7 Crucial Times to Re-evaluate Your Business Insurance Needs

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Did you check “get business insurance” off your to-do list and never look back? Protecting your assets with the right coverage is an important part of opening or launching your business, but it shouldn’t be a set-it-and-forget-it action item.

As your business expands, changes, and progresses you will want to take a fresh look at the risks your company faces and re-evaluate your insurance needs.

You May Need to Re-evaluate Your Business Insurance Needs If…

Here are seven times you’ll benefit from taking a fresh look at your coverage.

1. Your Business is Growing

The best time to take a look at your insurance coverage is when things are trending upwards for your business.

Smiling Business Owner

The more value your business has, the more you have to lose. Unfortunately, we live in a litigious society and many people wouldn’t hesitate to take you to court if they feel they are injured in some capacity because of your business operations. Whether that’s a physical injury or even an advertising injury, one small incident could cost you.

If you have been seeing the payoff from long hours, hard work, and creative risk-taking in the form of increased profits and an increased cash flow, you may want to rethink the amount of coverage you have on hand. Is it enough to protect what you’ve worked for?

2. Your Business is Slowing

Not every business is booming at all times. You may find that you experience slower seasons or periods where profits are lower than expected. If you need to free up some extra cash flow in order to keep the lights on and inventory on the shelves, it’s definitely time to rethink your business policies.

That doesn’t mean cutting out coverage entirely, however.

Letting policies lapse or canceling coverage during a slow season could actually cost you more in the long run.

There are changes you could make to your insurance policies that may free up some much needed cash without leaving you vulnerable to unexpected incidents. You may want to increase your deductible amounts to lower your monthly premiums, for example. Or you and your insurance agent may find a creative way to combine policies to get a discounted rate.

3. You’re Adding New Services or Products

Thinking of adding a repair service to your retail shop or private labeling a product to sell on your ecommerce store? New services or products could bring in new streams of revenue for your business… but they can also bring additional risks.

Hipsters Evaluating Coffee Beans

Adding a private label product to your online store brings new risks such as product liability exposure, intellectual property rights considerations, and a responsibility for product recalls.

Adding a repair service to your retail shop means you’re handling customer property, which could lead to third-party property damage concerns or safety concerns for employees who will be working with potentially dangerous tools and equipment in your store.

Expanding your business with new revenue streams is a great idea, but make sure your insurance covers you against the unique risks those new products or services will bring.

4. You’re Hiring

When you first started your business, you may have been a one-woman show. Web designer, graphic designer, marketer, copywriter, accountant, warehouse manager, filing clerk, customer service department… you’ve played all the roles. But when it’s time to hire help, you’ll want to consider more than just what wage to pay.

Depending on whether you hire an independent contractor or an actual employee, you may need to carry workers’ comp insurance. In most states, workers’ comp is required, even if you only have one employee.

And if you decide independent contractors are a better fit, you may need to take another look at your general liability policy. Because you may still be liable for the actions that a contractor takes when they’re doing work for your business.

If you’re bringing in helping hands, it’s always a good idea to talk to your business insurance professional to ensure you have the right coverage in place.

5. Your Coverage is Cookie Cutter

We’re not trying to butter you up: your business is unique. So why would you carry insurance coverage that’s not custom-made to address your specific industry needs?

Afterall, a small local bakery won’t face the same risks as a food truck owner.

Your insurance should be tailored to match the exact risks you face every day as you do business.

Happy Business Owner

6. You’re Spending Too Much

Are you cringing every time you make a premium payment for your insurance coverage? Maybe you’re spending too much! If you are, we’ve got good news.

There are ways to save money on your insurance policies.

We’ve already mentioned increasing your deductible amounts to save on your monthly premiums. But if you like your deductible amounts right where they are, here are some other options:

  • Avoid small claims. Pay out of pocket for the little incidents you can afford.
  • Keep your policies up to date.
  • Combine multiple policies to get lower rates.

Ask your insurance professional how to get lower rates on your small business policies, and you’ll be happy you took the time to reevaluate your options.

7. You Can’t Remember the Last Time You Updated Your Coverage

Here’s the biggest red flag that it’s time to pick up the phone and call your insurance agent to discuss your business coverage:

You can’t remember the last time you did it.

Things change.

Your business may be experiencing growth or a slower season. You may have hired, fired, or changed an employee’s status. You may have bought, sold, or leased a vehicle. You may have moved locations, added services, or changed your product offerings.

Consider a checkup of your business insurance coverage a necessary appointment for the health and wellbeing of the business you’ve worked so hard on. The best case scenario is you fine-tune your coverage and look for options to save money on your premiums.

Best of all, there’s no worst-case scenario to making sure you have the right insurance in place to protect the business you love.

Small Business Insurance Checklist

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If you’re a small business owner, managing time and money becomes more important than ever. While you balance the needs of your company and home life, it can be tough to feel like there’s enough of either at the end of a hard day. That’s why it’s important to make sure you have a small business insurance checklist in place to help protect your business and your family’s financial stability. By ensuring that you have the appropriate coverage, you can minimize the risk of unexpected financial loss due to unforeseen events. This can help to give you peace of mind and allow you to focus on running your business.

Now imagine throwing a costly and time-consuming court battle into the mix.

Don’t think it’ll happen to you?

Think again…

It’s the things you’d least expect that can take you down, like a customer who slips coming into your store during a rainstorm, or a seemingly innocent Facebook post that accidentally offends one of your followers to the point of legal action.

As your most valuable tools for success, you need to protect your time and money.

What’s the answer? Small business insurance, of course!

…but you already knew that.

The real question is, “How do I know what kind of business insurance I need?”

We’ve created this simple checklist containing the most common small business insurance products to help you review your company’s risk factors, and identify any gaping holes in your insurance coverage that could end up taking you down.

General Liability

We’ll go ahead and check this one off for you, because every business needs general liability (GL).

