a while, there are more expenses to worry about. Since business costs don’t stop if the building is in disarray, a disaster can cause a loss of business in the future. Which can lead to a loss of income while the building is being fixed. Commercial property insurance and the purchase of add-ons to the policy can help cover the costs of repairing the property and keeping the business financially stable in the meantime. But how are the rates for this type of coverage determined?
The Equation
Your underwriter will use all of your data and information you send to plug into an equation to figure out the premium. To start you’ll submit a statement of values (SOV) to your insurance company. A SOV is a thorough list of your assets that your insurance company will use to figure out how much it would cost to replace all of your business’s property and equipment. The total sum of your SOV is now added to your expected business income for the upcoming year. Giving you your total insurable value (TIV).
Your underwriter will then take your TIV and multiply it by your exposure risk rate, which is decided by the rating agency your insurer uses, divided by $100. This sum will give you your premium. Say your TIV is $1,000,000, and your exposure risk rate is $0.4 per every $100. The equation would be $1,000,000 x $0.4/100=$4000 annual premium which is about $333 a month. There are a lot of things that go into getting the numbers to put into the equation though. Things that affect your premium are:
Claims History
The first thing that many insurers look at is how your history of claims compares to that of other businesses in your field that are about the same size. If your business has more or worse claims than others, you’ll have to pay more. However, there is a way to keep your claims at a minimum, or fix the claims history you already have. Accident and injury claims can all be reduced with a good safety program at work and careful risk management, especially when compared to other companies.
Regular safety inspections and a review of safety management to find risks can help you find possible problems so you can fix them before they cause problems. Accident and injury claims can also be cut down by making sure your workers have the proper training on the equipment that they’re working with. If you have a bad claims history and after you implement these safety regulations, you can show your insurer that you have significantly less claims over the course of a year or two. Your insurer will then most likely lower your premium.
Property Construction
Coverage rates can be affected by the materials used to build the business property and by how well it is kept. Buildings made of fireproof materials like brick or stone, or businesses with fireproof walls and doors, will cost less to cover than a building made of wood. This is because a property built with fireproof materials is less risky to cover than one built with wood or other materials that burn more easily. Furthermore, having up-to-date fire sprinklers and alarm systems can also help lower insurance costs. Also, newer buildings and those with recently updated electrical wiring, plumbing, and heating, ventilation, and air conditioning (HVAC) systems often cost less to insure than older properties that need more upkeep.
Industry
Commercial property insurance rates can also be affected by how a building is used. A restaurant or welding business has more risks than a flower shop or a dress store due to the nature of the business, so their insurance rates will be higher. Also, a business’s insurance rates are likely to go up if it shares space with another business that has a lot of possible risks.
Property Location
You know that saying, “location, location, location”? It doesn’t just mean pick a busy area with potential customers, it also means pick a safe area. Your insurance company looks at every possible risk, and we do mean every single one. Any possible risks in the area that your business is located heavily impacts your premium. Risks can include the crime rate, how often natural disasters happen in that area, your proximity to oil plants or businesses that use flammable materials. Location doesn’t just negatively affect your premiums, it can also lower them. Your commercial property insurance can go down if your business is close to places where emergency services are readily available. Such as a fire or police station or even just a fire hydrant. Your business being near emergency personnel means it’s more likely they’ll respond quickly and minimize the damage compared to a business that operates further away.
Coverage
How much coverage you need is the main factor in your premium. To find out how much coverage you need you have to find out how much both the building and anything in it are worth. You don’t want to get a coverage limit that is less than what it would cost to replace all of your equipment or the building. For example, if all together it would cost $1million to replace everything you’d need, at least that much coverage, if not more because when it comes time to actually replace everything, more than likely it will be more expensive than you originally planned.
You should also factor in inflation. So, you’ll want to give yourself some wiggle room just in case. It’s also very important to look over the assets on your statement of values at least once a year. This makes sure that as your business grows and changes, the limits of your insurance will still meet your needs.
How To Lower Your Commercial Property Rates
By following a few important tips business owners can save even more money on their commercial property insurance costs. These can make sure that the business isn’t losing money on insurance costs, while still having sufficient coverage.
Review Your Policy
When a business owner wants to find ways to cut their insurance costs, one of the first things they should do is read their policy carefully. Some people will find that they have more insurance than they need, which means they pay for unnecessary coverage. Changes in the business have sometimes made it so that less coverage is needed. For example, a company may have insurance for tools or a vehicle they no longer have.
Pay Premium In Full
You can choose to pay your commercial property insurance premium entirely, once a year or in monthly installments when you buy the coverage. However, paying the full year in advance is cheaper than paying every month.
Bundle
Companies can bundle their insurance plans to save money, just like many people do with their home and car insurance. A business owners policy, or BOP, is a package of insurance plans that many insurance companies offer to small and medium-sized businesses. Most company owners’ policies include general liability insurance, commercial property insurance, and business interruption insurance at a cheaper price. Any business that buys these three policies individually should think about bundling them to save money.
Raise Your Deductible
A deductible is the amount that the insured has to pay out of their own pocket before the insurance company pays the rest of the claim. Deductibles are chosen when an insurance contract is made. But they only have to be paid when a claim is made. By raising the amount of a deductible, you can lower the amount you have to pay out of pocket.
Policyholders need to look over their policies carefully to see if they can pay a bigger deductible for an accident. When you raise your deductible, your insurance costs go down, but you take on more risk. Fees are often charged each time something happens, not just once a year. Find out what a good deductible for your business is by talking to your insurance agent or provider. Increasing your deductible might not be a good idea if you take on more risk than your business can handle.
