How to Survive Business Interruption

One of the worst possible scenarios for the average small-business owner is the inability to conduct business. It could be due to a natural disaster or something as small as a major supplier going out of business.

Whatever the cause, the impact is clear – a loss of earning potential and inability to fulfill orders or conduct business.

Fortunately, there is a way to prepare for the worst by purchasing business interruption insurance.

This special type of policy provides protection in the event a business is not able to operate or function. It typically will reimburse the business for lost profits and provide additional funds needed to pay continuing expenses, including the need to reopen in a temporary location or the cost to relocate. Unlike traditional insurance policies that cover damages liability claims or damages to property, business interruption insurance helps offset the indirect costs associated with other losses.

Many small business owners find this an invaluable form of protection. In fact, nearly any small business owner who cannot afford to lose an income stream is likely to benefit.

It is becoming standard practice for business partners, suppliers and providers to demonstrate some level of interruption insurance or other accountability in order to become an exclusive vendor.

Otherwise, it’s wise to have a secondary supplier for critical items or services.

Small business owners wishing to compete for exclusive service rights are especially likely to benefit from the additional layer of protection that is offered by interruption insurance.

Think You Don’t Need Pollution Coverage?

Small-business owners who don’t have environmental pollution insurance may be at risk and not even know it, according to industry experts.

Environmental pollution coverage was originally designed to address the needs of corporations involved in large lawsuits or unintended financial hardship related to catastrophic losses associated with spills, leaks or other unanticipated events that impacted the environment and health of the surrounding community.

Today, the list of adverse events has grown to include legal liability for pollution, cleanup costs, loss of income to other business owners, injuries and disruption of services.

Due to changes in the law and a more complex supply chain, even small business owners may be at risk for environmental pollution and related damages. Farmers, trucking and distribution providers, small manufacturers, and even dry cleaners are just a few examples of small business owners that have been hit with big lawsuits due to the impact on the environment.

Waste products and chemical spills are common causes of concern and are likely to impact other small business owners such as contractors and consultants. In fact, real-estate-related concerns are one of the most significant sources of environmental and pollution-based litigation, especially those concerned with remodeling or remediation. Specialty trade and general contractors are all at risk.

Environmental pollution policies can vary widely, but most are written on a “claims made” rather than occurrence basis. Coverage usually includes legal liability, cleanup costs, restoration and development, transportation insurance, storage pollution liability, property transfer, secured creditor, and closure/post-closure related expenses. Both on- and off-site pollution and contamination can be included, with coverage for bodily injury, property damage and cleanup costs.

Small business owners seeking to buy or sell property or other business assets are increasingly calling for environmental insurance policies to be in place prior to the sale. In fact, buyers and banks are likely to back away from a deal without the protection of pollution insurance in place.

Because policy terms tend to be longer than average, it is important to plan ahead. Environmental pollution policies can be difficult to find, especially if there has been a prior claim or certain types of high-risk business associated with the property. Common examples include drycleaners, medical or vet offices, or even gas stations. In fact, even clean sites without a history of spills or toxic chemicals may still encounter problems obtaining coverage due to the adjacent properties, further exacerbating the total extent of the problem.

Finally, changes to reporting by CEOs and other top brass have resulted in renewed interest in pollution and environmental coverage. Under the new guidelines, officers are required to personally sign off on corporate financial statements, including potential liability concerns related to environmental damages.

Fortunately, it’s possible to find cost-effective premiums based upon the specifics of your business. Just ask your agent about environmental pollution protection.

How to Make Sure You Are Insured Against Catastrophes

Does your homeowner policy provide protection against catastrophic events? Most people assume it does, but the reality is often far removed from common expectation. Following are some things you should know in order to obtain the right policy for your home and family:

Catastrophic coverage includes rare events, ranging from wars and terrorist events to sinkholes, earthquakes and other natural disasters. Most insurance policies omit deliberate destruction or social events such as war or terrorist attacks since these events occur outside the normal day-to-day function of society. On the other hand, natural disasters can also result in catastrophic losses to an individual or group of individuals but are within the normal dictates of anticipated events.

