Use these steps to assess what types of insurance are best for your business, and how to secure coverage to provide adequate protection and minimize risks. The content below is provided by the U.S. Small Business Administration. To learn more about what they have to say about insurance, visit their website.
Assess your risks.
Insurance companies determine the level of risk they’ll accept when issuing policies. This process is called underwriting. The insurance company reviews your application and determines whether it will provide all or a portion of the coverage being requested. Each underwritten policy carries a premium and a deductible. A premium is the price you pay for insurance. Premiums vary widely among insurance companies, and depend on a number of risk factors, including your business location, building type, local fire protection services, and the amount of insurance you purchase. A deductible is the amount of money you agree to pay when making a claim. Generally, the higher deductible you agree to pay, the lower your premium will be. However, when you agree to take on a high deductible you are taking on some financial risk. So, it’s important to assess your own risks before you go shopping.
The National Federation of Independent Businesses provides information for choosing insurance to help you assess your risks and to make sure you’ve insured every aspect of your business. The extent and costs of coverage vary from company to company. Some brokers specialize in insuring specific types of business, while others can connect you with policies specific to your business activities. For example, if you operate a tow truck service, you’ll want to find an agent that can help find policies that specifically cover automotive service businesses. Often specialist brokers can get you the best coverage and the best rates.
Consider a business owner’s policy.
Insurance can be purchased separately or in a package called a business owners’ policy (BOP). Purchasing separate policies from different insurers can result in higher total premiums. A BOP combines typical coverage options into a standard package, and is offered at a premium that is less than if each type of coverage was purchased separately. Typically, BOPs consist of covering property, general liability, vehicles, business interruption and other types of coverage common to most types of businesses. BOPs simplify the insurance buying process and can save you money. However, make sure you understand the extent of coverage in any BOP you are considering. Not every type of insurance is included in a BOP. If your business has unique risks, you may require additional coverage.
Find a reputable, licensed agent.
Commercial insurance brokers can help you find policies that match your business needs. Brokers receive commissions from insurance companies when they sell policies, so it’s important you find a broker that is reputable and is interested in your needs as much as his own. Make sure your broker understands all the risks associated with your business.
Finding a good insurance agent is as important as finding a good lawyer or accountant. You should always look for one that has a license. State governments regulate the insurance industry and license insurance brokers. Many states provide a directory of licensed agents.
Assess your insurance coverage on an annual basis.
As your business grows, so do your liabilities. You don’t want to be caught underinsured should disaster strike. If you have purchased or replaced equipment or expanded operations, you should contact your insurance broker to discuss changes in your business and how they affect your coverage.
Five types of business insurance you should consider in addition to workers compensation.
Insurance coverage is available for every conceivable risk your business might face. Cost and amount of coverage of policies vary among insurers. You should discuss your specific business risks and the types of insurance available with your insurance agent or broker. Your agency can advise you on the exact types of insurance you should consider purchasing.
General liability insurance
Business owners purchase general liability insurance to cover legal hassles due to accident, injuries and claims of negligence. These policies protect against payments as the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.
Product liability insurance
Companies that manufacture, wholesale, distribute, and retail a product may be liable for its safety. Product liability insurance protects against financial loss as a result of a defect product that causes injury or bodily harm. The amount of insurance you should purchase depends on the products you sell or manufacture. A clothing store would have far less risk than a small appliance store, for example.
Professional liability insurance
Business owners providing services should consider having professional liability insurance (also known as errors and omissions insurance). This type of liability coverage protects your business against malpractice, errors, and negligence in provision of services to your customers. Depending on your profession, you may be required by your state government to carry such a policy. For example, physicians are required to purchase malpractice insurance as a condition of practicing in certain states.
Commercial property insurance
Property insurance covers everything related to the loss and damage of company property due to a wide-variety of events such as fire, smoke, wind and hail storms, civil disobedience and vandalism. The definition of “property” is broad, and includes lost income, business interruption, buildings, computers, company papers and money.
Property insurance policies come in two basic forms: (1) all-risk policies covering a wide-range of incidents and perils except those noted in the policy; (2) peril-specific policies that cover losses from only those perils listed in the policy. Examples of peril-specific policies include fire, flood, crime and business interruption insurance. All-risk policies generally cover risks faced by the average small business, while peril-specific policies are usually purchased when there is high risk of peril in a certain area. Consult your insurance agent or broker about the type of business property insurance best suited for your small business.
