Insurance Articles

You’ve probably heard a lot about inflation lately and how you can potentially combat it.

But what’s fact and what’s fiction?

Many economists will tell you not to worry about inflation. That’s because the consumer price index (CPI), which is a widely used gauge of consumer spending, increased 3.6% year over year in May 2011.

While that’s not exactly low, so-called core inflation, which eliminates volatile food and energy costs, increased a relatively weak 1.5%.

That places core inflation below the U.S. Federal Reserve Board’s target of 2% - and the 2% to 2.5% rates prevailing before the financial crisis of 2008 and 2009.

That said, many inflation watchers believe CPI numbers may understate inflation.

Over the past 30 years, the U.S. government has changed the way it calculates inflation. For example, today’s 3.6% CPI would have been more than 10% using calculation methods in place before 1983.

How can you help cushion your portfolio from the potential effects of rising inflation?

You may want to consider an annuity, which is a contract with an insurance company. You make payments in one lump sum or for a certain amount of time.

In return, the insurance company will provide you with payments at regular intervals either immediately or at some point down the road.

While fixed-rate annuities may not seem ideal for inflationary times, it may actually be better to have a guaranteed income stream than to try to invest in asset classes you think could beat inflation. That’s because asset classes can perform differently than we expect them to.

Like all investments, annuities have pros and cons and may work better for some investors than others. Your financial advisor can help you determine if annuities are suitable for your individual financial circumstances.

If you think you don’t need life insurance anymore because your last child has moved out of the house, think again.

Your circumstances may have changed, but there’s a good chance your future needs may require you to maintain your life insurance policy.

Many individuals consider life insurance a way to provide for their children in the event of their early demise.

In fact, life insurance is a way to provide for financial obligations - and empty nesters have financial obligations too.

You may have a mortgage on a home or a second home, for example.

What would happen if you or your spouse died or became disabled?

Would the other be financially devastated?

If the unthinkable happens - particularly if it happens close to retirement - the living spouse may be forced to work long into his or her golden years.

That’s already happening.

According to a study conducted by the Employee Benefit Research Institute, the percentage of workers who expect to retire after age 65 increased from 25% in 2006 to 36% in 2010. Moreover, the percentage who expect to work in retirement increased to 74%.

If that’s what is necessary in the best of circumstances, what would happen in the worst? It’s a good question to ask - and life insurance may be the answer.

Life insurance can help protect your retirement savings, which will ensure that you or your spouse will remain financially secure and your estate will be passed on to your survivors in the event of an untimely death.

Before canceling or reducing your life insurance coverage, you may want to take some time to ask how it might still be relevant and then speak with your financial advisor.

Regardless of your age, there are a number of choices when it comes to life insurance, all of which can be tailored to your unique circumstances.

A lot of baby boomers still haven’t given much thought to the purchase of a long-term-care insurance policy.

However, the cost of a long-term-care need could be the biggest threat to their retirement portfolios.

As of last year, the average cost of a private room in a nursing home for just one year was more than $75,000 - and it’s expected to rise this year to approximately $79,000.

Plus, with an average stay in a nursing home of just under three years, these costs can really start to make a dent in retirement assets.

So is there a good time to purchase long-term-care insurance?

According to a number of long-term-care specialists, the ideal time to purchase a policy is between the ages of 50 and 60.

Typically, this is when people are nearing the end of their working years, and with a 10-year premium pay option, the policy can be paid for, in most cases, long before the coverage is even needed.

Another reason not to wait too long to purchase a policy is because an applicant’s health will play a big factor in whether or not he or she will even qualify for coverage, as well as the premium amount if he or she does.

In fact, it’s been estimated that roughly 20% of long-term-care insurance policy applicants are turned down for health-related reasons.

Certainly, the cost of insurance plays a big part in when to apply for coverage as well.

This is because, on average, even waiting just one more year to apply can cost between 2% and 9% more - and the older an applicant is, the more the premium cost will increase for each year waited.

Although people don’t like to think about having another insurance premium to pay, the amount that long-term-care insurance could actually save a policyholder far outweighs the expense of the premium.