Most homeowners will not need every form of catastrophic coverage. Depending upon where you live, some events are more likely than others. For example, Florida residents may be prone to hurricanes and sinkhole damage, but those issues are of little concern to residents of other states.

Sometimes the difference between standard coverage and catastrophic coverage can be difficult to ascertain. It’s vital to speak with your agent to determine the right cost/risk ratio for your situation.

Catastrophic coverage should be purchased as soon as possible because it’s often too late once an event has occurred. Underwriters are not able to write new hurricane policies once a storm is scheduled to arrive.

What to Consider When Buying Term Life Insurance

There are many types of life insurance on the market these days.

One of the most popular is term life insurance.

But figuring out whether you need it and, if so, what type of policy is best can be the tough part of the whole exercise.

Following are some of the basics about term life insurance:

Term life insurance provides coverage for a specified number of years in exchange for a specified premium.

It does not accumulate cash value.

Three main factors should be considered when looking into term life insurance.

The three factors are:

  • The face amount or the type of protection provided
  • The premium
  • Length of coverage

When it comes to the type of protection provided, the most common types of term life insurance include:

  • Level
  • Annual renewable
  • Mortgage insurance

Level term policies have a premium fixed for a period of time that is longer than a year – usually five, 10, 15, 20, 25, 30 or 35 years – although at the end of the term, some policies contain a renewal option. These policies are often used for long-term planning because the premiums remain consistent.

Annual renewable term policies are one-year policies that the insurance company guarantees will be matched or beat – without regard to the insurability of the policyholder, and with a premium that has been set for the insured’s age at that time – upon expiration.

Mortgage insurance policies usually have face amounts that are intended to equal the amount of the mortgage on the residence of the policyholder.

Clearly, life insurance is complicated, so it is best to contact an agent if you are interested in a policy.

Insurance Options for People With Pre-Existing Conditions

Numerous adjustments are already being made to the new health care reforms, and with these come questions about how and when all the changes will go into effect. One of the most hotly debated topics having to do with the new laws is how pre-existing health conditions will be handled.

While many feel the ideas behind President Barack Obama’s plan are good, the number of Americans locked out of obtaining health insurance due to pre-existing conditions may not be as bad as originally indicated. Only about 8,000 people have taken advantage of health insurance options offered to high-risk individuals. Because of that low number, the government has now cut premiums for these high-risk pools and expanded some of the benefit options to entice new applicants.

The truth is, though, that many people with pre-existing health conditions may not even need to rely on the government’s program.

In fact, although there may be some restrictions in coverage, a number of insurance companies will provide health insurance to people with pre-existing conditions.

Oftentimes, applicants will be required to pay higher premiums for coverage, or they may need to undergo waiting periods – sometimes between 12 and 24 months – before having their pre-existing conditions covered. But, before assuming that the options in the health care reforms are the only choice, it is a good idea to check with a good health insurance broker regarding insurance for those with a pre-existing condition.

Medicare Part D: How to Get the Donut Hole Discount

Medicare Part D is a federal program to subsidize the costs of prescription drugs for Medicare beneficiaries.

It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and went into effect on Jan. 1, 2006.

Anyone who is considering Medicare Part D, or those who are current policyholders, may be familiar with the term “donut hole.”

This refers to the range of total spending on prescription drugs where all the costs must be covered by the policyholder out of pocket.

In the past, Medicare Part D policyholders were essentially forced to choose between higher premiums or potentially paying a great deal of money out of pocket in order to bridge this coverage gap.

But as of January 2011, people with Medicare receive a discount of 50% on the covered brand name drugs that they need while they are in this coverage gap, or “donut hole.”

And, they will also begin to pay less for generic drugs.