Home-based business insurance
Contrary to popular belief, homeowners’ insurance policies do not generally cover home-based business losses. Depending on risks to your business, you may add riders to your homeowners’ policy to cover normal business risks such as property damage. However, homeowners’ policies only go so far in covering home-based businesses and you may need to purchase additional policies to cover other risks, such as general and professional liability.
This document is intended for general information purposes only, and should not be construed as advice or opinions on any specific facts or circumstances. The content of this document is made available on an “as is” basis, without warranty of any kind. This document can’t be assumed to contain every acceptable safety and compliance procedures or that additional procedures might not be appropriate under the circumstances. Markel does not guarantee that this information is or can be relied on for compliance with any law or regulation, assurance against preventable losses, or freedom from legal liability. This publication is not intended to be legal, underwriting, or any other type of professional advice. Persons requiring advice should consult an independent adviser. Markel does not guarantee any particular outcome and makes no commitment to update any information herein, or remove any items that are no longer accurate or complete. Furthermore, Markel does not assume any liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content.
Essential Auto Insurance Tips for Canadian Snowbirds
Whether you’re taking your car to the U.S. or leaving it in Canada for the winter, snowbirds have unique auto insurance issues to consider.
Before you leave for the season, it’s a good idea to review your coverage to ensure that you have appropriate and sufficient coverage for your vehicles.
Start by reading your auto insurance policy carefully with regards to travel to the U.S., then call your insurance company or broker to inquire about the details.
While many snowbirds don’t take the time to do this, it can help protect you from potentially devastating financial losses and may even save you money.
Here’s what snowbirds need to know about auto insurance.
Notify your auto insurance company
Find out if you need to notify your insurance company before taking your vehicle to the U.S.
While most insurance providers don’t require you to notify them, some may, and some providers will make a note on your file that you drive to the U.S. every year.
Even if your provider doesn’t require you to contact them, it’s a good idea to connect with your broker to review your policy, as they will be able to point out any coverage gaps or limitations you should be aware of and solutions to improve your coverage.
In some cases, they may even be able to identify ways for you to save money on your policy.
How long is your Canadian car insured in the U.S.?
Most auto insurance companies will insure your Canadian car in the U.S. for up to 6 months, but some providers may provide coverage for longer or shorter periods, so be sure to check your insurer’s time limits and restrictions for how long you can have your car outside Canada.
In some cases, you may have to pay an additional premium to have your vehicle insured outside Canada for the length of time you will be away.
Should you increase your liability coverage while in the U.S.?
Your auto insurance policy includes liability coverage, which helps protect you if you injure or kill another person or cause damage to someone else’s property.
The amount of liability coverage you have will vary based on your policy and province of residence. For example, in Ontario as of August 2019, the minimum amount of liability coverage you can have is $200,000, but most policies typically have $1 million – $2 million in liability coverage.
Before taking your car to the U.S. you should check what your liability coverage is. You may also want to consider increasing it for the duration of your trip for two reasons:
More Litigation and Higher Damage Awards: The U.S. is a more litigious country than Canada and judgement/settlement amounts are often much higher in the U.S. than in Canada.
Accordingly, you have a higher likelihood of being sued in the U.S. and being found liable for damages that exceed the standard coverage limits provided in your Canadian auto insurance policy.
Because Canadians come from a no-fault environment, limits may not be high enough to cover damages assessed against you if you have an accident in the U.S.
Some insurers recommend increasing your liability coverage to at least $2 million when spending time in the U.S., while others recommend increasing your coverage even higher. Speak to your broker or insurance company to see what they recommend.
Foreign Exchange Concerns: The liability limits for your auto insurance policy will be in Canadian dollars, but any damages you are liable for in the United States will be in U.S. dollars.
Because your insurance coverage is in Canadian dollars, the proceeds may not be sufficient to pay for all damages – particularly during periods when the Canadian dollar is weak vs. the U.S. dollar – leaving you vulnerable to being sued for the balance.
Not only can this be damaging financially, but it will also mean having to hire a lawyer in the U.S. to represent you and possibly returning for court appearances etc. which you will also have to pay for.
Check to see if your policy will cover your legal fees or travel costs in these instances.
TIP: While you might think that increasing your liability coverage is expensive, it is often surprisingly affordable and can save you a lot of grief down the road.
Check your Loss of Use coverage
Loss of use coverage pays for the cost of a rental vehicle while your car is being repaired if you’re involved in an accident.
If your vehicle is a Canadian model, it could take longer to repair in the U.S., as some parts may not be readily available, so you may need a replacement vehicle for an extended period of time.