It is estimated that roughly 16 million Americans will purchase temporary health insurance coverage this year. That number includes:

… Those who have been laid off or are between jobs and have found that the cost of Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance is too much

… Recent college graduates who are seeking work but have lost their student health insurance plan

… Those who have lost their dependent status under the health insurance plan of their parents

… Individuals who have recently been discharged from the military

Although most temporary health insurance plans stay in force for up to only 12 months, they do fill a very important gap for those who are without permanent coverage and fear that the high cost of an illness or injury could wipe out their savings - or worse.

It is important to note that most short-term health insurance policies are designed for individuals who are healthy and do not possess any preexisting conditions. These are deemed as conditions or symptoms that the applicant has had during the 36-month time period before the start of insurance coverage.

The premium cost of a temporary policy could be a lot less than most people think, due to competition within the health insurance industry.

And because these plans are often bought in one-month increments, they are easy to cancel at the end of the month when the temporary coverage is no longer needed.

Summer electrical storms are no laughing matter, as lightning causes millions of dollars in damage. Following are some simple steps to reduce your risk and limit damage:

Lightning Rods: Proper grounding and distribution can dramatically reduce damage during an electrical event. Lightning rods have been routinely installed on commercial properties, but it’s just as easy to have them installed in residential areas.

Surge Protectors: Without a doubt, one of the most common causes of electronic and computer failure is an electrical surge. Appliances are at risk, especially newer models with built-in computer chips and electronic components. Installation of whole-house or direct-plug-in-type surge protectors provides an important layer of protection.

Backup Files: Computer data, photographs, digital music and other files can be costly or even impossible to replace. Back up files on a regular basis. For especially valuable data, consider purchasing additional insurance to cover losses or help replace/restore lost data.

Insurance: Many homeowner policies explicitly limit or exclude losses due to electrical storms or lightning. Ask your agent about the cost of coverage for appliances, electronics and computers, as well as the data included on each. Consider a stand-alone policy for sensitive items.

Extended Warranties: Many computers, appliances and electronics provide extended warranties at the time of purchase. Some include lightning protection, while others expressly limit losses due to lightning.

Carefully read the policy prior to purchase to understand what is included.

Life expectancies are at an all-time high, but two-thirds of Americans underestimate how long they’ll live - which is presenting a challenge for retirement planning.

The average life expectancy is 78 years for the first time in American history, according to the Centers for Disease Control and Prevention, and for some it may be even higher.

A healthy 65-year-old man has a 50% chance of living to age 85 and a 25% chance of living to 92, according to the Society of Actuaries.

A healthy 65-year-old woman has a 50% chance of living to age 88 and a 25% chance of living to 94.

If you’re in your 60s, then, you may need your nest egg to last 30 years or more - and that can be a problem.

If you have a $1 million portfolio and obtain a hypothetical annual average return of 7%, you could spend $52,000 per year for 20 years of retirement.

But if that money needs to last 30 years, you could spend only $45,000 a year.

Despite the potential for a longer retirement, retirement-planning strategies haven’t changed much.

That’s because a good financial advisor will use asset-allocation strategies to help protect you from longevity risk.

Those strategies might include adding enough stock exposure to help your portfolio combat inflation, delaying Social Security payments as long as possible and buying a fixed annuity.

A fixed annuity can be particularly helpful because it turns a single lump-sum payment into a stream of cash that extends until death.

Moreover, this strategy is becoming more popular.

According to Beacon Research, sales of fixed immediate annuities were up 2% in 2010, to more than $8 billion.

If you’re interested in a fixed annuity, speak with your advisor.

Your advisor can help you decide if a fixed annuity is suitable for you, given your individual financial circumstances.

Inflation is rising, making some investors reconsider the value of fixed annuities. But fixed annuities can still play an important role in retirement planning.

A fixed annuity is a type of annuity that provides you with a specific sum of money at a fixed rate of return for a fixed period of time. You give a life insurance company a sum of money, and it gives you payouts for a certain period or for life.

Because the rate of return is fixed, it may seem as if fixed annuities would not be ideal for inflationary environments such as the one we’re experiencing today.