GL is the bare minimum protection you’d ever want if you’re running you own business. It covers a lot of the “core” risks you might face in the course of your day-to-day operations, such as personal injury, property damage.

How does GL protect your business?

Claims covered by your general liability policy would be covered by the insurance company, not your business. Costs covered might include:

  • Damages
  • Legal costs
  • Settlements
  • Judgements
  • Court Fees

 

When we say everyone needs general liability, we aren’t being dramatic. We’re living in a litigious society, and even the most behind-the-scenes business owners, like writers and graphic designers need some kind of insurance as a safety net.

Property Insurance

As the name indicates, this insurance protects any property your business owns. Buildings, fences, signs, and sheds, and any other structures are covered, as well as items you use to run your business, like office furniture, equipment, and machinery.

In some cases, coverage even extends to damage caused by fire and natural disasters, and can cover the cost of debris removal and cleanup.

Business Interruption Insurance

Are you covered in the event you can’t operate your business according to your regularly scheduled program?

If events beyond your control, such as a major grid malfunction, flood, earthquake, or other emergency prevent the running of your business, how will you earn money?

Business interruption insurance replaces your income if circumstances beyond your control shut your business down temporarily. It covers you while you manage the damage, and make the necessary repairs.

Business Owners Policy

If reading the prior 3 policy types and you find yourself thinking you need a combination of those, consider looking into a Business Owners Policy.

A BOP combines liability, property, business interruption, and potentially a few other coverages, into a singular policy for ease of use and premium discounts.

Workers’ Compensation

Got employees? You need workers’ compensation insurance.

In every state in the US (except Texas) your business needs to carry workers’ comp insurance to cover your employees, even if you only have one single, part-time employee working for you.

Here’s why:

Workers’ comp is there to protect you, and your employees, in case someone is injured or gets sick while doing their job. Slips, falls, and any other accident could mean lost wages, medical bills, and other related expenses for your employee.

Workers’ comp helps cover those costs.

Your business benefits from carrying workers’ comp too, since you won’t have to worry about going broke over a costly injury lawsuit if an employee is injured on the job.

If you think you’re off the hook because you only use independent contractors and freelancers to help you get the job done, think again. The rules that determine whether a person is an employee or contractor can be confusing, and it’s common for small business owners to accidentally misclassify contractors and employees, which can result in extremely expensive consequences.

Just because you write up a contract calling someone an independent contractor doesn’t necessarily make them one. Understand the difference between an employee and a contractor so you can avoid trouble legal and financial pain.

Commercial Auto

Do you use your personal vehicle for work?

Many small business owners do, and make the mistake of thinking their personal auto insurance will cover them while they’re running errands for business purposes.

Your personal auto coverage only goes so far.

If you or an employee encounter an accident while driving during the course of doing business, your personal coverage won’t do much to protect you. It could be as simple as dropping off a forgotten tray of food to a catering customer in your own car. Or letting your employee use your vehicle to make a coffee run.

All it takes is one distracted driver, texting teen, or hazardous object in the road to derail all your hard work if your business isn’t covered by commercial auto.

Other Business Insurance

All the insurance types listed here are the primary lines small businesses typically carry to cover their assets. But others exits to compliment and fill in specialty gaps in the broad spectrum business insurance types outlined above.

For example:

  • Errors & Omissions (E&O)—for individuals in sensitive professional service industries, such as finance, law, and medicine. Protects against claims of inadequate work and negligence.
  • Cyber Liability—protection against damages resulting from data breaches and other digital, cyber security, and privacy issues. Becoming increasingly more necessary as more companies transact business online and store customer information in their database.
  • Umbrella Insurance—extra coverage above and beyond the maximum limit for traditional lines. An extra padding of coverage for your business.

While these insurance types aren’t thought of as the core products needed to protect against risk, they can be the costliest to overlook if you do need them for your business. If there’s any question in your mind, it’d be smart to chat with a broker who can help you sort out how much risk you face, and if your particular business merits extra coverage.

How many of the above business insurance policies do you currently carry?

If you’re looking back on this list and wondering if you might have some holes in your coverage, don’t wait. Ignoring the risks could cost you everything: Shore up your business defenses and make sure you have adequate insurance coverage for your business.

Home-Based Business Insurance Facts and FAQs

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Home-Based Business Insurance Facts and FAQs

If you run a business from home, you’re in excellent company. Amazon, Apple, and Disney all got started as home-based businesses. More than half of all US businesses are home-based, so you’re not alone if your dining table often doubles as your work desk.

You’re passionate about your business. You know it has potential, so you want to keep it safe. However, your homeowners insurance and other personal policies might not offer enough coverage to protect the business you’re working so hard to build. For example, many homeowners policies cannot cover business-related claims, or they may only cover them up to a limited amount.

Discover what coverage you need with these home-based business insurance facts and FAQs.

Don’t see the answer to your question below? Drop us a line.

Home-Based Business Insurance Vocabulary

If you’re just getting your company off of the ground, you may be new to the realm of business insurance. Here are a few key terms to get you started:

  • Sole Proprietor: A sole proprietor is the exclusive owner of the business. They are entitled to all profits, but are also liable for all losses.
  • Limit: The total amount of losses your policy will pay. This limit may be expressed per-occurrence (ie: a separate limit for each individual claim) or as an aggregate limit (ie: a total limit for the entire policy).
  • Liability: A legally enforceable obligation. For example, if someone is injured on your property while there on business due to negligence on your part, you could be held liable.
  • Claim: A demand made by an individual for compensation, under an insurance policy, for loss or damage suffered.

Why Do I Need Business Insurance If I Have Homeowners Insurance?

Because your home is also your office, you face different risks and liabilities than an ordinary homeowner might. For example, if you’re the sole proprietor of your business, you’re responsible for all of the debts your business incurs. This makes business insurance important for a few reasons:

  • Most homeowners policies don’t cover business-related claims.
  • If a lawsuit gets to be too expensive and you don’t have business insurance, your personal assets could be at risk.
  • If you sell a product, your homeowners insurance typically won’t cover you if someone has a problem with a service or item you provided them.

