Owning and operating commercial

Drive to Succeed by Lowering Vehicle Risks   vehicles comes with a variety of responsibilities and expenses. Insurance is one of these.

Your commercial insurance agent is the best resource for determining what policies will best meet the needs of your business and what discounts may be available. But what many business owners don’t realize is that once your coverage is in place, there are many additional steps you can take to protect your assets and employees. These can help you reduce accidents, keep insurance premiums lower, and save precious time and money.

Consider the following risk-reducing measures:

Business-only – Limit the use of business vehicles to work-related travel only.

Phone-free zone – Texting and talking on cell phones are common causes of accidents. Establish and communicate a corporate policy of not allowing phone use while driving.

Mandatory seat belt use – This is the law in most states. Require all employees to wear seat belts.

Zero drug and alcohol tolerance – Even one drink can impair driving abilities. Make it crystal clear to employees that there is no drinking while or before operating company vehicles. (And, of course, that also includes recreational drugs.)

Secure vehicles – Park vehicles in well-lit, secure areas, and require employees to lock them at all times. Also consider alarm systems for company vehicles. (A bonus: car alarms may also lower your insurance rate.)

Healthy pace – Don’t push yourself or your employees. Drivers in a hurry are more likely to cause accidents. Allow plenty of travel time between jobs or appointments.

Background checks – In addition to screening for criminal history, check all employees’ driving records. If an employee has a history of violations or accidents, do not allow him or her to operate company vehicles.

Best behind the wheel – Consider employees’ personalities when assigning driving duties. Does anyone have a bad temper? Is someone impatient? These traits can increase risk of accidents. Choose employees who will be the best drivers to entrust with company vehicles.

Drivers’ education – It can be helpful to provide a refresher course to anyone who will be driving company vehicles. Proper safety practices regarding backing and following distances should be covered in these courses.

Specialized training – If your business uses any specialized vehicles, ensure individuals operating these machines are properly trained and licensed or certified. Don’t make exceptions, even if another employee could step in to cover for a missing employee or in times of heavy workloads; if they aren’t qualified, they don’t use the vehicle.

Scheduled maintenance – Ensure your vehicles are well maintained. Require all employees to report any suspected maintenance issues. Preventive maintenance and timely repairs will increase vehicle longevity and decrease costly last-minute repairs and accidents.

Driver rewards – Make efforts to recognize safe drivers. Reward those who remain accident-free for a certain period of time. If the entire company has an accident-free period, celebrate.

Regular review – Check with your insurance agent every six months to ensure your coverage is appropriate. You may be eligible for discounts for safe driving or green vehicles. Be sure to ask.

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

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

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

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

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

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

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

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


Your Identity Is Precious: Secure it, Insure it or Lose it  

Chances are you don’t want to share your identity with the myriad thieves and con artists lurking on city streets and Internet alleys. Victims of identity theft suffer financially and emotionally, often facing the consequences of this criminal action for years. And it could happen to you.

When your identity is stolen, the thief will pretend to be you and use your personal information to help himself or herself to your bank account or make purchases on your credit card; even worse, he or she can also set up insurance policies, take out loans, and buy a home. All in your name.

To protect yourself against such schemes, start with insurance. Some homeowners policies include identity theft coverage, but most often this coverage is a stand-alone policy or endorsement. Typically, for an additional $25 to $50 per year, you can get coverage to reimburse you for the cost of restoring your identity and repairing credit reports. While the proper insurance can help if your identity is stolen, you should protect it diligently so you won’t need it. Take the following steps:

  • Don’t discard ATM receipts in public containers or leave them where they could be taken.
  • Use caution when shopping online.
  • Install and update anti-spyware and antivirus programs on your devices.
  • Monitor your bank account activity and credit card statements carefully.
  • Check your credit report annually.
  • Use strong passwords online.
  • Shred documents that contain personal financial information.
  • Minimize the personal information you carry with you in your wallet or purse.

Is Homeowners Insurance Tax Deductible?  

This month is tax time – an annual ritual in which taxpayers search for every possible savings to help reduce their taxes, including deductions for eligible expenses. Is homeowners insurance one of these?

Although many people believe it is, the short answer is no. However, some exceptions do exist and partial deductions may be possible.

Rentals: Rental homes are the most common exception. You may deduct all of the property insurance for homes used exclusively as rental properties. If you rent out part of your home and report the rental income, you can deduct your property insurance as a business expense on the portion of the home you rent out.

Business: Do you use part of your home for business? You may be eligible to deduct some of your homeowners insurance, based on how much of the home is devoted to business use. This can be tricky, so it’s best to leave calculations to an accountant.

Loss: If you made a claim for theft or other damage on your homeowners insurance policy during the current tax year, you may be able to make a partial deduction. If your insurance was not sufficient to cover losses, you may be eligible to deduct the difference between actual cost and your settlement.