While the consumer price index, a widely used gauge of inflation, increased just 0.5% in March 2011, it was up 2.7% year over year. That means you need $102.70 to buy something today that cost just $100 in 2010.

Still, fixed annuities have a number of advantages, including tax-deferred accumulation and guaranteed lifetime income.

In other words, you don’t have to worry about market downturns robbing you of income.

Some types of fixed annuities may also help fight inflation.

Consider the equity-indexed annuity, which pays a minimum interest rate during market downturns while providing a bonus during upturns.

That’s not to say you should put all your money in a fixed annuity. But a fixed annuity, when combined with other inflation-fighting assets, may play an important role in a portfolio.

Starting a small business of your very own isn’t easy, but it is rewarding.

Studies show that small-business ownership is one of the leading methods of building long-term wealth.

Unfortunately, it’s also one of the leading causes of litigation, as owning a small business may increase personal and professional liabilities.

Proper insurance coverage, therefore, is a necessity.

Insurance protects against inherent risk, unanticipated events and even loss of income if you purchase the right policy.

Following are the most essential types of insurance for start-ups:

Umbrella Policy: An umbrella policy is one of the most affordable and essential forms of protection a small-business owner can purchase. Not only does it increase the limits of liability, but it also provides an important layer of protection for your personal assets.

Liability Insurance: Public, employee and product liabilities are major concerns to small-business owners. While an umbrella policy provides a layer of protection against your personal assets, liability coverage protects the actual business assets in the event of litigation. This is especially important because the cost of defending a lawsuit can often result in the demise of a start-up, even if the original charges are unfounded.

Health, Life and Disability: Small-business owners often delay the purchase of health, life and disability insurance, especially if they have a sole proprietorship or partnership. That is often a recipe for disaster. The success of a small business is often directly impacted by the health and well-being of the owner. Without proper coverage, an illness or injury may spell financial ruin.

Auto/Fleet Insurance: Any vehicle used in daily operations of a business should be insured via the small business. Don’t make the mistake of expecting regular auto insurance to cover the business use of a vehicle. In fact, the same applies to computers and other tools or equipment.

Business Interruption Insurance: Business can be interrupted by a number of things, including the loss of a major supplier, natural disasters or even personal injury. Start-ups are especially prone to disruption due to business interruption and often lack the necessary reserves to ride out the financial constraint. Business interruption insurance helps protect against the loss of income related to unanticipated interruptions.

Building and Equipment: Whether you rent or own your own building and equipment, the loss of a location and the need to replace or repair equipment can be costly and time-consuming. Commercial policies reduce the risk by providing valuable coverage in the event of building and equipment-related losses.

Goods in Transit: Many small-business owners are not aware of the risk to inventory or goods once they leave the office or warehouse. The reality, though, is that very few policies provide protection while items are in transit. Instead, a specialized policy is required to provide proper protection until the item is received and the insurance coverage of the other party goes into effect. Goods-in-transit insurance is especially important for small-business owners who send expensive items or large volumes of inventory via mail, cargo or other forms of distribution.

More than 25% of businesses that close due to a natural disaster never reopen, according to research conducted by the Insurance Information Institute. Small-business owners are especially vulnerable. That’s why disaster recovery planning for small-business owners is more important than ever. Following are some tips to ensure that you’re prepared:

Review Your Insurance Options: Loss of income and loss of use of plant and equipment are situations encountered after a disaster. Review existing policies to ensure that you have proper coverage. Most policies exclude earthquakes, fire and flooding, so it is important to purchase riders to ensure that you have full coverage.

Duplicate Data and Important Contacts: Cloud computing is making it easier to back up existing data and important contact information in a secure, off-site location, but it’s important to make sure it is performed on a regular basis and available when needed.

Implement Alternative Work Schedules and Locations: During a crisis, many members of staff may be delayed or unavailable, so it is important to plan ahead. Cross-train employees and provide several alternative forms of communication and work locations, including home, off-site offices and other alternatives. Make sure employees understand how to put the plans into use after an emergency.

