BUSINESS INSURANCE INFORMATION
BY ALAN PLAFKER, PRESIDENT & CEO
MEMBER BROKERAGE SERVICE LLC
A MELROSE CREDIT UNION SERVICE ORGANIZATION
Business Owners Package Coverage: Essential to Protection for Small Businesses
Like any other commercial venture, small businesses need insurance - property coverage, liability protection and more. But, have you considered a business owner’s package? Instead of purchasing separate property and liability policies, small businesses can combine them into one policy for a potential bargain. A Business Owners Policy, or BOP, can be a good way to get basic coverage, particularly for new businesses.
BOPs offer property insurance and general liability coverage with many of the same options (named perils/all-risk, etc.) as individual policies. BOPs will include business interruption insurance, as well, to cover lost income and extra expenses resulting from damage to your business property. In addition, coverage could include the breakdown of equipment and crime coverages such as employee dishonesty, forgery and loss of money and securities.
Mind the gaps
BOPs are a great way to get a broad base of coverage quickly and easily, but they’re not necessarily everything you need. For example, they do not include professional liability insurance for claims of errors, omissions or negligence in your business.
You’ll also need separate policies for other types of coverage such as automobile insurance and workers’ compensation.
Give your agent a call to discuss whether a BOP is right for your business and to plan for risks specific to your particular business.
Is your business in danger?
The U.S. Senate, the International Monetary Fund, Lockheed Martin Corp., Citigroup Inc., Google Inc. and Sony Corp. - these are a few of the many entities which have been victims of hacking or data breaches.
And you don’t have to be big to get hacked. Hackers now target small businesses because their computers and phones tend to be used for both business and personal matters, and because small businesses do not have the IT staff to constantly monitor and protect their operations. But since these are not publicly traded companies you do not tend to hear of
the breaches.
Rest assured, they do happen and are happening currently. It is becoming more and more necessary for small businesses to invest in cyber liability coverage for a variety of reasons not the least of which is the degree of sensitive information that they collect and hold. Smaller companies tend to operate on tighter margins. When a data breach occurs, one of the requirements for you, the business owner, is to monitor clients’ credit for possible fraud. Recent studies have determined that the average annual notification and monitoring charge for each client whose information has been breached is approximately $225 per year.
If your business was breached and data from 10,000 customers or clients was “stolen,” you could be on the hook for $2.25 million dollars. Are your reserves such that you would be able to absorb that? Let’s not forget the loss of trust of your clients many of whom would probably move their business away.
Cyber liability coverage is becoming more and more accessible and, more importantly, affordable. It’s not time to sit on the sidelines and assume it will never happen to your business. Being reactive always costs more in the end than being proactive.
Call your agent for information on a cyber liability policy for your business.
Did you know your parking lot can cause you to be sued?
Drive by almost any parking lot on a warm evening and you’ll see children of all ages skateboarding, roller blading, playing ball and riding bicycles. Harmless fun? What if a child is injured while on the lot? When it’s on your company’s property the harmless fun looks more like a liability.
You can best protect yourself and your business from liability by not allowing neighborhood children to play in your parking lot. If that response is not a practical option for you, here are some suggestions as to what you can do to minimize the risk of liability:
Liability insurance protects your business assets in the event you are sued. It will not only pay the cost of the damages but also the legal fees and other costs associated with your defense in a lawsuit. The expenses of defending yourself against such claims in court can be substantial regardless of whether or not the lawsuit has merit.
With lawsuits overrunning the courts, maintaining a proper amount of liability insurance to protect your business is just a smart idea. Call your agency. Together you will make sure you have the coverage you need—just in case.
Do you hire bad drivers?
Every time you request a quote on your fleet insurance the insurance company will request the name, date of birth, and driver’s license number for each of your drivers. Why?
This information forms the insurance carrier’s picture of your overall fleet operation. If you have bad drivers then your fleet will not be considered a good insurance risk. And this can mean higher premiums.