Minimize Risks
When giving a quote for a commercial property insurance policy, insurance companies look at a number of things. Such as the amount of risk a business faces. There are several safety precautions a business can take in order to minimize their risk to an insurance company. If a policyholder’s buildings and cars don’t already have a security system, they might want to think about buying one. Businesses can also do things like put sprinklers in your building, work area, or warehouse to lower your risks of fire and possibly lower their insurance rates. Modern fire alarms and smoke monitors should also be put in every business building.
Look For Discounts
Even if your insurance company doesn’t advertise discounts, it doesn’t hurt to ask. Policyholders should always talk to their insurance company to find out if they offer deals or if there are other ways that they can save money. Some insurance companies will give you a discount if you stay with them for a long time. While others will give you a discount if you start a safety program.
How EZ Can Help
Every business is different in terms of what risks it faces, how much its property is worth, and how much coverage it needs. Commercial property insurance prices can change a lot from one company to the next. But businesses can still find ways to lower their insurance costs. The first step to lowering your business property insurance costs is to talk to an experienced insurance agent.
EZ can help whether you need group health insurance for your workers or commercial insurance to protect your business. Our agents work with the best insurance companies in the country to make sure you and your workers get the best insurance. In fact, we can find you the best coverage for your budget and save you hundreds of dollars a year. Feel free to call us at 877-670-3538 if you have any questions or enter your zip code to get started on a quote.
“Commercial insurance endorsements” is a phrase that insurance companies and brokers frequently use, but few business owners understand what an endorsement is. An insurance endorsement (or rider) amends a commercial insurance policy by adding, removing, or excluding specific categories of coverage. It enables you to tailor your insurance to your specific demands or budget without having to shop for a new or additional policy. For example, if an insurance policy you’re contemplating does not protect a critical risk or person you need it to, you might ask your agent to add an endorsement that does. On the other hand, if a policy provides coverage that you do not want, you can seek an endorsement to have it removed, which could save you money.
How Do Endorsements Work?
Each insurance policy begins with a standardized coverage form, which provides a baseline of coverage and is used in practically every industry and on every policy large and small. The problem with lumping every company together is that not all businesses in the same industry need or want the same levels of protection. Lumping everyone together can cause excessive coverage or lacking coverage across the board. Some businesses may be considerably too dangerous to insure on a conventional basis and a standard policy won’t be able to cover them properly.
This is why we have endorsements, to tailor commercial insurance policies to the specific needs of both the consumer and the insurance company. Endorsements are one of the fundamental building components of insurance. Typical policies include 3 components:
Insuring agreement – This is a list of the risks the policy will protect you from
Exclusions – Lists all of the losses your policy won’t cover
Conditions – These are the terms you agree to meet in order to be covered.
How do endorsements fit into this structure? They can either change the insuredinsuring agreement, removing unnecessary coverage, or negate one or more exclusions, thus restoring coverage to the policy. As a result, your policy will be more closely aligned with your company’s risk exposures and insurance budget.
Adding Coverage
An endorsement can be utilized to extend the policy’s coverage beyond what is standard. Additional coverage may be added in terms of who is covered, what coverage is offered, or how much coverage is provided.
Removing Coverage
Endorsements are not just used to add coverage to a policy; they can also be used to cancel or limit coverage. Coverage can be altered in a number of ways if the agreement between the insured and the insurer changes. An endorsement can be used to remove all coverage or just add an exclusion. Another way to limit coverage is to impose a separate lower insurance limit to a specific type of claim. Coverage can be canceled or limited in any of these instances by using an endorsement that describes the scope of the coverage change.
Administrative Changes
Any changes to the policyholder’s or any other relevant party’s information must be documented in an administrative edit endorsement. Changes in mailing addresses, for example, or changes in name or title, must be reflected in the policy.
Clarifications
Finally, some endorsements involve tweaks that do not affect the policy’s essence. If a clause is misunderstood or misread, an endorsement may be required to clarify and make the language more clear.
Types of Endorsements
An endorsement might be as simple as clarifying a certain concept or coverage, and it can add coverage that is frequently omitted from ordinary policies. Although some endorsements add coverage that was not included in the original liability coverage form, others can remove specific coverage. To start there are 4 categories of endorsements:
Standard Endorsements
The same way that many insurance plans are governed by certain rules and defined terminology, so are endorsements. Organizations such as the American Association of Insurance Services (AAIS) and the Insurance Securities Office (ISO) create templates that insurers can utilize. These organizations’ templates are available to insurers who subscribe to them. These are among the safest and most secure endorsements.
Non-Standard Endorsements
Non-standard endorsements are ones created by the insurer for a specific type of policy holder. This may be done if the specific endorsement is not included in conventional endorsements. Many insurers will write their own endorsement statements utilizing standard endorsements as a basis.
Voluntary Endorsements
An endorsement to a policy can be added freely by the insured or insurer. Because of the nature of the business, voluntary endorsements may be included. If a company sells alcohol, for example, the insured may request that a liquor liability endorsement be added to a general liability policy. An example of an endorsement given by the insurer would be the exclusion of asbestos claims from liability coverage. Policies covering specific sorts of operations may include specific types of endorsements, such as an endorsement for a business’s general liability policy stating that the policy must have a professional liability exclusion.