Practice the Plan: Disaster recovery should be practiced from time to time. Have a written plan of communication and then actually take the time to implement it on a practice basis from time to time. Allow employees to work from home or other alternative locations, perform duties for which they have been cross-trained, and access information stored off-site.

Everybody wants to reduce auto insurance costs.

Understanding what matters most to underwriters might be the best place to start.

Following are some things to consider:

Statistical Safety Record:

Without a doubt, the most important item is safety, but that includes criteria that may not be obvious.

For example, new drivers tend to have safe records because they haven’t established a history. Therefore, they are unproven. Counter the impact by taking a driver’s education course to show you’re safety conscious.

Experienced drivers should focus on remaining accident-free and abiding by traffic laws.

Demographics:

Gender, age and even zip code have a major impact on auto insurance rates. Some can be dealt with, while others can’t. For example, younger male drivers statistically have more accidents, so they tend to pay more. Likewise, if you live or work in an accident-prone area, expect to see higher rates. Installing an approved security system and parking indoors at all times might help.

Miles Matter:

Perhaps one of the most frequently forgotten criteria is the number of miles driven each year. While you may not be able to reduce the total number of miles driven to and from work or school, it is still possible to reduce the total cost of coverage.

Consider carpooling once or twice a week, taking public transportation or squeezing in a little exercise for quick commutes.

Over time, it all adds up to fewer miles and less costly auto coverage.

Shared Concern:

Last but not least, other drivers that have access to your automobile are likely to impact rates.

In some cases, it is actually more cost-effective to purchase a second vehicle and help pay for an individual insurance policy than include a secondary driver, especially if liability is a major concern.

Keeping track of your belongings isn’t always as simple as it may seem, especially when it comes to providing proof of purchase and value for insurance purposes.

In the event of a claim, it’s important to have an up-to-date inventory readily available. Perhaps the most common method is to write down a list of all items owned, including model numbers, age and condition.

Following are a few ways to keep track of your belongings:

Purchase on Credit: Purchasing an item with a credit card is one easy-to-use method of tracking the acquisition of new items. Depending upon your lender, it may also extend the warranty of the item.

Picture It: When purchasing a new item, take a photo of it and scan the bar code. Software is available online for free to record all the pertinent data, including model number. Be sure to back up the data on a secure storage server on a regular basis.

Keep Records: Expensive items such as art, jewelry and other collectibles may have fluctuating values, so it is a good idea to have a professional appraisal done. Keep a copy of the appraisal plus all photographs in a safe area, and be sure to ask your insurance agent about specialized riders if an item is over the limit for normal household values.

Update Annually: Be sure to schedule an annual update. Eliminate all items that were disposed of during the year and verify new acquisitions. Record the current condition status of items, including repairs, enhancements or other modifications that may impact their value. Make a backup copy to be stored in a secure online location, safe-deposit box or other protected place.

If you think you don’t need life insurance, you may want to reconsider the whole concept.

Life insurance proceeds can help your family members if you die before they do.

Following are some of the items that life insurance proceeds can cover:

Medical and Funeral Expenses:

Chances are you’ll incur significant medical expenses prior to your death, as a lengthy illness can rack up close to $1 million in medical bills.

And even the most basic funeral service is costly.

Do you really want your family to worry about these things when they’re mourning your death?

Debts, Including Taxes:

You will probably die with a number of debts that need to be settled.

Some of these debts include inheritance taxes and related fees.

If your family doesn’t have the cash to pay these debts, they may have to sell your other assets to do so and make ends meet.

Worse, failure to settle these matters promptly can lead to penalties or forfeiture of your estate.

A life insurance policy can provide cash for the settlement of these obligations.

The money from that life insurance policy can help your estate stay with your family.

Income While Your Family Is Adjusting:

If you’re the main provider in your family, your death can diminish your family’s income and force members to lower their standard of living.

Family members may have to give up goals you’d planned together, such as buying a home or going to college.

A life insurance policy can minimize this situation by replacing your lost income - and give family members time to deal with their grief, get back on their feet and find other sources of income.

An insurance agent can help you determine if you need life insurance, and if so, how much is most suitable for your individual situation.