The expense of bad drivers may present itself in many ways. Your accident rate might be higher than average; your operating costs might be higher than average; and you might suffer higher than average vehicle downtime. This is costly for both the insurance company and for you.
The definition of a bad driver varies depending on the standpoint of the employer or of the insurance company. The employer’s idea of a bad driver may be one who does not deliver loads on a timely basis, does not take care of the vehicle, or has no respect for authority. The insurance company views a bad driver differently. The insurance company is concerned with who has accidents and why. Their definition of a bad driver is one who has a history of speeding tickets and/or accidents, is inexperienced, or who drives aggressively.
The following ideas may help to avoid the risk of hiring a bad driver:
If you hire your drivers carefully, you may save money on your insurance premiums. Give your agency a call.
Be prepared for a catastrophe
As the recent hurricanes and flooding throughout the Northeast demonstrated, catastrophes can occur with little or no warning and can take a major toll on local businesses. In the wrong conditions, businesses may be destroyed or forced to close due to damage to their property and/or surrounding area hitting the firm with huge financial losses. In addition, some businesses may not have the right kind of insurance or enough to cover their losses which will make it difficult for them to recover quickly.
Insurance plays a major role in the recovery of a business after a disaster. There are several things to consider when putting a recovery plan into effect. Remember that you will likely recover from a disaster more quickly when you plan in advance by purchasing the right insurance and when you develop and maintain a strong recovery plan.
Call your agent’s office before you’re faced with a possible catastrophe. They can help you determine what type of coverage will best suit your business needs.
Disaster fraud is a real threat
When a disaster strikes your business vulnerabilities seem to surround you. Unfortunately, some contractors or insurance adjusters will try to take advantage of your weakened state. By following certain guidelines, however, you can safeguard yourself.
First, seek out established, local contractors and adjusters with good references. Always get multiple bids, and remember, the lowest bid is not necessarily the best. Also, during your search, make sure your applicants are licensed. Be wary of people from outside the area, or those who are offering their services door to door.
In terms of payment, there also are some common sense steps you should take to protect yourself. Never pay in cash—a paper trail will protect you. Additionally, paying the entire sum up front is not advised. A contractor or adjuster might vanish or shirk his or her duties after receiving full payment. Instead, pay a fraction of the bill up front with the rest to be paid upon successful completion of the job.
Here’s another simple step to protect yourself: Get it in writing. Negotiate a legitimate, written contract and have all parties sign it. Be sure the contract doesn’t contain any blanks that could be filled in later to change the terms. If your contractor or adjuster tries to say that fees have increased, or more money is needed up front, do not give in, the contract is on your side.
Being the victim of a natural disaster is a trying ordeal. Don’t compound your troubles by letting your guard down during recovery. As always, if you have questions or concerns, don’t hesitate to contact your professional, independent insurance agent for help.
Do you know why an independent insurance agent is better?
You don’t? Here’s why. They are always available to offer you personal, one-on-one help with all of your insurance needs. Whether you need fleet insurance or business interruption insurance, you’ll have the added benefit of working with people who understand your business and its needs. They will assist you every step of the way. Your satisfaction is their number one priority. Call one for any of your insurance needs. They represent YOU, not the Insurance Company.
Your Professional Insurance Agent…
We want you to know about the insurance you’re buying.
Alan Plafker is President of Member Brokerage Service LLC, a Melrose Credit Union Service Organization. He is a licensed Insurance Broker and serves as Vice President on the Board of Directors the PIANY (Professional Insurance Agents Association of NY), serves on the Board of CIBGNY (Council of Insurance Brokers of Greater NY), and was appointed to the New York Independent Livery Driver Benefit Fund Board of Directors. His Agency insures thousands of polices for TLC Insurance as well as many policies for all types of insurance. You can reach him in his Briarwood, Queens office at (718) 523-1300 ext. 1082, or visit the website at: www.MemberBrokerage.com