Business insurance policies protect you from things your personal policies can’t.

What Types of Businesses Should Be Insured?

All home-based businesses can benefit from some amount of insurance. If you run a business, you face risk. What risks you face will depend on factors such as the size of your business, or whether or not you have employees.

Whether you’re a realtor, a freelance writer, a graphic designer, or a piano teacher, you’ll need to determine which policies fit your needs best.

What Type Of Insurance Does My Home Business Need?

The type of insurance you need will depend on the business you run. Factors such as the size of your business, or whether you have a work vehicle will impact the type of insurance you’ll need.

  • General Liability: General liability insurance is a vital form of coverage. All businesses can typically benefit from general liability insurance.
  • This coverage protects you against damages from accidents involving a third-party. For example, say a client visits you in your home office and slips and falls. Your general liability policy has you covered.
  • Professional Liability: Professional liability is also known as errors and omissions insurance. This policy goes hand in hand with your general liability policy. It covers you for financial damages stemming from incidents where you’re at fault. Say one of your products causes injury to a customer, or you give someone bad advice. If you have professional liability insurance, you’re covered.
  • Workers’ Compensation: A workers’ compensation policy covers you and your employees from financial loss because of an employee injury. Say you hire seasonal help for your cupcake business during the holidays. If your employee is injured on the job, workers’ comp can help pay medical expenses.
    Many states have laws in place stating that any businesses with employees need to have workers comp insurance. Make sure you know what the law is where you operate.
  • Commercial Auto: If you have a vehicle you use for work purposes, consider a commercial auto policy. This covers your work vehicle, or your personal vehicle if you use it for your business. If you get into an accident while your vehicle is being used for work, your personal policy may not cover the damages.
  • Umbrella Coverage: Umbrella insurance functions exactly as the name implies. It’s an umbrella, a catchall. It covers your losses should they exceed the limits of your other policies.

If your business faces a major lawsuit and you don’t have half a million lying around, for example, umbrella insurance can make up for what your other coverage can’t provide.

How Much Does Home-Based Business Insurance Cost?

The great news is, running your business from your home can save you money on your insurance. Because you don’t have the added expenses that come from insuring an asset such as an office or a warehouse, you may pay lower premiums.

For an exact idea of how much your home-based business insurance will cost, get a free quote from one of Citizens General’s business insurance specialists.

When you’re striving to get your business off the ground, accidents can happen. The right home-based business insurance provides you with the security of knowing that a mishap won’t lead to catastrophic financial losses.

It gives you a safety net so that you can continue pushing your business forward.

What Does Business Insurance Cover?

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Business Insurance is one of the best investments you can make for your company. Your business is the culmination of the years of effort it took to get it off the ground, so keeping it safe is important. The right insurance policies can shield your business from accidents and financial damage.

What risks does insurance cover for your business?

The amount and type of coverage you need will vary based on a number of factors, such as:

  • Business type
  • Business size
  • Number of employees

What Business Insurance Covers

Not all businesses will require all of the policies listed below. Take the time to consider what the risks of your individual industry are and which of your assets are most important to you when deciding which policies will best meet your needs.

General Liability Insurance

General Liability Insurance provides your small business with fundamental coverage. Whatever other policies your business needs, this one is a must. General liability protects your organization from third-party lawsuits over accidents such as a customer getting injured, an employee causing accidental property damage, accidents related to the product you sell, or copyright issues from online advertising. Your general liability policy can be used to cover legal fees, medical fees, and other expenses related to a lawsuit.

Workers’ Compensation Insurance

Workers’ Comp protects your employees by covering medical expenses and lost wages in the event that they are injured or get sick as a result of the duties performed for your business. Because your employees are provided with this financial support through workers’ comp, the policy protects you from being sued by an employee for medical expenses. In most states, workers’ comp is required by law if you have any employees.

Commercial Auto Insurance

Commercial Auto Insurance covers you and your employees while you’re using vehicles for work. This policy protects you from the financial repercussions resulting from being found at fault in an accident. If you get in an accident while using your vehicle for work purposes, your personal auto insurance won’t cover it. If you use your personal car for work purposes, if your business owns or leases any autos, or if your employees use company cars, you’ll need commercial auto insurance.

Professional Liability Insurance

Professional Liability Insurance protects your business from lawsuits filed over professional errors or accidents. While general liability insurance protects you from physical damages, such as a customer slipping and falling, professional liability insurance protects you from financial damages such as making a professional mistake that causes a third party to lose money. This includes:

  • Mistakes that cost customers money.
  • Giving poor advice.
  • Missed deadlines.
  • Failure to fulfill an order.

Umbrella Insurance

Umbrella Insurance is the ultimate safety net for your business. If the costs associated with a claim on one of your other policies goes over the policy limit, umbrella insurance will make up the difference. This extra safety net can benefit both large and small businesses who may not have the money to pay a high-dollar claim that exceeds policy limits. It may be especially useful for companies with a larger number or assets they want to cover.

To determine which policies are best-suited to your business, contact us for a quote now. An accident resulting in damages or a lawsuit can have a huge impact on your business’s financial stability. Making sure you have the right coverage is a vital part of keeping your company safe.

Home Based Business Insurance: What your Homeowners’ Policy Doesn’t Cover

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Are you running a home based business? Whether you call yourself a consultant, independent contractor, freelancer, or entrepreneur, “home-based” is big business in the U.S. More than half of all small businesses in America operate out of someone’s home. There are lot of benefits to running a business out of your home, but there are also some pretty big risks involved, too And if you are relying on your homeowner’s property insurance to cover your business, you may be setting yourself up for a disaster.

Because whether you are a real estate agent, piano teacher, or graphic designer… your homeowner’s policy isn’t going to cover all of the potential threats to your home-based business.