While early retirement - planned or unplanned - can mean no more commute or mandatory overtime, it could also mean no more group insurance coverage through an employer.

And anyone who is age 60 or over but not yet age 65 and eligible for Medicare could be left in a quandary without health insurance benefits.

The good news is that there are some options available, even though one of the most significant factors in qualifying for health insurance is an applicant’s age. In fact, individual health insurance coverage is available to applicants up through age 64½. However, at that point, applicants are no longer allowed to apply for individual coverage, as they will soon be eligible for Medicare benefits.

With this in mind, an individual in the age group between age 60 and 64½ needs to take special precautions to ensure that he or she has health insurance coverage prior to the age restriction. Otherwise, the individual could be left “in the gap” for several months until Medicare benefits begin at age 65. And that could be taking a very big risk.

There are a variety of individual health insurance plans available to those in this age category.

In addition to just individual coverage, applicants could also consider going with a high-deductible health insurance plan coupled with a health savings account.

This could help to reduce insurance premium costs, while still allowing a savings component to pay for some services that may not be covered in the insurance plan.

With so many employers cutting back on insurance benefits for employees, it is becoming more prevalent for individuals to go without coverage.

But the odds of incurring a disability due to illness or injury are still high. In fact, at age 32 the chances of becoming disabled are four times more likely than death. And, with one’s ability to earn an income being an extremely valuable asset, it makes sense to insure it, just the same as one’s home or auto.

When designing a disability insurance policy, there are several parameters that go into the plan. These features can be chosen based on the applicant’s needs with regard to income amount, length of coverage needed and other criteria.

Most individual disability insurance plans will allow an applicant to choose the length of time the person will receive his or her income benefits once he or she becomes disabled. Some common benefit periods are two years, five years or up to the time that the insured reaches age 65. Any disability insurance policy that pays benefits for longer than two years is considered to be a long-term policy.

Applicants may also choose a monthly benefit amount to be received. Typically, this amount will be a factor of the person’s normal wages or earnings. In most cases, the insured will receive a benefit that is equal to 50% to 70% of the person’s regular income earnings.

An individual will also need to choose a waiting period. This can be considered similar to a deductible in that it is the length of time that an insured would need to wait until his or her policy benefits begin to pay. Waiting periods can range from just a few days up to several months or longer. The length of the waiting period will affect the policy premium in that a longer waiting period will result in a lower cost for the policy.

Certain causes of illness or accident may be excluded under some policies, so it is a good idea for those purchasing a disability insurance policy to read all the small print in order to be sure what they will, and will not, be covered for.

Once upon a time, general liability insurance was reserved for a select few business owners in high-risk industries. Today, all that has changed.

Lawsuits are a common threat for large- and small-business owners alike. As the cost of defending a claim continues to increase faster than the rate of inflation, even the most cautious business owners may face financial ruin - even if the case is eventually dismissed.

Fortunately, the solution - general liability insurance - is simple and cost-effective.

General liability insurance is simply a policy that provides additional protection against the assets of a business in the event of an accident, injury or other damage.

The policy typically covers the cost of legal representation and face value of a judgment in the event of a successful lawsuit.

It does not protect the personal assets of the business owner, just the company assets.

Purchasing general liability insurance is fairly straightforward, but it does require a bit of advance planning and preparation.

Following are some things to keep in mind:

For example, an insurance company will need a copy of your business name, industry classification, address and other pertinent information.

An insurance company can help you find the policy that meets your needs, taking into account limitations and exclusions.

It may be more affordable to bundle general liability insurance with a business owner policy if the business requires only a minimal liability policy.

Small-business owners are accustomed to doing annual employee reviews, audits and reviews of existing inventory.

Unfortunately, many forget the most important annual review of all - to look at your insurance needs.

There are several reasons your business might need to increase or decrease insurance coverage.

Following are some of those reasons:

Property and Casualty Coverage: Have you purchased or disposed of property or equipment? If so, it may be time to update your existing policy to reflect changes to capital investments.

General Liability: Expansion of the physical property, new locations and expanded product or service offerings may require additional layers of liability protection.