Mandatory Endorsements
Certain endorsements are required. The Insurance Services Office (ISO), for example, requires endorsements on policies that provide a specific type of coverage. State-mandated endorsements may include additional criteria to safeguard individuals, such as limiting the insurer’s authority to cancel a policy. ISO requires various endorsements, such as requiring all general liability policies to include specific exclusions. For example, an insurance company that operates in numerous states may use one base policy plus a series of endorsements suited to the regulations of each state. A policyholder who moves between two states may need an insurance endorsement to a policy that is carried across state borders.
Common Insurance Endorsements
A business owner may require a variety of endorsements, the most typical of which are:
Additional Insured
Businesses utilize additional insured (AI) endorsements to add a person or entity as an insured to a policy. The person or company added is typically a general contractor working for the named insured. It is frequently requested on a wide range of insurance policies, including professional liability and commercial motor insurance. However, commercial general liability (CGI) is the most popular. This endorsement is requested by the named insured to ensure that the proper organization or individual is held financially liable in the event of a risk occurrence.
Prior Acts
This endorsement covers claims made on incidents that occurred prior to the signing of the liability insurance policy. Certain claims take time, and the insurance company will usually include a retroactive date that is prior to the beginning date of coverage. As an example, consider a doctor who purchases a new malpractice policy with a prior actions endorsement. If a claim is made for an event that occurred before the new policy went into effect, but after the stated retroactive date, it will be covered by the current policy. If an insurance company does not include a retroactive date. These types of endorsements are considered full prior actions coverage. Any claims made during the current policy’s coverage period would be covered.
Extended Reporting Period
A claims-made professional liability coverage can be supplemented with an extended reporting period (ERP). You can file a claim even after the policy has expired. ERPs are classified into two types: basic extended reporting period and supplemental extended reporting period. If an insurance is canceled or not renewed, a basic ERP is frequently offered for a free 30-day or 60-day extension. Supplemental ERPs are acquired from the provider of your insurance and typically extend the coverage for one to five years. Some insurance companies also give indefinite ERPs.
Equipment Breakdown
This type of commercial property insurance endorsement will reimburse you for loss or damage, including equipment repair or replacement as well as time and work, income loss, lost inventory, and other required expenses. The following types of equipment are commonly covered:
Mechanical
Electrical
Computers
Air conditioning or refrigeration systems
Boilers and pressure equipment
Employees as Insureds
If you own a company where your employees drive to help your company, you may be exposed to a considerable level of risk. For instance, suppose you have a post office box and your receptionist goes to retrieve the mail. Unfortunately, some commercial auto insurance policies will not cover your liabilities during this time. If your employee drives for your company, you may be held liable for their activities. If an employee is injured while working for you, you may not be fully protected. Your company auto policy will only cover the vehicle’s use.
Meanwhile, your employee’s coverage will protect them if they use the automobile for personal reasons. When the insurance adjusters begin their investigation, your employee is likely to be caught off guard. You’ll need a staff as insured endorsement to safeguard your staff and yourself. This endorsement will cover your staff even if they own the vehicle. This eliminates the possible gap and can save you and your employees a lot of sorrow and financial hardship.
Fellow Employee Coverage
If one of your employees injures another employee while working for your organization, the person who is at fault will require protection. If your employee causes a car accident that injures another employee, they may have no recourse. This will happen eventually, and when it does, the employee who is found to be at fault may face complete liability. This occurs because most business auto policies do not cover employee injuries. Employee injuries, according to policy issuers, should be covered by other insurance, including workers’ compensation and Employer’s Liability insurance. Employees who are driving a vehicle when they harm another employee may not be protected by their own insurance.
Accounts Receivable
Accounts receivable endorsement can be added to commercial property coverage to protect your small business from financial losses if you are unable to collect money from clients or customers, or if your accounts receivable records are damaged or destroyed as a result of a covered event.
How Much Do Endorsements Cost?
The cost is undoubtedly at the forefront of your attention, as it is with most company products. Here’s an overview on premiums. The cost of additional insured (AI) can range from $100 to $500, depending on the type of AI endorsement. With blanket AI, the insured can add as many AIs as they require, which is frequently close to $500. Individual AIs are normally priced at $100. Limit increases are completely determined by the increasing volume, type of coverage, and level of exposure. Although we’d love to provide more concrete figures, every company is unique. As a result, providing a range without knowing specifics is impossible.
Working With EZ
Your business insurance can protect the company financially and otherwise in the event of a risk. From general liability and commercial property insurance to professional liability coverage, the insurance you choose and the endorsements you add can provide peace of mind for you and your employees. When used correctly, endorsements can be used to tailor your policy to your specific needs. An insurance professional can assist you. Our agents at EZ work with the top insurance providers in the country to locate the best insurance for your company and its employees. In fact, by working with your budget to get you the greatest coverage, we can save you hundreds of dollars per year. If you have any questions about commercial insurance, please contact us at 877-670-3538 or enter your zip code in the bar below to get an online quote now.
Any business can make mistakes, but companies that offer industry specific expert services or consulting are more vulnerable to negligence claims when they make a mistake. If your company gets sued due to a mistake or misleading information, it could hurt both your reputation and your bottom line. Negligence suits are one of the most common and expensive types of claims companies face. Negligence claims fall under two categories, ordinary, and professional. Knowing the difference between the two can help you avoid a costly lawsuit.