In fact, after paying an annual deductible of $310 (depending on the Part D option chosen), Part D policyholders will pay a co-payment for their medications, and Medicare Part D will pay its part for each covered drug, until the combined amount – which includes the $310 deductible – gets to $2,840. At that time, policyholders are considered to be in the “donut hole.”

But, whereas previously the policyholders were then required to pay the full cost of their prescription drugs while in the “donut hole,” now they will get a 50% discount on their covered brand-name prescription drugs. And this “donut hole” discount will continue until the policyholders’ total out-of-pocket cost reaches $4,550. Once this amount is reached, the coverage gap will end, and other than some small co-payments, the Medicare prescription drug plan will pay most of the cost of the policyholders’ prescription drugs throughout the remainder of the year.

Why Children Need to Be on a Dental Insurance Plan

Many adults – even those who have quality health insurance coverage – do not add their children to their dental insurance plan. However, this can be a mistake.

Tooth decay is the most common chronic illness found in children. In addition, recent research has linked oral health infections to serious health conditions such as diabetes, lung disease and even stroke.

Overall, serious dental problems in children may lead to other issues such as low self-esteem, long-term depression or stress, and they could even interfere with basic functions such as eating, speaking and swallowing. With this in mind, it is important to include children in group dental plans, if that is an option. Otherwise, pediatric dental plans are not difficult to find. In fact, many can even be found within standard family dental plan programs.

Many pediatric dental plans are geared completely towards the needs of young individuals. In fact, oftentimes pediatric dental plans use dentists who specialize in working with children’s teeth as well as on their other dental care needs.

Placing a child on a pediatric dental plan can also help to ensure they will have fewer problems with their teeth later in life. It is important to have them checked when they’re at an age when they’re susceptible to damage. Meanwhile, a pediatric dental plan can also provide a parent with peace of mind from knowing that, if there is an issue, it will likely be covered with very little out-of-pocket expense.

How High-Risk Drivers Can Cut Insurance Costs

Whether you are shopping for an underage driver or have had more than your share of fender benders, finding high-risk auto insurance doesn’t have to be a hassle.

Fortunately, there are some effective strategies to help reduce the cost without sacrificing coverage options.

The first step is to determine whether you really are high risk.

Auto insurance underwriters tend to have different criteria, so it’s a good idea to understand what your auto policy expects for “preferred” and “standard” drivers.

High-risk drivers tend to have several criteria in common, including being young or inexperienced drivers, having an excessive number of tickets and accidents, or having a history of driving under the influence or other infractions.

In many instances, it is possible to reduce the cost of coverage by taking a few precautions or completing additional training.

For example, young drivers with good grades and graduates of driver education classes may qualify for reduced rates. Those with tickets or other traffic violations may qualify for reduced points by participating in special classes.

When in doubt, ask your agent about other incentives or programs in your area.

Some people are good drivers, but still incur higher-than-average premiums due to other risk factors such as credit scores, lapse of coverage and type of car driven. In this situation it is often possible to make a few strategic changes to help reduce auto insurance rates. Common examples include paying down credit card debt, signingup for automatic insurance renewals and carefully selecting your next sports car.

Some drivers are considered so high risk they are repeatedly denied coverage. In such situations, it is still possible to obtain an auto policy via the state “assigned risk” pool. Since this is often the most expensive option, it is a good idea to speak with your agent about other possible alternatives before making a final decision.

Health Insurance Options for Americans with Diabetes

Diabetes is a chronic condition that affects more than 20 million Americans. There are different types of diabetes, including type 1, type 2 and gestational.

Type 1 is diagnosed primarily in children and younger adults. Type 2, the more common form of diabetes, can be diagnosed at any age. Gestational diabetes, occurring in pregnant women, is more of a temporary condition and typically goes away once the woman has given birth.

A great many diabetic individuals are uninsured, which severely limits the options they have available for treatment. It also leaves them at risk for additional complications such as heart disease, stroke, kidney failure, blindness and even lower-limb amputation.

