The 12 Policies Small-Business Owners Need

Small-business owners must be bold, innovative, business savvy, and…protective. Owners bravely put themselves out there in a world of business that involves many risks. Surrounded by potential financial damage, business owners must have the proper insurance coverage in place to protect themselves and their company. Following are the 12 essentials:

Liability insurance: If your business is sued by someone claiming that your company caused them harm, this policy covers damages, including attorney fees and medical bills. Several liability policies offer coverage for more specific circumstances, such as:

Errors and omissions insurance (E&O)/professional liability insurance, which covers liability for recommendations, advice, product design, or physical care. E&O will cover your business if a customer claims you have failed to perform your job properly and, as a result, the customer was harmed in some way.

Employment practices liability insurance (EPLI) pays damages if you are liable for violating an employee's rights. It covers legal fees as well as judgments against you.

Directors and officers liability insurance (D&O) protects company leaders from lawsuits claiming their management of the business violated the rights of others.

Business identity theft insurance: If your business suffers from data theft, this policy covers your legal liabilities. It also provides coverage for costs associated with notifying customers and recovering compromised customer information.

Commercial vehicle insurance: If you use any vehicles for your business, this policy covers damage to the vehicle as well as costs to third parties due to injury or damage caused by your vehicle.

Personal auto insurance: In addition to your business vehicles, you likely have an automobile of your own. You'll also need proper coverage for this vehicle. If it's used at all for business, check with your insurance agent to see what coverage is best for you.

Workers' compensation insurance: This pays for medical care and lost wages when an employee is injured on the job. It's required if your company has more than three to five employees, depending on the state you do business in.

Property insurance: If your business includes a building and/or equipment, this policy protects against theft, fire, vandalism, and other damages. It may include business interruption insurance, which covers your earnings if your business temporarily can't operate.

Life insurance: Do you have loved ones who rely on your business income? This policy pays your beneficiaries upon your death, giving you peace of mind that they'll be taken care of.

Terrorism insurance: Other policies may or may not provide terrorism coverage. Some situations require an additional policy to obtain the appropriate amount of coverage needed.

Business owner's policy (BOP) is a packaged policy that covers many of the previously listed items. This coverage is tailored to fit the insurance needs of your business. Often, business owners can save money by bundling their services in this package. Contact your insurance agent to develop the best BOP for your company.

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

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

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

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

What constitutes insurance fraud?

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

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

Acing the audit

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

Facing Job Loss: Is COBRA the Right Choice for You?

Access to health care is challenging if you lose your job. However, in this situation, the Consolidated Omnibus Budget Reconciliation Act (COBRA) can be a lifesaver.

COBRA allows employees to keep their employers’ plans for up to 18 months after a job loss. And while you’ll pay more for it than you would pay through your employer’s plan, COBRA may actually prove cheaper than alternative health coverage because you receive a lower group rate than with most individual plans.

A number of qualifying events will trigger COBRA coverage. These include the death of a spouse; divorce or legal separation; termination other than for gross misconduct; or a reduction in number of work hours.

Generally, private sector businesses with more than 20 employees, plus state and federal governments, must offer COBRA; these employers also must notify you of your COBRA rights upon job loss. Note that if your children lose coverage due to your job loss, you should find out if they are eligible under the State Children’s Health Insurance Program (SCHIP).

Before you choose COBRA, consider other options. If your spouse has group health coverage, you may be able to join this, even outside open enrollment. You are also eligible for coverage under the Affordable Care Act (ACA). But whichever is best for you, ensure you select it within 60 days.

When faced with a job loss, avoid making a rash decision. However, contact your insurance agent quickly. He or she can examine your options with you and help you make the best choice for yourself and your family.

It’s Vital to Supplement Medicare as You Age

According to studies, 10,000 new participants enroll in Medicare each day. And as baby boomers age into retirement, this groundswell will continue.

It's likely that as we age, we'll eventually need care for chronic and costly medical conditions. If you're approaching Medicare eligibility, you should start thinking about it now. There's information out there, but it can get confusing. So where do you turn to get the facts you need?

Supplemental plans: Because Medicare, which includes Part A (hospital) and Part B (medical insurance), leaves seniors with copays, coinsurance, and deductibles, always consider a supplemental medical insurance policy. A supplemental plan will help defray costs, and most provide prescription drug coverage (Part D). You have many choices of supplemental plans, such as Preferred Provider Options (PPOs), Private Fee-for-Service Plans, and Health Maintenance Organizations (HMOs).

Seniors usually have long-standing relationships with primary care physicians and specialists. To continue to see your current providers, you must choose a Medicare supplement plan that covers your physicians. That's why you should turn to your insurance agent, who can help you choose appropriate coverage levels for a plan that covers these providers…and meets your other needs.