Why you need Home Based Business Insurance

One of the reasons you are operating out of your home is to keep costs low. After all, why would you pay for business expenses you don’t need, such as rent on an office space, or a warehouse you haven’t grown into yet? But avoiding the expense of business insurance is risky business.

If you think you don’t need insurance because your homeowner’s policy has you covered, you are making a mistake that could cost you big.

Here’s why you can’t afford to rely on your homeowner’s policy to protect a business that you operate from home.

#1: You have Assets to Protect

Are you the sole proprietor of your business? Your business assets aren’t the only thing on the line. When you are a sole proprietor of a business, your personal assets could be at risk, because a sole proprietor is personally responsible for all business debts and obligations. And one of the biggest risk to your assets is the high price of a lawsuit.

If you think your business is too small for a lawsuit to find you, think again. Even if you are operating out of a home office, garage, or even the kitchen table, your business could be sued.

If your business has a website, blog, marketing materials, or social media accounts, the lawsuit that you should be most worried about is advertising injury. You may not realize it, but your efforts to market your business online could be infringing on copyright laws, you could unintentionally be invading someone’s privacy, or your efforts to “rise above” the competition could be seen as libelous.

Unless you’ve added an endorsement to your homeowner’s policy, there’s a good chance it may not cover any advertising injury claim as a result of your business.

If you have a general liability policy for your business at home, however, you have a safety net to protect you from these situations.

General liability coverage is there to pay for the high costs of third-party lawsuits for advertising injuries, bodily injuries, or property damage that results from your business. Whether you are at fault or not, the cost of defending your business in court can add up fast. A stand-alone general liability policy may cover costs ranging from lawyers’ fees, court costs, defense fees, settlements, and judgements.

Bonus! The cost of general liability insurance for a business run from your home is likely to be much lower than if you operated outside of the home. Ask an experienced business insurance professional to show you how low your rates can go.

#2: There are Holes in Your Homeowner’s Policy

Your homeowner’s insurance policy is meant to protect your home as a residence, and not necessarily your home as a place of business. That means your coverage may not necessarily extend to business assets. If a fire or theft takes out thousands of dollars worth of inventory you had stored in your garage, don’t be surprised if your homeowner’s policy leaves you footing the bill.

Expecting a delivery? If your delivery person slips on your icy driveway hauling a package up to your door, your homeowner’s policy may not cover the costs of his injuries if the package contained inventory or supplies being shipped to your “business.”

Wow, right?

Unless you have added an endorsement to your specific policy, the typical coverage a homeowner’s policy provides for business-related claims is usually zero.

A homeowner’s endorsement may only be available if your business has very-few business related visitors, such as freelance writers or graphic designers. On the other hand, if you regularly have clients in and out of your home, your homeowner’s policy may not allow a liability endorsement to cover your business activity. In this case, you may want to look into stand-alone policies to be sure your business is protected.

#3: You Provide a Product or Service

Does your business provide a product or service? From widgets to doodads, consultations, advice, or the world’s most beautifully designed logos, businesses typically offer something to paying clients and customers. But what happens if your client is less than satisfied with the product or service you’ve provided?

Let’s imagine that your client sent in an order, and you made a small mistake inputting the shipping date. When you missed your deadline to ship ten boxes of gizmos, this misunderstanding cost your client big time. And now they have lawyered up, with every intention of making you pay for your mistake.

Maybe you don’t have any products to ship. Perhaps you offer a service to clients as a real estate professional. Imagine the following scenario…

You help your client find the home of their dreams. You work up a contract, and they hand over a sizeable deposit check. But you made a small mistake on the contract, and this small mistake led the client to lose the home and their non-refundable deposit. Your clients want you to reimburse them for their financial loss, and they want you to pay the difference in sales price between this home and the (higher priced) home they finally end up in.

When your business is facing a lawsuit that arises from a client’s financial loss, you can protect yourself with professional liability insurance. Professional liability, which is also known as Errors & Omissions (E&O) coverage, is the only policy specifically tailored to cover lawsuits from third-party economic loss. And if you are a service professional, such as a consultant, real estate agent, for financial advisor, professional liability is a must-have for your business.

Professional liability fills in the holes in your general liability coverage, which may protect you from a third-party injury lawsuit but may not cover you if your client tries to recoup a financial loss. And a homeowner’s policy, even with an added liability endorsement, may cover you in case a client is injured in your home; but that doesn’t mean the protection will cover a third party lawsuit seeking damages for economic losses.

#4: You Use a Computer

Do you use a computer, laptop, tablet, or other technology to help you run your business from home? If there was a break-in at your home, and your work laptop, desktop, or tablet was stolen, there’s a chance your homeowner’s policy may not cover the full cost of replacing your business equipment. But that’s not the biggest risk your business laptop faces.

Physical equipment theft is only the beginning. What kind of customer information do you have? Sensitive customer information, such as Social Security or credit card numbers, is always at risk from potential hackers. There is a very good chance that your homeowner’s policy is not going to cover the costs of a data breach, such as notifying customers, monitoring credit, or the costs to defend your business in a stolen identity lawsuit.

Cyber liability insurance offers protection for your business from exactly these scenarios. Whether your laptop or computer is hacked or stolen, the information inside it is often times a more valuable asset than the physical item itself. Cyber liability may offer coverage for this sensitive material that your homeowner’s insurance wouldn’t.

#5: You need a Helping Hand

When the busy months roll around, do you have a helper who pitches in to get things done? Whether it’s packaging up extra baked goods to take to the farmers’ market, updating listings and setting your appointments, or getting you caught up with your filing; a helper may be putting him/ herself in harm’s way. All it takes is one slip on your wet kitchen floor, or a trip and fall over a box of files to land your helper into a costly medical situation.

Could you afford to pay for a trip to the emergency room, a surgery to repair a broken bone, physical rehabilitation, and missed wages for your employee after they accidentally fall down the stairs at your home office? Who would you turn to for help with the mounting pile of medical bills that need to be paid?