Ordinary Negligence
Ordinary negligence is defined as a failure to use ordinary or normal care. It usually refers to a careless error that has caused harm to others. Ordinary negligence can be filed against any business or even individuals. And it is the basis for all personal injury lawsuits. Because they did not follow the duty of care, a person or business could be held accountable for physical or financial harm caused by the negligent mistake. Four things must be proven to establish ordinary negligence:
Duty of Care
The first thing a plaintiff has to prove is that you had a duty of care toward him or her. This usually means that you have a duty to take reasonable care not to hurt the plaintiff. However, states can change this standard of care by law for certain relationships, like a doctor-patient relationship. Usually, a person owes someone else a duty of reasonable care if they can see how their actions could hurt others. For example, a driver owes a duty of care to everyone else on the road by not texting and driving. A store owes a duty of care to their customers by putting a “Wet Floor” sign over a spill. In personal injury claims, duty of care is almost never disputed because it’s just about proving that there was a duty of care owed to the plaintiff, not whether or not it was broken.
Breach
If the client can prove that you had a duty of care to him or her. The next question is whether or not you broke that duty. A breach happens when someone doesn’t act with the same level of care that a normal person would in the same or similar situation. This is where someone needs to prove that you broke the duty of care. Using the examples above for instance, an ideal person wouldn’t speed or drive while drunk. So, a driver who did either of these things would have broken their duty of care to other people on the road. For businesses you wouldn’t ignore a fall hazard, you’d put up a caution sign or rope the area off. If you do ignore it then you’ve broken the duty of care.
Causation
Next, the complainant must prove that your breach caused him or her harm. That is, the harm would not have happened if you had fulfilled your duty of care. Also, the breach must be the direct cause of the injury. This means that the law must agree that the breach is linked enough to the injury to make you legally responsible.
Damages
The last step is for the plaintiff to prove damages. Lawyers and courts say that negligence without damages is “negligence in the air”. For example, a driver who speeds may be guilty of a crime. But if the violation didn’t hurt anyone else, the state can’t hold him or her responsible for negligence. In personal injury cases, plaintiffs often try to get paid for their medical bills, lost wages, property damage, loss of quality of life, and physical and mental pain and suffering. So, say they slipped on the wet floor but had no injury from the fall. While you caused the fall you didn’t cause any injuries that need compensation.
Professional Negligence
Unlike ordinary negligence, the rules for professional negligence usually only apply to businesses that offer specialized skills and services to their customers or clients. When a professional doesn’t do what they should for their customer or client. This can include not doing a job with the right amount of skill and care, giving bad advice, or not acting quickly enough.
Professional negligence can happen in any job. Such as with doctors, lawyers, accountants, engineers, builders, and other people who provide professional services. Professionals are required by law to do their jobs with a certain amount of skill and care. If they don’t, they could be held responsible for any harm that happens to their patients or clients. There are two common types of professional liability:
Breach of fiduciary duty
When you don’t act in the best interests of your client, you break your fiduciary duty. This can include making bad decisions, not giving important information, not telling the client about conflicts of interest. Or pursuing opportunities meant for the company without telling the client, and using insider or non-public information in a stock market transaction.
For a client to make a legal claim for a fiduciary breach, they have to prove three basic things:
There was a fiduciary relationship and responsibility
A breach happened
The breach caused damages to the client
Misrepresentation
Negligent misrepresentation is when you say something that you should have known wasn’t true but didn’t with the intention that your client will rely on it and suffer losses because of it. Some examples of misrepresentation are making false statements or promises in a contract or overstating the value or quality of goods or services. The misrepresentation doesn’t have to be in writing. It can be verbal. It can also mean not telling your client about all of the facts. There are 5 components to prove a misrepresentation claim:
There was an important comment about a certain product. And the comment led the client to sign the contract or make a decision
You knew that the information wasn’t entirely truthful or that you purposefully did not provide all of the facts
You made the statement or gave the advice with the intention that your client would rely on it to make a decision or enter into a contract
The client did in fact rely on that information
It’s not always easy to tell if a comment was a fact or someone’s opinion. And this can be a point of contention in a misrepresentation case. The court will look at how a reasonable person would have understood the information.
How To Avoid Professional Negligence Claims
If you offer the kinds of professional services that often lead to professional negligence claims. It’s important to be proactive and take steps to lower your risk of being sued. Let’s talk about a few of the best practices that could help you significantly reduce the risk of a lawsuit.
Contracts
Whether it’s a new client or an extension of a project you’re already working on, you should always insist on a clearly written contract that explains the nature and the limits of the job. It’s important to include every detail you can about the job. Having a clear contract will lower the risk of a negligence claim because your exact promises or the possibility of certain portions of the contract may not work out are listed.
Expectations
It’s easy to get carried away when you’re trying to get a client by making promises you’re not entirely sure you can keep. Even if you do have every intention of making it happen, there’s always the possibility of things not panning out. This is also a very easy way for a professional negligence claim to come about. Make sure you give your clients realistic expectations when you speak with them about how things will work out. Make sure to warn them about possible negative outcomes as well. This will help you avoid awkward and possibly expensive situations where your client feels they were cheated and should be compensated.
Communicate
It is very important to have clear communication with your client. If you let them know about problems and changes in a timely manner, they will think you are more responsible, even if the news is often bad. Changes that come up quickly and out of the blue may make the client upset and more likely to sue you for professional negligence. Keep in touch with your clients often. Even if you have nothing new to say, let them know that you are still working on their project and are fully committed to it.
Records
Unfortunately, a lot of cases of professional negligence start with “he said, she said” claims. The best way to deal with this is to keep careful records of all the professional services you provide. Email is always better than the phone for making deals and decisions because you can keep track of what was said and what was agreed upon. If you prefer to do business by phone or in person, record your talks with clients. If you don’t want to do that, get an email confirmation of what was agreed upon so you have a copy of what was said.