It is important for diabetics to obtain health insurance coverage in order to help control both the diabetes itself and the additional issues it can cause. Since this lifelong condition requires ongoing treatment, a good health insurance policy can help pay the high cost of ongoing medications, regular doctor visits and other procedures.

There are several things to look for when shopping for a health insurance policy for someone with diabetes. Make sure the policy will cover treatments for medical conditions that are associated with diabetes. Also be sure to consider coverage that will help pay for pharmaceutical needs such as insulin shots and other medications. And get more than just one policy quote, as even very similar health insurance plans may have vastly different premiums.

How to Shop for Commercial Auto Insurance

Obtaining commercial auto insurance coverage can be confusing.

Following are some ways to take the sting out of shopping for insurance:

1. Take Inventory: Take time to evaluate current coverage options and needs. Make a list of all automobiles and vehicles used in the course of your business, including personal use of company cars and business use of private vehicles. In general, it is better to be safe than sorry when allowing the personal use of a company car or the business use of a private vehicle. When in doubt, buy commercial coverage. Keep track of:

  • Make and model of all vehicles and percentage of time used for business purposes.
  • Type of business, name of business, industry and clients served.
  • Ownership of each vehicle.
  • Driver of each vehicle.
  • Primary business use of each vehicle and location.

2. Evaluate Options: There are several coverage options available when selecting commercial auto coverage. For example, you need to think about fleet insurance versus individual auto policies. In general, fleet insurance tends to be more cost effective for larger needs, but it often depends on the total number of vehicles, usage patterns and other criteria.

3. Ask About Discounts: Commercial auto coverage can be reduced via careful planning and preparation. Ask your agent about discounts for any of the following which may apply:

  • Safe drivers.
  • Type of vehicle.
  • Higher deductibles.
  • Anti-theft and other safety devices.
  • Location of business operations, parking and off-site storage.
  • Number of prior claims.
  • Coverage limits and exclusions.

4. Consider the Name: Deciding how to list the insured driver isn’t quite as simple as it may sound when working with a commercial policy. Depending on the type of business, ownership of the vehicle and even status of the driver, the insured party needs to be specified in the policy. Be sure to speak with your commercial auto insurance agent to assure the name of the insured is properly recorded when purchasing or amending a policy.

5. Liability Limits:
Commercial auto coverage typically includes higher liability limits. For example, even $1 million or more might not be sufficient, especially if your business deals with transportation of vulnerable populations, hazardous materials or expensive items. Ask your agent about liability limits and other special considerations.

6. Additional Options: Many small business owners find it helpful to purchase additional layers of protection when buying a commercial auto policy.

7. Equipment and Addendums: Do not make the mistake of assuming that all equipment is included in the standard commercial policy. Specialized vehicles that hold equipment, generators or other attached machinery may require additional coverage addendums.

Coverage Options for Portable Technology

Outfitting a small business is costly, so it should be no surprise that insuring the tools you use every day like laptops and cell phones is a top priority among savvy business owners.

A common misconception is that the cost of replacing an item doesn’t justify the expense of insurance; however, new tablets and laptops can cost hundreds of dollars even before specialized software or other programs are included in the equation.

Lost productivity and wasted time associated with missing equipment is also a major consideration.

Ask your agent about current coverage limits and exclusions for portable technology and other devices.

Be sure to explain how, when and by whom an item is used.

For example, a company-owned laptop used on the road and at home by a staff member may require different coverage than a cell phone. Newly emerging technology such as an iPad or tablet may need specialized documentation, depending upon the method of connection.

Don’t assume coverage extends to other countries or even states. Instead, ask your agent about portable equipment coverage that extends to the areas you need most, especially for employees that travel out of the country.

It is also a good idea to inquire about equipment checked as baggage to assure complete coverage.

Enhanced options often provide an additional layer of protection against data loss, damage by computer virus or even liability concerns due to theft or physical loss of hardware.