Health, Disability and Other Employee Benefits: New hires, especially those in critical positions, may change the overall status of health insurance premiums for the entire company. Take time to carefully analyze the needs of employees versus expenses to find the right balance between cost and benefit.

Commercial Auto Insurance: Whether you have an entire fleet of company-owned vehicles or simply use employee vehicles to run errands, take time to audit transportation trends. Be sure to speak with your insurance agent about mileage adjustments, accidents or other changes.

Key Employee Insurance: Critical employees, including the primary business owner, may require special insurance to protect the company in the event of a disability, injury or other situation where specialized knowledge or skill is required, especially if the business plans to seek outside investment or financing.

Umbrella Policy: Savvy small-business owners may want to invest in two umbrella policies - one for the business and one for their personal coverage. Umbrella insurance, also known as excess liability, provides protection against claims that may exceed the normal policy limits. As the business grows, it is important to increase the limits of coverage without breaking the bank. Umbrella insurance allows business owners to reduce risk without making major changes to the primary policy. Instead, the insurance can grow as your business grows, simply by adding an umbrella policy to enhance the existing coverage options.

Workers’ Compensation: Workers’ compensation costs are not set in stone. Instead, they are a reflection of the overall industry, individual record and general classification structure of the company. Doing an annual audit ensures that the latest information remains up to date and potential deductions are taken into account.

Bonds: If your business deals with issues of trust and security, bonds are already a big part of your business. Changes to employee status can have a profound impact on your bottom line and business reputation. Make a point of knowing how employee conduct both on and off the job may impact your company.

Equipment Coverage: Contractors and others concerned with the loss of equipment, vandalism or destruction of property should invest in ample equipment coverage, especially if it is an expensive investment or critical to the operational success of an endeavor.

Extended life expectancies and volatile markets have led many retirees to annuities - and many of them are using a strategy called “laddering” to take advantage of potentially rising interest rates.

An annuity is essentially a contract with a life insurance company.

You pay the life insurance company and it, in turn, guarantees you a stream of income.

With an immediate fixed annuity, you pay the insurance company a lump sum and it promises you regular, fixed payments for life that are usually based on current interest rates.

In today’s low-interest-rate environment, depositing a significant amount of your portfolio in an immediate annuity may not seem wise.

If you believe interest rates will rise in the future, though, you can potentially protect yourself by laddering your annuities.

With laddering, you invest in a number of immediate annuities in stages over a period of time.

For example, you might buy an annuity every year for five years or every five years for 15 years.

This strategy has two potential benefits.

First, if interest rates rise, the annuities you purchase later will be based on a higher interest rate and thus generate a higher income stream.

Second, the older you are when you buy a fixed immediate annuity, the higher the payout you’ll receive.

There are no set rules for staggering your annuity ladder, but in general you may want to consider completing your ladder about halfway between your current age and your life expectancy age.

So, an investor who is 65 and has a life expectancy of 85 may want to complete his or her ladder in 10 years.

It is best to consult an insurance agent to help you determine if an annuity ladder is suitable for your needs, and if it is, construct it so it best meets your retirement income needs.

Many investors approaching retirement don’t think they need annuities, but the lifetime income they offer can add security to portfolios that consist primarily of stock and bond funds. This is particularly important when markets are volatile.

An annuity is essentially a contract with a life insurance company. You pay the life insurance company, either in a series of payments or a lump sum, and it, in turn, guarantees you a stream of income for a specified period, often life.

Annuities have long been considered important retirement planning tools, but today, in wake of the downturn of 2008 and 2009, they’re getting even more attention. That’s because so many investors were forced to delay retirement.

Any market downturn that hits just before retirement, or during retirement, can leave even conservative investors with a much smaller nest egg and little time to recoup the losses.

According to the Financial Research Corporation, a 65-year-old retiree with a $1 million portfolio of stocks and bonds who withdraws an inflation-adjusted $45,000 a year has a 25% chance of running out of money before age 92. On the other hand, if the same retiree invests $600,000 in stocks and bonds and $400,000 in an immediate annuity, and withdraws the same inflation-adjusted $45,000 a year, he or she only has a 6% chance of running out of money before age 92.