Learn
Keeping up with the latest changes in your industry will help protect you from professional negligence claims. Also, it’s important to keep up with changes to the way state rules govern duty of care.
How To Protect Your Business
Even when you’ve done everything to avoid a negligence claim, they can still happen to anyone. That’s why it’s important to be proactive and get ahead of possible claims by having a good risk management plan and the right business insurance to protect you. Professional liability insurance, which is also called “errors and omissions” insurance, will cover these kinds of cases. It will protect you financially from accusations of negligence, malpractice, errors, and omissions that could happen while you’re giving your clients professional services.
When a claim of professional negligence is made, your E&O policy will pay for your legal defense, judgements, and settlements up to the limits of the policy. It’s important to know that professional liability insurance is a “claims-made” coverage. This means that the policy had to be in effect when the event that led to the claim happened and when you told the insurer about the claim. Also, it’s important to remember that professional liability plans have things they won’t cover. One of the most common is when a professional does something illegal or hurts a client on purpose.
Call EZ
In general, all of the big insurance companies offer professional liability insurance. If you already have business insurance, talk to your insurance company about the possibility of adding professional liability to your coverage. But working with an insurance agent is your best bet. The agents at EZ are well-trained and work with some of the best companies in the country. We can look at all your policy choices and work with your budget to make sure your business has all the coverage it needs. If you would like to see quotes online simply enter your zip code in the box above. If you would like to speak to an agent now call 877-670-3538 today to talk to get a free quote.
Shopping for insurance for a small business can be difficult and time consuming, especially for new businesses. Your business insurance needs and risks vary a lot more than individual insurance does. Running a business can feel like walking through a trap, where every step could be a mistake. It’s easy to spend too much on some things and forget about important responsibilities. If you own or run a business, you need to make sure you have the right kind of insurance. But there are a lot of plans to choose from, and it can be hard to know what you need. Many business owners make decisions about business insurance too quickly, which leads to problems in the long run. Cutting corners in an attempt to save time and money can actually backfire and cost you more money and time than you bargained for. When you’re shopping for business insurance, avoid these common mistakes.
Shopping By Price
When running a business, it’s important to save money. But picking a cheap insurance policy can end up costing you more in the long run. If you buy business insurance based on how cheap the monthly premiums are, you might not get the coverage you need to cover a claim. And it’s not just for premiums, going for the lowest deductibles has the same consequences. When comparing policies, it can be very helpful to find a nearby independent insurance agent like EZ. An independent agent can get several quotes and give expert information about what is needed in the area. So, talk to your independent insurance agent about how your business is different and ask for a list of plans that fit your needs the best.
Not Reading Over The Policy
Your policy holds important information about your coverage limits, deductibles, and exclusions. The document is most likely long and filled with legal jargon so it may seem tedious to take the time to read all of it, but skimming the policy could lead to a nasty surprise when you try to file a claim later. Before you buy the policy, you should take the time to read and understand the limits and benefits. This way you can ask any questions you may have. Additionally, knowing what kinds of losses aren’t covered lets you know what supplemental coverage you may also need to get to make sure your business is fully protected.
Not Protecting Your Income
When they buy insurance, some business owners put more value on their physical goods than on their profits. Even though disasters like fires and hurricanes cause companies to lose their physical assets, they may also lose money because of the downtime. Depending on your insurance and how your business works, it can be very hard to get back on your feet after a disaster and the downtime that follows. To keep your business from losing a lot of money while you make fixes or move, you must also make up for the lost income. Talk to your agent about income coverage and how to add it to your policy as you protect your business against natural disasters or theft. This insurance will pay you back for any income you lose if you have to close your business because of a disaster.
Not Changing Insurance Providers
Having a dependable insurance company is great, but many people stick with the same company solely because it’s the one they’ve always used. But insurance companies change over time, and if yours begins to change in ways that don’t benefit you and your growing needs then you need to change. Answering a few simple questions can help you figure out if your current company is meeting your business’s needs.
Have my premiums gone up without coverage improving?
Are the services outdated?
Is your insurance company not focused on your specific industry?
If you said yes to any of these questions, you might want to look for a different company that can better meet your needs.
Buying Insurance That Doesn’t Meet Your Needs
Every business is different, and if you choose just a standard insurance to meet insurance requirements, you might not have the right coverage. There’s more to business insurance than just the amount of coverage you have. Your insurance needs to cover the specific risks your industry or clients have. No amount of coverage will help if your policy doesn’t cover the claim you are filing. Talk to your agent about the services you offer and the customers and vendors who rely on you before you buy a policy. Your independent insurance provider can help you find the best business insurance policy for your needs.
Not Adjusting Your Insurance As Your Business Grows
Your business insurance protects your business. So, you shouldn’t just buy your insurance and never think about it again. Your business’s value will most likely be much higher in five years than it is today, and your insurance should reflect that.
Talk to your agent about any changes in your business such as increased revenue, opening new storefronts, buying work vehicles. Then be ready to make the necessary changes to your policy. That way you never have a claim that won’t be covered.
Forgetting About Workers’ Compensation Insurance
Almost every state has some laws requiring workers compensation insurance after you have a certain number of employees, some states require it for even one employee. Your workers are important to your business, and making sure they are safe is a big part of your success. You can also get coverage for companies and workers on a lease. If your workers get hurt on the job and you don’t have Workers’ Compensation, you could get in trouble. Not only will you be responsible for the employee’s medical bills and lost wages, you can also face fines and even jail time for not having workers’ compensation insurance. Not to mention leaving your company vulnerable to lawsuits from the injured employee and their family.