Itemizing: You must itemize on your tax return to take advantage of any of these insurance deductions. But itemizing may make you ineligible for other types of deductions. Consult with a tax expert to decide which approach to take so that you will gain maximum benefit.

Check with your insurance agent to verify what out-of-pocket insurance deductibles, premiums, or other insurance costs you have incurred over the year to see if you’re eligible for deductions.

It’s also beneficial to have a professional prepare your return or check it, cost notwithstanding. The good news? Next year, you can write off the cost of hiring the tax preparer.

You May Want to Stick to Life Insurance Basics

Life insurance is often presented to older, successful investors as a means of saving additional money for retirement. But is this a good option for you?

First, it’s important to understand how life insurance works. Traditionally, you buy a policy for its death benefit.

In other words, it is designed simply so that it will pay a sum to your loved ones upon your death. That sum will cover lost income and/or end-of-life expenses.

But life insurance can also be used for retirement planning.

When it’s working as it should, you buy a policy with underlying investment vehicles, and the cash builds up over time.

Eventually you reach a point where you no longer need to pay premiums. Then, when you retire, you can withdraw cash from the policy in the form of a tax-free loan – a loan you never have to repay.

When you use life insurance for retirement income, the only consequence is a reduced death benefit. Which, depending on your circumstances, you may not be concerned with.

This approach can work for many individuals, but success isn’t guaranteed.

The underlying investment vehicles might not perform as well as expected. And if you go about it the wrong way, your withdrawals can trigger a tax penalty.

So before using life insurance this way, you may want to ensure you’ve exhausted other alternatives first. Have you fully funded all available qualified retirement plans, such as 401(k)s and IRAs? Have you looked into an annuity?

If you do want to consider life insurance as a retirement-savings tool, it’s a good idea to talk to your advisor before you do.

He or she can help you investigate the quality of the underlying investments in the policy you’re considering, ensure that you understand the fees, and monitor the policy for you to ensure it’s performing as intended and that there are no undesired tax events.

Offset Increased Drug Costs by Shopping Smart  

Drug costs are rising – recently the cost of Medicare Part D prescription drug plans increased by 8 percent – but controlling the cost of medications can help offset these premium increases.

The first step is to talk frankly with your doctor, who may not know your financial situation. Explore your drug cost options, including a switch to a generic drug.

If you’re on specialty drugs, your doctor may have coupons for them. Also, many manufacturers of high-cost drugs offer a co-pay waiver plan. Ask your doctor, who also may be able to contact the manufacturer directly on your behalf.

Your health insurer may offer or require use of their partner mail-order pharmacy. When you’ve ensured the medication works, order a 90-day supply to save money.

If you shop at a drugstore, the cost can vary: shop smart with online help and don’t be shy about asking for cash discounts at your local pharmacy.

Many stores offer a reduced price through a membership card, and the Consumer Reports website has an online tool to compare drug costs. Individuals on Medicare with extremely low incomes may qualify for Medicare’s Extra Help program, which reduces their drug spend.

One of the best ways to cut drug costs on Medicare is to shop your prescription drug plan during open enrollment. Plan to consult your insurance agent before the busy open enrollment season next October. Your agent can help you compare your drug costs by plan so you can make the best choice for the medications you’ve been prescribed.

Ensure You Get the Most from Your Health Plan  

Every year, Americans are faced with budgeting for expected health care costs. Here’s how to ensure you get the most from your health coverage:

  • Review the explanation of benefits (EOB), which describes the treatments and/or services the insurer paid on your behalf. You can review the EOB online soon after each visit.
  • Know your deductible – the amount you must pay before your plan kicks in. It usually starts on January 1 of each new year. If you’ve selected a large deductible, it may take time to reach that point, but be sure your provider still submits the treatment on your behalf. Mistakes happen, and not applying every visit and treatment toward your deductible can cost you.
  • The out-of-pocket limit caps the amount you pay per calendar year for your share of covered costs. It’s critical your insurer apply all your medical costs, with the exception of uncovered services, to that limit.
  • Your co-pay is the set dollar amount you pay the provider when you receive treatment, such as $25 for your primary care physician (PCP) and $50 for a specialist. To control costs, ensure you see your PCP first unless you need emergency treatment. If possible, visit urgent care centers, which have lower co-pays than ERs.
  • Coinsurance is your share of a covered service and ranges from 70 to 90 percent. The allowed amount is the reduced rate the insurer pays your provider. For example, if the provider bills $800, and the insurer’s agreement allows $170, you owe the percentage of coinsurance on $170, not $800. If your provider is out-of-network, you pay the difference between the allowed amount your insurer pays and the balance. Once you’ve reached your deductible, coinsurance no longer applies; co-pays continue.

Ensure you get the most from your plan by monitoring it regularly. And contact your agent if you have questions.