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How Commercial Insurance is Changed by Risk Management

With all the recent catastrophes (and just plain old inflation), we’ve been watching insurance costs rise across the board. Higher deductibles are something even low-risk individuals are seeing. Unfortunately, insurance companies have to manage their bottom line, and doing this means raising rates.

The biggest problem pushing these rising costs is hurricane season. With their catastrophic damages, coming, again and again, commercial property rates are rising across the board–even affecting locations technically in a safer zone. The risk management is in response to this problem.

chess pieces to teach business owners risk management — Like chess, insurance companies plan out how their coverage is sold.

What Is Risk Management?

According to the Oxford dictionary, risk management (for business) is defined as “the forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.”

Basically, businesses (and homeowners as well) know losses can happen in the future. It’s not a question of “if something will happen,” but “when something happens, what will I do?” The practice of asking these questions and then developing proper procedures is known as loss control.

For most businesses, this practice comes even without insurance, but the underwriting process mostly involves it before signing a commercial policy, especially now.

How Is It Affecting Commercial Insurance?

The first part of these changes come with the vicious backswing of all these catastrophes. With hurricanes alone, the damages swing up into $200 billion. Pairing this with the horrors Malibu saw just earlier this year, and you have an industry drained of its resources.

With all the payouts, it makes sense that the insurance industry has to “refill its coffers” so to speak. However, this comes from all of the people insured. So, the immediate effect is higher deductibles for some, and in places like Malibu, outright declination of coverage because the properties are “too high of a risk.”

The second, more positive result is instating risk management experts in insurance firms. Certain companies can offer in-house advice to businesses when they purchase policies from them. All in all, who can turn down loss control when it comes bundled with your commercial insurance?

What Does This Mean for Me?

For the average business, this could mean higher rates, but that isn’t a new topic of discussion. For people in certain industries, such as manufacturing where there is a high risk, it can mean that you will pay more. However, you could have a risk management team applied to your policy.

construction foreman with clipboard for risk management — *Some industries like construction are affected by this more than others.*

With more focus on controlling risks (that can be controlled) comes safer management in businesses across the board.

Besides that, make smart investments to pay for the premiums down the road. This helps to provide a solid hand in risk management. Thankfully, insurance agents will have your back with this down the line.

With EZ.Insure, your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 855-694-0047. EZ.Insure makes the entire process easy, and quick.

Is There Open Enrollment for Group Health Insurance?

Open enrollment is defined as a period of time when an employee join your group health plan or make changes to their existing policy. If you have a Group Health policy, which you should if your business employs over 50 workers, then any changes outside of a SEP will need to be made during this open enrollment period. Your employees need to be notified so that they do not miss this opportunity.

squares and finger pointing at them — *Open enrollment is the standard period for insurance changes. Do you know the exact dates?*

The unfortunate downside is that if the deadline is missed, then they must wait until next year. However, certain qualifying life events exempt an individual from this rule. You can learn more about that here. <link to SEP article>

For Employees

Open enrollment for the 2019 period will start Friday, November 1, and it will run until Sunday, December 15, 2019.

With your employment-based policy, your staff should receive reminders in the mail, but make sure to either talk to them one-on-one or send them an email yourself.

Health coverage is important, and taking the time to reach out will send a positive message to your employees. They will appreciate your knowledge, guidance, and interest in their well-being.

For Business Owners

You do not have an “open enrollment” period to make changes to your company’s group health policy. You can make changes whenever you’d like.

business owners in their company — *Knowledge is power! Keep in mind important dates when it comes to making policy changes.*

If you want to change your business’ policy, you can (usually) cancel your coverage at any time, but the insurance company prefers to be notified at least 30 days in advance. It would be courteous to let your employees know as well.

For these changes, it’s good to review the pros and cons of joining an HRA or switching to a different policy. Both are valid options, but the choice ultimately falls on what would be best for your company’s future.

Don’t worry about big insurance decisions; EZ.Insure offers solutions. Your agent will answer any questions you have, compare the plans available to you, and even sign you up when you are ready, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-998-2027. EZ.Insure makes the entire process simple, easy, and quick.

The Beginner’s Guide to Professional Liability Insurance

If you sell products or provide services, you need professional liability. Your business can only benefit from this coverage.