Be sure to check whether your policy has sufficient loss of use coverage if you are in the U.S.
Review U.S. coverage limits and restrictions
In some cases, your auto insurance policy may provide lower coverage limits or restrict certain types of coverage while you are in the U.S.
Accordingly, it’s important to review your auto insurance policy for any U.S. coverage limits or restrictions. And as mentioned earlier, remember that your coverage limits will be in Canadian dollars.
Some types of coverage you may want to review include:
Reimbursement for damaged luggage, clothing or personal items in the vehicle
Death & funeral benefits
Should you suspend your car insurance for vehicles left in Canada?
If you’re leaving some or all of your cars in Canada for the winter that won’t be used while you are away, you may want to consider suspending or reducing part of your insurance coverage on those vehicles to save some money.
Even if you come back to Canada periodically over the winter and want to use your car while you’re home, this may be an option, but you’ll need to speak to your insurance broker to make sure you have adequate coverage while you’re home.
You’ll also want to check with your broker to ensure you maintain sufficient coverage if your vehicle is somehow damaged while you are away, even if you’re not driving it.
Does your auto insurance coverage extend to Mexico?
While most auto insurance policies extend to the U.S., Mexico is a different story.
If you plan on taking your vehicle to Mexico for any period of time over the winter, speak with your broker first to find out what type of coverage you need.
Take your auto insurance company’s number with you
Always have your auto insurance company’s international toll-free number handy when travelling outside Canada. If you have an issue while you’re away, you may have to spend a lot of time on the phone with a claims adjuster.
The Bottom Line
Remember, not all auto insurance policies are created equal. Before you head south for the winter, take some time to review your auto insurance and understand your coverage while outside Canada.
And as always, when it comes to insurance, it pays to shop around so you can compare coverage and pricing.
10 Best Insurance Tips of the Day 2023
Many people have a difficult time understanding the many types of insurance available. The following blog post will provide some helpful insurance tips for the day to help you better understand what is out there and decide which type of insurance is best for your needs.
No one can know exactly what may happen in life, but it’s essential to be prepared just in case!
Best Insurance Tips of the Day
The following are the top 10 insurance tips to keep you prepared should an unforeseen event take place:
- Know your coverage limits.
You need to know your car, home, or business insurance coverage. If something happens that the policy does not cover, you may pay for it out of pocket.
This knowledge will save you money because it will keep you from purchasing insurance you won’t need.
- Don’t wait to purchase insurance.
You may have heard this many times before, but paying for insurance in advance can help protect you from losing a lot of money if the worst-case scenario arises and your home or cars are damaged beyond repair.
Don’t procrastinate; get the coverage you need today!
- Consider health insurance options carefully.
While your employer may provide some healthcare insurance options for its employees, you might still want to consider purchasing additional health insurance that covers prescriptions and vision. These expected expenses can add up if your employer’s health plan doesn’t cover them.
Also Read: Importance of Insurance in Business
- Assess Your Current Financial Situation
You need to determine your current financial situation before you purchase any insurance. For example, if you have a hefty deductible on your homeowner’s insurance, it may be wise to get rid of it and self-insure for smaller items.
- Consult an independent agent
An independent agent can help you understand and compare the different insurance available. With their help, you will decide which type of insurance is best for your needs.
- Always Read Your Policy!
You must read through the policy you purchased from your insurer before buying. This will ensure that you are fully aware of what the policy covers and what you may need to pay for out of pocket should an accident occur or your home or car needs repairs.
- Adjust your coverage as your stage of life changes.
It’s essential to know that your needs will change as you move from one stage to another. For example, your homeowner’s coverage will probably need to increase because of having a family or buying more things for your home.
- Shop Around for the Best Rate
Just because you are with a particular agent or insurance company doesn’t mean you are getting the best rates available. Shop around for your coverage to make sure it meets your individual needs and fits within your budget.
- Be Truthful on the application
If you are currently involved in any lawsuits, accidents, or other incidents affecting your current premiums, it’s essential to be upfront about this information on the application. If you aren’t and your insurance company finds out later (after a claim is made), they may not cover the expenses.
- Save Money Where You Can!
Don’t forget about all the discounts that you might receive. For example, if you have over one car or home on your policy, you can save money on both by purchasing a multi-policy discount from your insurer!
In conclusion, ensure you understand what type of insurance coverage is best for your individual needs, and don’t forget to shop around for rates when you are ready to purchase coverage.