Your homeowner’s policy may not cover an injury at your home if the injured person is an employee who is working for your business. If your employee is hurt or becomes ill while doing their job, the only insurance protection that can help cover their medical expenses is workers’ comp. And, depending on the state that you do business in, you may be required by law to provide workers’ comp for your employees. Even if you only have one, part-time person helping you out.

When your business begins to experience growth to the point that you need to hire help, it can be a good thing. But it’s important to know what your responsibilities are to your employees, and that includes providing workers’ comp insurance to protect them from accidents, injuries, or illness from the business you run from home.

Home based business insurance doesn’t have to be expensive. You can begin with a general liability policy, and then customize your coverage to best meet the needs of your specific business. You may be surprised to find the small business coverage you never even knew you needed. There are easy ways to keep your business insurance costs low, allowing you to benefit from even more coverage with affordable premiums. But thinking that your home based business is protected with your homeowner’s policy is a mistake that you simply can’t afford to make.

5 Ways to Get Lower Rates on Your Small Business Insurance

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No matter what kind of business you own, it is at risk. You can be a one-man (or woman) operation, or have a single employee who helps you you operate out of your home. From franchise owners to small and medium sized business owners, business insurance is the key to survival. But that doesn’t mean you have to overpay for this critical coverage.
Here are five ways to get lower rates without sacrificing the quality of your insurance coverage:

1. Review Your Business’ Current Insurance Policies

How up-to-date are the policies that you already carry?

  • If you have had changes to your employee roster, you could be able to save on workers’ comp insurance.
  • Your commercial auto policy may be cheaper if you have sold vehicles or lost employees with less-than-stellar driving records.
  • Have you moved to a new location, or sold office equipment? Your commercial property insurance rates could have changed for the better.

You may be able to uncover substantial savings on your insurance policies simply by keeping them updated.

Examine your existing policies or talk with your insurance broker to see if changes in your business could mean a lower rate on your existing coverage.

2. Increase Your Deductible Amounts

Want to save money on your insurance premiums? Increasing your deductibles is a tactic many business owners use in order to lower their premiums and increase their available cash flow.

Before you increase your deductibles, however, be sure that your business can afford the higher amounts in the event of a claim. The reason you carry insurance in the first place is to protect you from the high costs of accidents, injuries, lawsuits, and unforeseen incidents that could devastate your business. If you have chosen a deductible that is completely unaffordable, your business is still at risk.

If you don’t have the resources available to cover the increased costs of your deductibles, your insurance policy isn’t protecting your business.

If you have enough funds set aside to pay for increased amount of your deductibles, raising them can be an easy way to reduce your premium rates.

3. Don’t Let Business Insurance Coverage Lapse

One of the most important things a business owner can do is to select the right policies to protect their business, and then maintain that protection. Letting coverage lapse during an off-season or slow time may sound like a good idea at the time, but it won’t save you any money.

When you have no-lapse coverage for your business, many insurance companies will offer you a discount on premiums.

If you have a prior cancellation for non-payment on a policy, you may find yourself ineligible for coverage. If you can get coverage, a history of dropping policies and picking them back up again can flag your business as high-risk, leading to higher premiums in the future.

If you get in a tight spot and need to prioritize your business expenditures, don’t skip payments or temporarily drop insurance policies. Instead, contact your insurance broker to look for other ways to save on your business coverage rates.

4. Avoid Small Claims

Don’t sweat the small stuff. Your past claims history is a major factor for determining your insurance premiums. And if your business has had several small claims, it can signal a larger risk than if you had one large claim. The more risky your business appears, the higher your premium amounts will be.

If you have a minor incident that your business can afford to pay for out of pocket, it could be beneficial to absorb that small loss and save your insurance for a larger claim. You can check out this blog we wrote for some tips on how small businesses can avoid insurance claims.

5. Combine Coverage

Your business is worth protecting from every possible angle. And most business owners find that they need more than one policy in order to fully defend themselves from the potential risks that could financially cripple their companies.

Some of the more common risks to your business, and the average cost to deal with them, include:

  • 40% of businesses are likely to face a property or general liability claim.
  • A general liability claim can average $75,000 to defend and settle.
  • 20% of business owners will face burglary or theft.
  • The average cost of a burglary claim is $8,000.
  • 10% of businesses will face a fire claim.
  • The average cost of a fire claim is $35,000.
  • 5% of businesses will face claims for vehicle accidents.
  • A vehicle accident claim can average $45,000 for your business.

General liability may be the foundation policy for your business, but it won’t protect you from auto accidents, property damage from fire, burglary, or theft.

Insurance companies recognize that you will need more than one policy to completely protect your business, and most will offer a discount to you for combining (bundling) your coverage. Combine your general liability policy with commercial auto, for example, an you could receive a discount on both.

Business insurance is a necessary part of doing business. But you can get the best coverage and protection possible for your business without overpaying for it.

To keep your rates affordable, remember…

  • Keep your policies up to date
  • Don’t let your coverage lapse
  • Avoid making small claims if you can afford to take care of them yourself
  • Increase your deductibles if you can afford them
  • Combine multiple policies to get the lowest rates

Easy Ways Small Businesses Can Avoid General Liability Claims

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If a customer trips on your carpet, slips on a wet floor, is injured on your equipment, or feels offended by your social media efforts, they could bring a lawsuit against your business. There are so many potential risks to your business for a lawsuit that you probably could come up with ten just by looking around you right at this very moment.

Whether your business is at fault or not, the cost of your legal defense (and possible settlement) can add up fast.

General liability insurance covers the cost of legal expenses if your business is sued by a third-party (non-employee). The types of lawsuits that general liability covers can include:

  • Property damage
  • Bodily injury
  • Copyright Infringement
  • Product Liability
  • Accidents on your Property
  • Reputation Damage (slander/ libel)
  • Non-Owned (rented or hired) Auto

The average cost of a slip and fall claim for a small business is $20,000. And that’s just one small incident, one wet spot on a floor, one spilled beverage. (One dropped banana peel!) Compared to that figure, the cost of a general liability insurance premium is minimal.