Health Insurance for High-Risk People

If someone is considered a high-risk individual when it comes to health insurance, it can really hurt his or her chances of obtaining the proper coverage.

Applicants who are considered high risk include those individuals with chronic health conditions such as diabetes or a heart ailment.

Others could be considered high risk simply for going to the doctor or hospital frequently.

In some high-risk cases, the applicant will be completely denied coverage. In other instances, even if the applicant is approved for coverage, the cost of the policy will likely be substantially higher than a comparable policy for a healthy applicant, or their coverage will be severely limited.

One solution for these individuals is to obtain high-risk medical insurance through their state.

There are 30 states that offer high-risk health insurance pools.

Unfortunately, those that opt for this may find that the coverage in a state-sponsored, high-risk pool is less than adequate to cover their health care needs.

The good news, though, is that there are a number of new health insurance products available on the market today that are geared specifically toward those who fall into a high-risk category.

Even those with chronic health conditions may be able to obtain quality health insurance coverage for less than they originally thought was possible.

In addition, many of these plans offer additional benefits, such as coverage for hospital stays and prescription drugs.

Even some of the top health insurers in the country are now offering these special high-risk health insurance plans.

If you are an applicant with a chronic health condition, it may take some additional shopping.

However, there are plans available that will allow the security of comprehensive health insurance coverage as well as peace of mind.

What to Consider When Buying Life Insurance

If you’re thinking about putting together a solid financial plan, it may be a good idea to consider life insurance, depending on your individual financial circumstances.

Following are 10 important things to think about when purchasing a life insurance policy:

1. Life insurance may seem complicated, but all policies fall into one of two basic camps. Pure term policies are insurance only, meaning you pay a premium and the policy pays out a certain amount when you die. Whole policies combine term policies with an investment product. They also build cash value.

2. Whole life insurance may be right for some people, while others may prefer to keep their investing and insurance separate. On one hand, you can keep whole life policies the rest of your life and build up cash in them tax-free, which can then be borrowed from. On the other hand, they usually cost more.

3. Because whole life insurance is often more expensive than term life insurance, many people who buy whole life
insurance often buy too little, leaving them underinsured.

4. Always buy enough term insurance to meet your needs. Life insurance is no place to skimp.

5. Be sure the term of the policy meets your needs. You’ll most likely want the policy to last as long as you have dependents.

6. Buy insurance when you’re young and healthy. Rates usually rise for older individuals and those who are in less than optimal health.

7. Don’t buy unless you have dependents. Life insurance is about protecting the people you leave behind.

8. Tell the truth when you apply for coverage. If a claim is made, the insurance company will investigate.

9. Compare policies. Buying life insurance has never been easier, thanks to the variety of options available.

10. Consult your advisor. He or she knows your financial circumstances and goals and can help you select the best policy.

What You Should Do After an Auto Accident

It’s an unfortunate fact of life that, despite the best of intentions, accidents still happen.

What you do after an accident, though, can make a difference, especially when it comes to filing an insurance claim.

Following is a handy checklist of three things you should do following an accident:

Remain Calm and Call for Help: Even the smallest fender bender can feel like a frightening experience, so the very first step is to pull over to a safe area. Make sure you and the other driver are not in imminent danger and then call for help.

Gather Documents: While you wait for the police, take time to exchange information, including contact details, make and model of the vehicles, license plate numbers, and insurance carrier. It is also a good idea to collect the contact information of any eyewitnesses that may have seen the accident.

Just be sure to avoid placing blame or taking responsibility for the accident. In fact, it’s best to speak directly to the police officer in order to avoid unpleasant accusations or other potential problems. If possible, take photographs of the accident before the vehicles are moved.

Ask Your Agent: Once the police report is completed, it is time to contact your auto insurance agent – the sooner the better. Not only will doing so help assure a timely resolution to the claim, but your agent is often able to assist with towing, rental replacement and other urgent needs to put you back in the driver’s seat as soon as possible.