Not Insuring Your Data
The internet runs the world these days, and businesses are no exception. At least some part of your business is likely to require the internet to run properly. That can be anything from your payroll, to client information, to order forms, to contracts. If you use the internet for any part of your business you need cyber liability insurance. This insurance protects your business in the event a hacker gets into your system. Hackers will hold your information hostage for ransom or infect your files. This can lead to lawsuits and losing your business entirely. Having cyber liability will cover any damages and protect you from these hackers.
Being Reactive Instead of Proactive
When bad things happen, insurance helps a lot of small business people. The insurance is bought, thrown in a drawer, and only looked at when a claim needs to be made. This kind of thinking can be more expensive and ignores the valuable risk management tips that can be found when shopping for insurance. Don’t let luck get the best of you. Protect your business and your pocket by learning how to avoid the risks your business faces and keep costs down. Your insurance agent and insurance company should be able to help, whether it’s coming up with safety processes, setting up security measures, or installing a fire sprinkler system. If you take a few precautions, disaster won’t stop your business, and you might even get a discount on your premiums.
Misclassifying Your Employees
Our insurance experts can point out any mistakes you might be making with how you classify your employees that could cause your insurance rates to go up. For example, if you mistakenly label an employee’s job as dangerous, you might be paying too much for insurance because of it. In the same way, if you mistakenly classify a freelancer as an employee, you may spend too much on Workers’ Compensation Insurance for that person.
Buying Too Much Coverage
You don’t want to pay too much for insurance you don’t need. You don’t need to cover your home for $2 million if it would only cost you $500,000 to rebuild it from scratch. This is where a reliable insurance agent comes in handy. They can help you choose the right types of policies, amounts of coverage, and deductibles for your business. They can also tell you where you have double coverage and can save money by cutting a certain policy back.
Working With EZ
EZ can help whether you need group health insurance for your workers or commercial insurance to protect your business. Our agents work with the best insurance companies in the country to make sure you and your workers get the best insurance. In fact, we can find you the best coverage for your budget and save you hundreds of dollars a year. Call us at 877-670-3531 for help with group health insurance or 877-670-3538 for help with business insurance plans. Or enter your zip code into the bar below.
Risk management is the core of commercial insurance. You know you have to protect your business from lawsuits, like if an employee is injured on company property, as well as from disasters such as fire or theft. However, not all damages are physical and not all claims are made by third parties. There are times when you will need errors and omissions (E&O) insurance or employee practices liability (EPLI) coverage. So, let’s examine what these policies cover and where they differ.
E&O Insurance
It’s easy to imagine a construction site requiring liability insurance in the event of an injury, or a supermarket needing a policy to cover a customer who slips and falls in the store. A general commercial liability insurance policy would cover these types of accidents. Product liability insurance would protect against a product’s failure. This is all damage that we typically hear about. However, what about damages that aren’t visible? If your company provides clients with advice or services, you likely need E&O (also known as professional liability). In the past professional liability was for professionals such as doctors or lawyers, whereas E&O was for semi-professionals such as accountants or financial advisors. But now, the terms are used interchangeably. E&O insurance protects you against claims of:
Bad advice
Many clients rely on professionals, such as lawyers and consultants, for sound, practical, and specialized advice. If a client receives advice from a professional and their expectations are not met, the client may sue. A client may file a lawsuit, for instance, if a personal trainer advises their client to do certain workouts or stretches that lead to muscle strains or injuries. Another example, say a hairdresser advises a client to use a certain product for their hair that leaves them with damaged hair or skin problems.
Negligence
When a professional fails to provide the standard level of care they are negligent. A judge may find a doctor negligent if, for instance, he or she fails to review a patient’s chart before prescribing an allergen-containing medication. If a financial advisor disregards all warnings about a company’s financial health and recommends stocks that ultimately fail, they can be sued for negligence.
Slander or libel
If a professional publicly expresses unfavorable or incorrect opinions about their client, they can be sued for slander. False or derogatory written statements are considered libel. Either scenario can lead to a costly lawsuit.
Omissions
An omission is the failure to provide important information that could alter a client’s decisions. For instance, if a real estate agent fails to mention that a home is in a flooding zone or has extensive damage from past problems the new homeowner could sue them for not giving them all of the facts.
Mistakes
Even the most professional people in the world can make mistakes. If a client is harmed or loses money due to an error made by a professional such as an attorney, doctor, accountant etc. They could file a lawsuit even though the error was not intentional.
Cost of E&O
The cost of E&O is determined by a number of variables, including the type of business, its location, and any prior claims you’ve had to pay out. Due to the increased underwriting risk, E&O insurance may be more expensive or have less than favorable terms for a person or business with a lengthy history of litigation issues. On average, E&O insurance can cost between $500 and $1,000 annually per employee.
What It Doesn’t Cover
E&O policies do not cover criminal prosecution and certain non-listed liabilities that may arise in civil court. This includes illegal acts, deliberate wrongdoing, and criminal activity. Typically E&O insurance does not cover bodily injury caused by your business, as this is covered by general liability insurance. E&O insurance also may or may not cover temporary employee’s claims resulting from work performed prior to the policy’s start date, or claims in different jurisdictions. It may also exclude cyber related information leaks, employee injuries, and discrimination claims.