You can keep the cost of your general liability insurance nice and low if you can avoid these incidents, and the resulting claims, from occurring in the first place.

Here are some ways your business can avoid a general liability claim.

Safety First

Some businesses are riskier than others. But putting safety first is always a good idea, no matter what industry you are in. The safer you make your workplace, the less you have to worry about causing injury or harm to someone.

  • Keep up to date on the safety standards for your industry, equipment, or products.
  • Maintain a clean working environment, free from clutter, fire hazards, and trip/fall hazards.
  • Make sure that exits are clearly marked, and that there is adequate lighting during operating hours.

Making workplace safety a priority will reduce the risk of an accident that can injure a customer or other third-party.

Train Employees

Training your employees in appropriate workplace safety and conduct can go a long way towards preventing a lawsuit. Even if you are running a business out of your home, with one part-time employee, you can benefit from training her/him to prevent accidents, damages, and lawsuits. If you have employees, you are responsible for their actions, and words, at the workplace.

When you have an employee handling your social media accounts, marketing efforts, or acting as a representative of your business, you will want to make sure they are up to speed on the next tip, which is…

Market Yourself with Care

In today’s digital marketing world, where every business has a website, social media accounts, and access to Facebook ads, it can be very easy to make a costly marketing mistake. If you inadvertently damage the reputation of a competitor on your blog, podcast, or social media accounts, you could be facing a lawsuit for libel (written defamatory statement) or slander (spoken defamatory statement). Whether you manage your marketing efforts yourself, or have an employee or service do it for you, make sure you don’t try to boost yourself up by tearing a competitor down.

By the way, speaking badly of clients is just as dangerous as talking down the competition. If you say (or write) something that could cause reputational harm to a client, you could be facing a lawsuit.

Avoid Copyright Claims

Another way you can avoid a lawsuit as the result of your marketing efforts is to steer clear from using other people’s images or names without consent. Celebrities may be public figures, but that doesn’t mean you have the right to use their name or photos without permission. While it may be fun to put a pic of your favorite teen pop-queen on your company’s blog post, complete with a funny caption using someone’s image without permission can send you straight to court to defend a copyright claim.

Make sure that you have permission to use the images, music, videos, writing, and content that you use for business purposes.

Use Special Care with Customer Property

You may operate a mobile auto detailing business, cleaning customer cars at their homes and offices. You may repair computers, watches, shoes, or furniture. Whatever your business, if you have customer property in your care, control, or custody, you could be liable for damage. If you are in a position to handle customer property, you need to create a procedure and policies for how to do so safely.

Proper procedures for handling customer property may include:

  • Documenting the condition in which you received the property.
  • Carefully handling property to reduce the risk of damage.
  • Deciding how and where property is stored when in your care.

Once you’ve determined the procedures for handling customer property, make sure your employees are trained and adhere to your policies.

Communicate Openly and Honestly

When you are providing a service or product for a customer, keep them in the loop as much as possible. Client’s who feel included in a conversation, listened to, and aware of what is happening are less likely to sue. Treat your clients with respect, keep the lines of communication open, and be honest in your interactions with them to reduce the chance of them feeling slighted (or damaged) by you and your business.

Reducing the risk of damage and harm to a customer, client, or other third-party person takes time, as well as some good old fashioned policies and procedures. But your efforts should payoff in the form of avoiding general liability claims for your business. The less claims you file, the lower your insurance premium rates will be, which is just good for your bottom line and your business.

Small Business Insurance Checklist

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If you’re a small business owner, managing time and money becomes more important than ever. While you balance the needs of your company and home life, it can be tough to feel like there’s enough of either at the end of a hard day.

Now imagine throwing a costly and time-consuming court battle into the mix.

Don’t think it’ll happen to you?

Think again…

It’s the things you’d least expect that can take you down, like a customer who slips coming into your store during a rainstorm, or a seemingly innocent Facebook post that accidentally offends one of your followers to the point of legal action.

As your most valuable tools for success, you need to protect your time and money.

What’s the answer? Small business insurance, of course!

…but you already knew that.

The real question is, “How do I know what kind of business insurance I need?”

We’ve created this simple checklist containing the most common small business insurance products to help you review your company’s risk factors, and identify any gaping holes in your insurance coverage that could end up taking you down.

General Liability

 

We’ll go ahead and check this one off for you, because every business needs general liability Insurance (GL).

GL is the bare minimum protection you’d ever want if you’re running you own business. It covers a lot of the “core” risks you might face in the course of your day-to-day operations, such as personal injury, property damage.

How does GL protect your business?

Claims covered by your general liability policy would be covered by the insurance company, not your business. Costs covered might include:

  • Damages
  • Legal costs
  • Settlements
  • Judgements
  • Court Fees

When we say everyone needs general liability, we aren’t being dramatic. We’re living in a litigious society, and even the most behind-the-scenes business owners, like writers and graphic designers need some kind of insurance as a safety net.

Property Insurance

As the name indicates, this insurance protects any property your business owns. Buildings, fences, signs, and sheds, and any other structures are covered, as well as items you use to run your business, like office furniture, equipment, and machinery.

In some cases, coverage even extends to damage caused by fire and natural disasters, and can cover the cost of debris removal and cleanup.

Business Interruption Insurance

Are you covered in the event you can’t operate your business according to your regularly scheduled program?

If events beyond your control, such as a major grid malfunction, flood, earthquake, or other emergency prevent the running of your business, how will you earn money?

Business interruption insurance replaces your income if circumstances beyond your control shut your business down temporarily. It covers you while you manage the damage, and make the necessary repairs.

Business Owners Policy

If reading the prior 3 policy types and you find yourself thinking you need a combination of those, consider looking into a Business Owners Policy.

A BOP combines liability, property, business interruption, and potentially a few other coverages, into a singular policy for ease of use and premium discounts.