In other words, if you invest a portion of your retirement funds in an annuity, you’ll have a dependable income stream for life - and that’s important in a retirement portfolio.

Employment practices liability insurance (EPLI) helps protect small business owners from claims that arise from employees in relation to how the owners conduct their business.

For example, employees might file a claim for discrimination, wrongful termination, sexual harassment or wrongful discharge. With the average settlement for this type of claim now approaching $180,000 to $250,000, it is easy to understand why more small business owners than ever are taking steps to protect themselves from this growing threat.

Following is some information to help small business owners choose EPLI:

Determine Coverage: EPLI can provide coverage for employees, independent contractors and even leased employees as well as third-party providers such as salespersons. Coverage for off-site, remote and independent contractors is especially important, given the lack of direct supervision associated with performance.

Determine Deductible and Other Limitations: EPLI can be purchased in amounts ranging from $1 million to $25 million with corresponding deductible levels. Many policies will also include specific exclusions that limit or omit coverage during events such as a merger or major downsizing. Criminal conduct or other deliberate actions are also excluded.

Determine Your Small Business Risk: Every small business should have a written code of conduct as well as other pertinent personnel policies in place. Your agent may ask to review these before making a final determination on the cost of the policy, so be sure to keep them up to date and reflective of the day-to-day operations and expected conduct of employees. Nonprofit organizations are also at risk.

Determine Effective Dates: Policies are written on a “claims made” basis, and a policy must be in effect before a claim will be considered. Retroactive claims are available only as a special policy addendum and are most frequently used in combination with an acquisition or other unique event.

Annual Review: EPLI may be part of a comprehensive directors and officers policy or a stand-alone policy. It is important to do an annual review. Be sure your insurance changes with the company, including new situations, growth or downsizing, or other unique needs and demands. Ask your agent to coordinate each form of insurance so they complement rather than compete with one another.

Prevention is Still the Best Policy: The very best plan of action is to try to prevent this type of litigation from occurring in the first place. In a perfect world that may be possible, but today even the most diligent business owners face financial ruin from an unfounded lawsuit. According to the Society for Human Resource Management, 57% of respondents to a survey indicated their organization had faced an employment-related lawsuit in the prior five-year period. Even if a business owner wins, though, the owner may still be on the losing side simply due to the cost of defending the company. In fact, it’s not uncommon for employers to settle out of court in an attempt to cap out-of-control costs. By working with a knowledgeable agent, it is possible to develop a plan of action and human resource guide that reduce the bad behavior and unanticipated outcomes that could result in an employee-related lawsuit.

Film insurance used to be a rarity reserved only for big-budget Hollywood films.

Today, all that has changed as film and media go mainstream.

Small business owners, museum archives and even rare family events are just a few of the important types of documentation to be found on film.

Protecting against the loss of a major investment or rare footage is more important than ever, especially given the proliferation of computer imaging techniques capable of altering images with the click of a button.

Following are three tips to help you purchase film insurance:

Consult Your Agent: Ask your agent if you need a stand-alone policy or rider. Depending upon the value, importance, rarity and other factors it may be possible to add a rider to an existing policy rather than purchase an independent policy. Rare footage, significant investments or expensive film projects are often better served by an independent policy.

Decide on Principal Production, Postproduction or Both: Once you determine the need for a film insurance policy, it is important to understand the differences between principal production and postproduction. Principal production provides insurance for the actual creation and shooting of the film, including script, actors or those items that would impact the producer. Postproduction may include major mishaps related to the computer-generated upgrades or modifications used to restore or enhance old archives.

Understand the Risk: Every situation is unique, so it is important to properly identify risk. For example, a business owner may encounter an inadvertent intellectual property infringement or perhaps an especially difficult actor during the filming process. Rough terrain, perilous filming situations, aging or out-of-date transfer of old film archives, or even a 3-D project gone bad can each impact the price, deductible and exclusions of the policy. Film insurance is a specialty product, but one that is exceptionally affordable.