Changing needs: If after a time you find your supplemental plan isn't right for you, you can change plans. For example, if your physician retires or stops accepting Medicare, you may have to choose another physician.

Generally you can make changes only during Medicare's open enrollment period (for 2017, the open enrollment period is from November 1, 2016, to January 31, 2017).

Your agent can help: If you've chosen your supplemental medical insurance plan with your agent's help, he or she will be up to speed on your personal situation and provide options should you have to change plans.

But ensure you start planning soon. November is just a few months away, and things get busy in the fall.

5 Reasons Why Retirees May Need Life Insurance

If you're retired, your house is paid off, and your children are self-sufficient, is there any reason to continue carrying life insurance later in life? Perhaps not.

Generally speaking, life insurance is intended to replace lost income if you die prematurely; if you're no longer working, there's no income to replace.

But before you let your policy lapse, it may be wise to consider a few exceptions.

You're still working. If you continue to work part time during retirement, you may want to protect your spouse from the loss of that part-time income if you die. However, this depends on how much you earn, and how much your spouse needs that income.

You're in debt. If you're still paying off large loans (from mortgages, failed business ventures, and such), you may want to consider a term life insurance policy that will cover the period until the loans are paid off. To minimize premiums, however, ensure you have just enough coverage to eliminate your debt, and that the policy expires at the same time the debt is scheduled to be paid off.

You're still caring for a child. Some children have greater needs than others, even into adulthood. If your child needs ongoing support (such as assisted living or special medical care) you should have sufficient coverage to continue to pay those expenses after you die.

You're leaving a charitable legacy. Some people buy life insurance for the purpose of leaving a charitable legacy. For example, instead of making small annual donations to your college, you might buy a significant life insurance policy equal to the sum of those annual donations, and make the charity the beneficiary.

You're estate planning. Proceeds from a life insurance policy can be an immediate source of cash for your heirs, allowing them to pay funeral expenses and estate taxes without having to sell illiquid assets, such as property.

Dog Bites Person: That Will Be $40,000, Please…

One day, you are sure your beloved Fido could never hurt a fly.

The next, you are shelling out almost $40,000 for a dog-bite claim. Many dog owners can relate to this: last year, more than one-third of the funds paid out for homeowners insurance liability claims was the result of bites and other injuries by dogs. The average cost paid was $37,214. This average has risen by a dramatic 94 percent since 2003, due to increases in settlement amounts and the increased cost of medical care.

With these stats in mind, it is essential that dog owners take steps to minimize those dog-bites-person incidents. Follow these C.A.N.I.N.E. tips to reduce the chance that Fido's actions cause an injury that results in a hefty insurance claim:

  • Consult with a vet or breeder before getting a dog to determine what kind is best for your family and neighborhood.
  • Always keep your dog secured if someone comes to your door. And don't forget to securely fasten your dog's leash before a walk.
  • Never leave young children alone with any dog. And never allow children to disturb a dog that is sleeping or eating.
  • Immediately seek professional help if your dog becomes aggressive. There may be health issues involved, or your dog may simply need more training.
  • Never approach a strange dog (either alone or with your dog).
  • Expose your dog to other animals and people slowly and carefully to develop healthy socialization.

Even with these precautions in place, dog owners should have an insurance policy to cover any potential dog incidents. Homeowners and renter's insurance typically cover dog bites; however, there are some exclusions, so you may need umbrella coverage to increase your limits to an appropriate level. Breed-specific policies are also available.

Check with your insurance agent to verify you have the proper coverage to protect yourself and your pooch.

Don’t ‘Double Dip’: How to Save on Car Rental Insurance

Are you squeezing in one last family road trip before the school year starts? If your vacation includes renting a car, here's what you need to know about insurance, before you sign on the dotted line:

Rental company options

  • Liability: This coverage is usually a low figure, offering the minimum required by the state for liability insurance.
  • Loss damage waiver: Technically this isn't an insurance policy; it relieves you of responsibility if the car is damaged or stolen, and is usually voided if the damage is a result of speeding or driving under the influence.
  • Personal accident insurance: This covers medical bills for injuries sustained by the driver and passengers in a car accident.
  • Personal effects coverage: This policy protects you if items are stolen from your rental car.

Other options: Do you own a car? Is it insured? Typically, the coverage and deductibles you have on your own car apply when you rent one. This can make rental car insurance an unnecessary expense, as you'd be duplicating coverage. For example:

  • Your standard auto policy includes liability.
  • Comprehensive coverage usually covers rental car damage.
  • Your car insurance usually covers medical expenses.
  • Your homeowners or renters policy often includes protection against theft away from home.
  • If you charge the rental, your credit card company may also offer automatic protection.