Workers’ Compensation

Got employees? You need workers’ compensation insurance.

In every state in the US (except Texas) your business needs to carry workers’ comp insurance to cover your employees, even if you only have one single, part-time employee working for you.

Here’s why:

Workers’ comp is there to protect you, and your employees, in case someone is injured or gets sick while doing their job. Slips, falls, and any other accident could mean lost wages, medical bills, and other related expenses for your employee.

 

 

Workers’ comp helps cover those costs.

Your business benefits from carrying workers’ comp too, since you won’t have to worry about going broke over a costly injury lawsuit if an employee is injured on the job.

If you think you’re off the hook because you only use independent contractors and freelancers to help you get the job done, think again. The rules that determine whether a person is an employee or contractor can be confusing, and it’s common for small business owners to accidentally misclassify contractors and employees, which can result in extremely expensive consequences.

Just because you write up a contract calling someone an independent contractor doesn’t necessarily make them one. Understand the difference between an employee and a contractor so you can avoid trouble legal and financial pain.

Commercial Auto

Do you use your personal vehicle for work?

Many small business owners do, and make the mistake of thinking their personal auto insurance will cover them while they’re running errands for business purposes.

Your personal auto coverage only goes so far.

If you or an employee encounter an accident while driving during the course of doing business, your personal coverage won’t do much to protect you. It could be as simple as dropping off a forgotten tray of food to a catering customer in your own car. Or letting your employee use your vehicle to make a coffee run.

All it takes is one distracted driver, texting teen, or hazardous object in the road to derail all your hard work if your business isn’t covered by commercial auto insurance.

Other Business Insurance

All the insurance types listed here are the primary lines small businesses typically carry to cover their assets. But others exits to compliment and fill in specialty gaps in the broad spectrum business insurance types outlined above.

For example:

  • Errors & Omissions (E&O)—for individuals in sensitive professional service industries, such as finance, law, and medicine. Protects against claims of inadequate work and negligence.
  • Cyber Liability—protection against damages resulting from data breaches and other digital, cyber security, and privacy issues. Becoming increasingly more necessary as more companies transact business online and store customer information in their database.
  • Umbrella Insurance—extra coverage above and beyond the maximum limit for traditional lines. An extra padding of coverage for your business.

While these insurance types aren’t thought of as the core products needed to protect against risk, they can be the costliest to overlook if you do need them for your business. If there’s any question in your mind, it’d be smart to chat with a broker who can help you sort out how much risk you face, and if your particular business merits extra coverage.

How many of the above business insurance policies do you currently carry?

If you’re looking back on this list and wondering if you might have some holes in your coverage, don’t wait. Ignoring the risks could cost you everything: Shore up your business defenses and make sure you have adequate insurance coverage for your business.

How to Reduce the Cost of Your Small Business Insurance

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Every small business faces the same challenge—you know you need insurance for the big “what-ifs,” but struggle with the increase overhead that doesn’t directly lead to an increase in your bottom line.

For most business owners, it isn’t worth the risk to go without insurance, so they employ other ways of saving money: by minimizing the cost of their business insurance policies.

Here are several ways our clients at Citizens General have been able to reduce the cost of their insurance premiums, without sacrificing the important coverage they need to protect their business.

Increase Coverage Deductibles

Deductibles are the amounts your business pays before an insurance policy will begin paying on a covered claim, and increasing them can greatly reduce your overall premiums. By taking on a little more risk in the form of a higher deductible, your business lowers the likelihood of filing a small claim. In return, the insurer’s risk — and the premiums they need to charge — are lowered.

This strategy isn’t right for every business, particularly those with limited funds who can’t cover a larger deductible if push comes to shove. But for those with the cushion to afford it, raising the deductible only increases risk by a defined amount, and the corresponding premium decreases are usually substantial.

Take Advantage of Discount Programs

Just as insurance companies offer discount programs on personal policies, many also offer discounts on commercial policies. The available discounts vary depending on policy, but there are typically several your business might qualify for.

Everything from employing only drivers who have commercial licenses, to paying premiums in full may net you significant savings on the cost of coverage.

What’s the fastest way to find discounts? Ask your agent!

A quick call or email will get you dialed in on all the possible savings, and back to work quickly.

Employ Risk-Mitigation Practices and Devices

Insurance cost is directly related to the level of risk your business faces. In some cases, you may qualify for reduced premiums by instituting risk-mitigation practices and/or devices that lower the likelihood of a claim.

For example, your business might be able to lower premiums in exchange for:

  • Using high-quality personal safety equipment
  • Installing monitored security surveillance systems
  • Conducting employee safety training seminars

Even something like upgrading to ergonomically designed desks might qualify for a workers compensation discount, because ergonomic equipment reduces the risk of job-related injury (which workers compensation covers).

A number of carriers, such as The Hartford, have a built-in margin to their standard pricing to allow for discounting. Have low employee turnover, or a low manager-to-employee ratio? Is your business a drug-free workplace? Do you have a limited claims history?

The fastest way to find out which discounts you might qualify for is to delegate the investigating to your insurance agent, who can quickly find out where your most valuable and immediate insurance savings might be hiding.

Keep a Clean Claims Record

Speaking of claims, keeping a clean claims record is a great way to keep your insurance premiums as low as possible. Obviously insurance is there if you need it, but having an insurance record without claims or limited claims let’s the carriers know your business is a good risk for them to take on.

If your business has a history of periodic claims, a carrier will need to factor this risk into their pricing model to make sure the premium makes sense should a claim arise. Higher risk = higher premium.

By enacting business practices to internally reduce the risk of a claim, you’re more likely to keep crystal-clear claim report which keeps your premium toward the lower end of your risk spectrum.

Bundle Coverage with a BOP

One of the most effective ways to reduce your business’ insurance premiums is to bundle coverage with a Business Owner Policy (BOP).