EPLI
All of the above pertains to claims made by clients or customers against your company. However, how do you protect yourself from claims filed by your employees? Employers are protected by EPLI against lawsuits filed by current, former, or even prospective employees. In the same way that you have a duty to keep your customers safe and provide them with the best service, you also have a duty to treat all employees and potential hires fairly. This type of insurance kicks in when allegations are made such as:
Sexual harassment
Discrimination
Wrongful termination
Breach of employment contract
Negligent evaluation
Failure to employ or promote
Wrongful disciplinary actions
Deprivation of career opportunity
Wrongful infliction of emotional distress
Mismanagement of employee benefit plans
Keep in mind, however, that this type of insurance will cover owners, managers, and other employees if a claim is made against them, but will not cover anyone who has intentionally acted illegally.
The cost of EPLI depends on the nature of your business, the number of employees you have, and various risk factors. Such as whether or not your company has been sued in the past for employment practices. The policies will reimburse your business for the costs associated with defending a lawsuit and for any judgements or settlements. Whether your company wins or loses a lawsuit, the policy will cover legal fees. In addition, policies typically exclude coverage for punitive damages and civil or criminal fines. EPLI policies exclude liabilities covered by other insurance policies, such as workers’ compensation.
Preventing Claims
To prevent employee lawsuits, start with educating your managers and employees so that you minimize these problems in the first place. For starters:
Develop effective hiring and screening programs to prevent hiring discrimination.
Post corporate policies throughout the workplace and include them in employee manuals so that everyone is aware of them.
Show employees what to do if they experience sexual harassment or discrimination at the hands of a supervisor.
Make sure that supervisors are aware of the company’s stance on unacceptable behaviors.
Document everything that occurs and the steps taken to prevent and resolve employee conflicts.
What it Won’t Cover
EPLI would not cover claims resulting from intentionally dishonest or criminal conduct such as theft or intentional property destructions. It also does not cover employee illness or work-related injuries as these are covered with workers’ compensation. In addition to intentional or criminal acts, the following situations are typically not covered by EPLI:
Professional errors – If your company makes a professional error you’ll need malpractice or E&O insurance to protect these situations.
Unemployment insurance – Most states have a government agency dedicated to handling unemployment benefits claims, EPLI will not cover these.
Unpaid wages – Typically, failing to pay wages for owed or completed work will not be covered by EPLI policies.
Fines and penalties – EPLI will not cover civil or criminal fines.
Limited EPLI Coverage
In addition, you may find that your EPLI policy provides limited coverage or none at all for certain types of employment practice claims. Below we’ve listed the examples of these situations where coverage is typically limited.
Breach of written employment contract – If any employee alleges that you violated your employment contract, whether the agreement was written or implied (EX: made in conversation) can be important. While most EPLI policies will cover the cost of claims related to implied contacts, written contracts may be handled differently by some policies. Some EPLI policies may cover written contract claims whereas many others will only cover legal defense costs or nothing for them.
Wage and hourly claims – When an employee claims that their employer did not pay them in a timely manner. Since a number of costly and high-profile overtime pay claims have been filed in recent years, most EPLI policies will exclude or specify sub limits for wage and hourly claims because the risk exposure is too great.
Immigration violations – The majority of insurers do not offer EPLI coverage for federal, state, or local immigration-related violations (such as failing to check an employee’s immigration status). If so, it is typically a limited edition (or “endorsement”) to your EPLI policy.
Working With EZ
The world of commercial insurance can be extremely confusing, as it’s filled with a variety of policies that cover a variety of individuals and situations, as well as acronyms for a majority of policies. It’s important to evaluate your needs and get the best protection available. Remember that general commercial liability insurance does not cover everyone and everything, and you may need to supplement your policy with E&O and EPLI coverage.
If you need help making sense of the business insurance alphabet soup, we’re here to help! You will be assigned a personal agent by EZ.Insure, and you will never receive unwanted persistent phone calls. Our agents are highly trained and knowledgeable and will ensure you receive the exact coverage you need. Not to mention, we do all of this for free! To get your free instant quotes enter your zip code into the bar below. Or give one of our agents a call directly at 877-670-3538.
A serious injury at work can have a big effect on you and your business. It’s more common than you might think. So far in 2023, employers have reported 4.26 million non-fatal workplace injuries. Even though that seems like a lot, the number of work injuries has been steadily decreasing. That’s because more and more employers are starting to implement better safety programs. As an employer it’s your responsibility to keep your employees safe. Taking care of safety issues at work might seem expensive at first, but in the long run safe workplaces save more money as well as lower workers’ compensation premiums.
Identify Risks
Before you can get rid of risks at work, you have to figure out what they are first. The GOAL method is one of the easiest ways to find risks in the workplace. GOAL stands for Go Out And Look. Essentially, conduct safety checks regularly. Depending on the risks and types of hazards, inspections can be done every day, weekly, monthly, or quarterly. An important part of these checks is keeping records of everything so it’s easy to follow up. These records should include:
Names of the inspectors
Notes on each unsafe condition/practice
Suggestions to fix the conditions/practices
All inspections should also be looked over by the safety committee and the top managers. They can keep an eye on the cleanup process and look for any patterns in workers’ compensation claims in the operation.
Encourage Employees To Report Issues
While regular safety checks can improve a lot of hazards, nobody knows the potential issues like the workers. Your employees spend all day on the floor and are more likely to notice potential hazards or unsafe procedures quicker. Workers should know how important it is to fix problems when they are reported, and they should be encouraged to notice and report hazards or close calls right away. This lets you fix anything you may not notice during safety checks, allowing you to fix any issues quickly and efficiently.
