Q: Why should I use a broker/agent when carriers are offering coverage directly to possible insureds?
A: Agents are there to help you. At the most basic level, any agent should be able to answer all of your questions about insurance, provide you with a thorough assessment of your insurance needs and offer you a choice of insurance products to meet those needs. Also, any insurance agency should provide you with prompt, quality service in the case of a claim.
Just as important is the level of professional confidence and personal comfort you feel with the agent. Many people stick with the same insurance agency for decades, even generations. It helps to find an agent you can get to know and trust.
Q: I’m just getting my business started. Do I need insurance right away?
A: Yes, because the chance that you could suffer a loss begins with the first day of business. You can’t get help after the fact. If you suffer a loss and have no insurance or have improper or insufficient coverage, there is very little, if anything, your Mogil Organization agent can do to help you. You must be prepared for the risks that are inherent in any business and the losses, sometimes catastrophic, that they can cause.
Also, many states and local jurisdictions require that businesses be insured to begin operating, especially with workers compensation insurance. And if you rent space for your business, your landlord probably requires that you be adequately insured as well.
Q: Now that my business is established, I think it is time to offer my employees some benefits. What do I need to know?
A: Employee benefits generally include health insurance (sometimes including dental and vision benefits), term life insurance, and possibly a retirement program. Group disability insurance is also available.
Employers can provide coverage for their employees alone or for the employees and their families. Cost is usually the determining factor. With the high cost of health insurance in the United States today, employers are more likely to ask employees to pay some or all of the costs of health insurance for their families and sometimes for the employees themselves.
Q: Is insurance coverage different for different businesses?
A: It can be. Many small businesses are now insured under package policies that cover the major property and liability exposures as well as loss of income. A common package policy used by many small businesses is called the Businessowners Policy (BOP).
Generally, these package policies provide the small business owner more complete coverage at a lower price than separate policies for each type of insurance needed. Your Mogil Organization agent can help you decide which policy or policies are right for your business. Additional coverage for property, liability or perils or conditions otherwise excluded (e.g., flood protection) can be purchased as endorsements to a standard policy or as a separate, second policy.
Q: What types of property do I need to insure?
A: Your business may not possess all the following types of property, but you can use this list to make sure that you have considered all the property categories and any insurance coverage that may be warranted:
- Buildings and other structures (owned or leased)
- Furniture, equipment and supplies
- Money and securities
- Records of accounts receivable
- Improvements and betterments you made to the premises
- Data processing equipment and media (including computers)
- Valuable papers, books and documents
- Mobile property such as automobiles, trucks and construction equipment
- Satellite dishes
- Signs, fences, and other outdoor property not attached to a building
- Intangible property (good will, trademarks, etc.)
- Leased equipment
To establish the amount of insurance you need on each, your Mogil Organization agent can help you review the types of property you own and their uses.
Q: Everybody seems to be suing everybody else these days. What if someone sues my business?
A: No business can afford to be unprepared for a lawsuit. Liability insurance protects your business assets when the business is sued for something the business did (or failed to do) that contributed to injury or property damage to someone else. Liability coverage extends not only to paying damages but also to the attorneys’ fees and other costs involved in defending against the lawsuit-whether valid or not.
The standard businessowners policy provides liability coverage, as does a separate policy known as a commercial general liability (CGL) insurance policy. Generally, commercial liability insurance, whether purchased in a separate policy or as part of a standard businessowners policy, will cover bodily injury, property damage, personal injury or advertising injury. The medical expenses of a person or persons (other than employees) injured at the business or as a direct result of the operations of the business are also covered (up to a certain limit).
Usually excluded from both types of liability insurance policies are suits by customers against a business for nonperformance of a contract and by employees charging wrongful termination or racial or gender discrimination or harassment.
Q: What is business income coverage?
A: Business income insurance may reimburse you for ongoing expenses such as utility bills while your business is closed due to a property loss. This coverage also provides your loss of net income that you would have earned if a covered cause of property loss had not occurred. This coverage may also cover losses due to down time or extra expenses needed to restore operations (such as additional property rental expense)
Q: I keep one auto strictly for business. Do I need a separate policy?
A: Yes. Whether you have one vehicle or several, you will need a business automobile policy. Such a policy covers any motor vehicle used in your business including cars, vans, trucks and trailers pulled by trucks, and offers coverage if they are damaged or stolen. It also covers liability if the business vehicle is in an accident and the driver is at fault. This policy is not for truckers or commercial garages. They have special liabilities and must secure special policies that deal with their different needs. Businesses that have a fleet of vehicles will of course have different needs than a business with one or two, and their policies will reflect these differences.
Q: What if the goods I manufacture are damaged in shipment? Does the shipping company reimburse me or do I put in a claim to my insurance company?
A: Shipping companies often carry insurance to cover their losses. However, the shipping company’s insurance may be too low or you may have difficulty collecting on a claim after signing for the shipment. Therefore, “property in transit” insurance is available to cover your property being transported by truck, rail, ship or other means of shipment. Also, the firm you hire to transport goods and the contract you sign with them may affect your need for coverage.
Q: I work out of my home. Will my homeowners insurance cover my business?
A: Yes, but on a very limited basis. Loss of business property is usually reimbursed up to $2,500 in the house and up to $250 for business property damaged or lost away from the premises. Even if your business is a sideline such as a craft studio, these limits may be too low to cover all the equipment and materials you have accumulated. It’s also important to know that no business liability coverage is included in a standard homeowners policy. Your Mogil Organization agent can help you ascertain what, if any, additional coverage you need. This additional coverage may be added to your homeowners policy or found in a separate commercial policy.
Q: Can I do anything to lower my insurance premiums?
A: Remember that all insurance premiums are based on the risks involved. The insurance company evaluates the situation to determine the risks-or potential for losses-and bases its rates on the results. Therefore, deliberate steps you take to lower your risks not only can help safeguard your business but also may make you eligible for lower insurance rates. Consider these steps:
- Maintain adequate lighting throughout your business premises.
- Keep electrical wiring, stairways, carpeting, flooring, elevators, and escalators in good repair.
- Install a sprinkler system, smoke and fire alarms, and adequate security devices.
- Keep only a small amount of cash in the cash register.
- Keep good records of inventory, accounts receivable, equipment purchases and the like. Consider keeping a second set of records off-site, such as with your accountant, Hickok & Boardman agent or at home.
- Make sure your employees have good driving records.
- Make sure your employees know how to lift properly and use all necessary safety equipment, such as goggles, gloves and respirators.
- Consider using the services of a risk manager. Such an outside consultant can advise you of any safety or environmental regulations you may have overlooked or not been aware of and talk to your employees about safety practices.
- You may also wish to raise your deductible where appropriate to lower your insurance premiums. How high to raise the deductible should be governed by how much you can afford to pay out of pocket. Be careful not to raise it so high that you cannot cover it should a loss occur.
- Finally, make sure your Mogil Organization agent is familiar with your business and the risks inherent in it. He or she should be able to advise you on risk management techniques and their benefits to both you and the insurer.