A business owners policy is a package policy that combines foundational coverage together. Most policies come with three primary coverages, with others possibly being offered as options. The three primary coverages are :

  • General Liability Coverage, to cover common accidents and advertising claims
  • Commercial Property Coverage, to cover a business’ physical and personal property
  • Business Interruption Insurance, to cover certain extended losses in revenue

Other coverage may be offered if needed, which might include cyber liability insurance, commercial auto insurance, employers liability insurance.

To find out which policies your BOP would need to include, you’ll save time by going directly to your agent or broker, who can quickly assess your situation, and find your insurance sweet spot for maximum savings and coverage.

Ask Your Agent for Help

Your agent or broker works with insurance products all day, and also sees other clients win and lose in business. They’re in a unique position to advise you on which policies and protections you can reasonably skimp on, and which ones will be crucial to the safety of your business.

To make sure your business has the right coverage for its specific situation, utilize the assistance of a knowledgeable insurance agent or broker. A professional who has worked with other businesses will not only know what risks yours might face, they’ll be able to help you avoid duplicate coverage, and protect against gaps in the fine print that could leave you vulnerable to liability.

Paying insurance is never fun, but mitigating the risk makes sure that if something does go wrong, you’ll be able to see another day. Talk with one of our agents today to make sure what you’re keeping your costs as low as possible, get a free online quote in minutes through The Hartford to compare your rates online.

The Most Important Types of Insurance for CA Small Business

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Risk is part of the territory as a small business owner. This is true for every business, and specifically for those operating in California.

All states face their share of risk, for sure. But as we’ve recently seen with the California wildfires that devastated so many homes and businesses, some states face unique challenges when it comes to business preservation and risk management.

Take your pick from any of the looming disasters waiting to pounce—fires, floods, earthquakes, and even frequent auto accidents on our busy west coast highways…it can seem like there’s a catastrophe around every turn.

The truth is there are dangers and risks in every state, you just have to know which ones are most important to guard against in yours.

Proper risk management can be a life saver—not just a business saver—should you ever find yourself in the crosshairs of sudden disaster.

So how do you prepare for the worst?

It won’t come as a surprise that we’re going to recommend some insurance for your business. We are in the business of helping people protect their business, after all. What’ special about these recommendations is that they’re specifically relevant to California business owners.

Here’s the deal:

Why do small businesses need to worry about this more than big businesses?

It’s all about resources. Small businesses tend to run on a smaller budget, don’t have a big team of risk management pros backing up their decision making, and probably don’t have a million dollar credit line at the bank to get them through a rough patch.

You’ve got more at risk.

Determining the most important coverage for you as a California business owner is vital in protecting your future.

Think your shop or lemonade stand is too small to worry about insurance?

Think again.

Who Needs to Worry About Small Business Insurance in California?

If you own a business with less than 100 employees that grosses less than $5 million annually, you’re a small business owner.

Freelancers and independent contractors? You’re in the mix too.

In fact, freelancers and home based businesses might have even more at risk than your typical brick and mortar establishment. Your personal assets may be on the line, and counting on your homeowners insurance to cover you professionally could be a tragic error in judgement.

If you work for yourself, you need to worry about the risks associated with being in business.

Must-Have Insurance Lines for California Businesses

While every small business is different, each should have minimum basic coverage as the foundation of their loss protection coverage.

Here are the basics…the bare minimum…the core insurance you must carry if you’re a business owner operating in CA.

General Liability

This covers the business for any claims that occur against the business or its employees while conducting business activities. It could include everything from slip and fall claims to false advertising claims. General liability serves as a blanket in liability claims and will cover the legal costs associated with such claims and even the costs of any settlements.

Going back to the home-based business owners—don’t count on your homeowners insurance to cover the delivery guy who breaks his ankle tripping over the garden hose strewn across your front walkway…it’ll more likely be your business’s general liability policy that protect your personal assets in that unfortunate scenario.

Property Insurance

This covers any property owned by the insured for conducting business including structures and contents. Its coverage can extend to inventory, raw materials, machinery, and computers and electronics.

Imagine a fire sweeps through your area and takes out your warehouse, or even destroys your car, which had your computer in it?

Or imagine, instead, the fire takes your office, which was attached to your showroom floor, and adjacent to your manufacturing facility. Your office furniture, electronics, machinery, inventory, and facility are gone.

Now what?

Business Interruption Insurance

Pay close attention, because this one is not something most businesses consider.

Business interruption insurance: what is it?

This insurance covers your business in the event you can’t do business. It’s not to protect you from lawsuits or replace damaged equipment. It’s to cover you financially and replace the income you’d lose if you couldn’t conduct business for a period of time.

The recent fires in California are still a raw wound in our state, and highlight a sad reality—a lot of people have lost their businesses, homes, and possessions, and many face a huge income gap until they can get up and running again.

If your business was destroyed and you didn’t have business interruption insurance, how would you earn your living?

Home based businesses fall through the cracks in this category, because often self-employed individuals or freelancers don’t consider that their home is their office, and often, their personal computer is their lifeline to business operations.

The recent fires in California are a reminder of how critical this type of coverage can be. It can take weeks or months for businesses to file claims and restart their businesses following such a disaster. Business interruption insurance makes up for lost income during this period.

Is That it?

A simple Business Owner Policy (BOP) will cover most businesses to a fair degree, but other insurance lines exist to cover the extras, like cyber risk, or having employees on your payroll.

All of this can be bundled together and doesn’t break the bank…especially when you compare the cost to what might be lost if your business were to experience an unexpected loss.

Should Small Business Owners Be Scared?

No.

Not if they’ve got coverage.

We aren’t in the scare tactic business, and certainly aren’t sending the message that every business is going to face an actual disaster, but it’s hard to ignore the real pain and suffering seen so close to home by so many small businesses in our state over the past few years.

The truth is this:

We don’t have a crystal ball—and neither do you. That’s why every small business (and by the way, we’re a small business too:) should be adequately insured; we just don’t know what’s coming.