Offices Have Hazards Too
There are some safety risks that are unique to office environments. Most office workers spend their day sitting which can cause back and neck pain. Other risks like vision staring and wrist injuries can come from typing and answering phones over and over again. There are even fall hazards in the office. These may all seem like smaller injuries but over time can cause long term problems and workers’ compensation claims. Taking breaks can help reduce the chance of getting hurt, but figuring out other ways to reduce these risks is a great way to start making the workplace safer.
Workstation Safety
Not every injury is caused by a single accident. Repetitive stress injuries happen when employees do the same motions over and over again for years. These injuries can be avoided by making sure your work area is set up well. Here are some things to think about when setting up a new workstation:
Make sure work chairs can adjust to the employee’s height. For the best posture their thighs should be parallel to the floor with their feet flat on the floor. This helps employees keep a comfortable posture so they don’t injure their back with slouching.
Allow for keyboard height adjustments. While your employees are typing their elbows should be at a 90 degree angle with their wrists straight. This will help prevent wrist injuries such as carpal tunnel
Purchase adjustable high quality computer monitors. Their computer monitors should be able to adjust so they can keep the monitor at eye level. This also prevents slouching and eye strain.
Preventing Falls In The Office
Whether you believe it or not, falls are the most common kind of accident in the workplace. The most reported common reasons for office falls are:
Tripping over desks, file cabinets, cords, and carpeting
Falling out of broken or unstable chairs
Falls from standing on chairs
Slipping on wet floors
Falls due to poor lighting
The easiest ways to avoid these incidents are things you may consider common sense, but making sure steps are taken is important:
Maintain and fix carpeting and electrical cords
Keep offices well lit and change bulbs that start to dim immediately
Make sure there are no loose objects lying around
Keep walkways clear and ask employees not to leave things like their bags or personal items sticking out
Provide Safety Training
Everyone in the company, and we do mean everyone, from management to the interns, need to be trained in safety protocols. The safety program should also be part of the training for any new employees or when the tasks and possible risks of job changes. Employers who follow safety rules and procedures give their workers safety training, education, and occupational health programs. This way they feel safe when they go to work every day and aren’t at risk for easily avoided mistakes. These safety procedures should be looked at regularly and updated as needed to make sure they are always effective.
Create Emergency Action Plans
Having a plan for what to do when an employee gets hurt will help make sure the worker gets care quickly and help the workers’ compensation claim process go smoothly. Employees should be taught to stay calm, look at the situation, get in touch with the person in charge, and do what they can to help the person who is hurt or sick.
Think Like An Underwriter
Underwriters work for insurance companies, and their job is to decide whether or not they want to cover a certain risk. When your agent sends them the opportunity to evaluate, they will highlight what the business is doing to make it safer so that it looks like a good risk. When evaluating your own business, it can be helpful to think like an underwriter. This can help you see where you might need to tighten up. Think about how you want other people to see your business and work hard to make that happen.
Provide Proper Gear
What kind of personal protective equipment (PPE) your employees need depends on what you do for a living. For example, antibacterial clothes keep people safe when handling food, masks with double-layer panels are used by people who work in health care, and industrial workwear is strong and resistant to fire. Often, an industry association can help you with questions about your workplace. Making sure your employees have the proper PPE will help keep them safe from potential hazards.
Require Proper Footwear
Any job requires that you wear the right shoes. If your workers are going to be outside, they should wear shoes that are right for the weather. Soles that don’t slip are important almost everywhere. Encourage people to wear shoes with closed toes at work, and provide sturdy shoes in places where people could get hurt on their feet.
Perform Maintenance On Tools and Equipment
Did you know that dull knives hurt more people in restaurants than sharp ones? That’s because a dull knife needs more force to cut through food, which makes it more likely that you’ll cut yourself accidentally or get an injury from doing the same thing over and over again, like tendonitis or carpal tunnel syndrome. Your employees’ tools should be checked regularly to make sure there are no broken or worn parts, no mechanical problems, and that everything is working as it should. Do regular maintenance on your equipment to make it last longer and keep your workers safe.
Factor In Your Employees Needs
Stress, anxiety, and tiredness can make it hard for an employee to pay attention, react quickly, concentrate, and do other things. What’s going on in their personal lives may be “none of your business” as an employer, but how it affects them is very much your business. Even though you can’t control what happens to employees on a personal level, employers can take steps to help keep problems from getting worse. Try to cut down on or limit long, rotating, or overtime shifts. Both employees who take on more work and those who don’t get enough sleep are more likely to get hurt on the job. Plan regular breaks throughout the day. Consider starting a workplace wellness program to give employees a reason to do things that will help them stay healthy and less stressed.
Working With EZ
Most businesses are required by law to have workers’ compensation insurance. Having this insurance protects both your business and your employees. Your business doesn’t have to spend a lot of money to keep your employees safe, though. There are many ways to encourage safety routines and programs, all of which will help you spend less on workers’ compensation. If the best practices for claims management are put in place and followed, your employees will be able to go back to work as soon as they are medically cleared to do so. Not only will production get back to normal, but workers’ compensation costs will go down as well.
Come to EZ to get free, instant quotes from one of our licensed agents on the best workers’ comp policy. And if you already have workers’ comp benefits but want to look around for a better deal, we can help you do that. Your EZ agent will know about the rules in your area and be able to give you advice as you look for the best policy at the best price. To get started, just type your zip code into the box above or call us at 877-670-3538 to talk to a licensed agent.
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