Here, we’ll take a look at what Professional Liability covers, real-life examples, and costs.

business owner looking at professional liability coverage — *Running a company is difficult, but professional liability will bring peace of mind.*

What is Professional Liability?

This policy is often called “Errors and Omissions,” so if you see either, know they mean the same thing. Businesses need protection from professional mistakes, and this insurance type offers just that.

The worst-case scenario is a negligence lawsuit against your company. But, with this policy, you’ll be covered! A Professional Liability plan will help cover all costs and fees associated with the lawsuit, this includes legal fees and damages you have to pay. For businesses offering things like advice or services, it comes with the territory. An example of this would be a construction worker who is sued because a wall he built fell during a storm and the customer believes it was because of the companies negligence. A lawsuit like this has the ability to shut down a small business, but with professional liability, they would be covered!

This policy brings peace of mind, knowing that should unforeseen circumstances take place, you’ll be safe from the negative effects lawsuits bring to your company.

What is Covered?

While there could be exceptions, these are the typical circumstances covered by professional liability:

Business Mistakes– If your client incurs losses, and your business is at fault, then the financial costs will be covered.
Legal Costs – Should a lawsuit come your way, your company won’t have to pay the court fees or otherwise. This is regardless of the court’s decision.
Negligence– Should you incur a lawsuit due to failing to meet a client’s standards, then you are covered.

You might think these don’t apply to your business, but reading further will give you a better perspective.

Real-World Examples

Example: Let’s say you’ve been contracted to clean office space for a client. Your staff was sent out, but the client calls back, complaining that the work was unsatisfactory. To make matters worse, the client purchased the cleaning before a work event, so they are blaming the loss of the event on your company. Then comes the lawsuit.

Now, this example seems unfair, but even in an unfair case, you’ll still be charged several thousand dollars in legal fees. Do you really want that for your company?

man arguing on a call with headset — *Lawsuits come to even the best prepared. Liability can help recover when this happens.*

Example: You’ve performed surgery on someone but made a small medical mistake resulting in calling the patient back. The results are what you’d expect. While this mistake is human, it could cost you heavily in a negligence lawsuit. These range into over $100,000, especially with medical cases.

Example: Your business has a contract with another for financial advice, and you were confident that your advice would increase their profit margins, but it didn’t.

Now, the other company is suing you to make up for their own profit losses. Think this situation doesn’t apply to you? It can be any type of undelivered service. If you are promising something, simple human error or bad luck can intervene.

What Are the Costs?

Thankfully, professional liability is a less expensive option. However, you do want to keep continuous coverage to reap the benefits mentioned above.

For the average small business, professional liability will cost between $60-$80 a month–around $700 a year. This, of course, can be even less if the business is low-risk. If you run a high-risk business like construction, the costs can rise to nearly $2000 a year.

office table with plants, phone, and notebook for professional liability — *EZ.Insure is designed simply to get you access to the best coverage.*

Purchasing professional liability is easy enough, especially with an agent on your side. They will have the most up to date information about what level of coverage your company really needs to keep you safe–without overspending.

EZ.Insure is here to help. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.

At EZ.Insure, we know that starting a business can be overwhelming, so we’re putting together an easy series for reference. If you need more information, see our Business Insurance Masterlist and our Group Insurance Guide.

Theft Exclusion: Ways Your Insurance Might Not Cover You

It is a fact that insurance policies have loopholes in them. One loophole is theft exclusion, and it affects most commercial insurance policies, even if the words “theft exclusion” are not presented in black and white.

close up of broken window — *Have you been robbed before? Break-in’s happen, so you’ll want to prepare for the worst.*

These tiny words can spell disaster for you should a theft occur on your property. Not only can they leave you high and dry during an unfortunate time, but you can also feel bad for not reading the fine print. More simple mistakes business owners make can be found here. Not to worry, there are steps you can take to prevent being blindsided by theft exclusion. Before that, let’s talk about what you need to know.

What Theft Exclusion Is

Most exclusion clauses come in mighty fine print. It’s no secret companies make excellent use of wordy contracts. Who reads complete terms and conditions anyway? Forget the owner’s manuals…

However, we must look into theft exclusion. The clause removes an insurance company’s duty to provide financial assistance to you in your time of need, depending on the situation. While in most cases your property insurance (within a Business Owner’s Policy) covers a loss, the rules set down for covering said losses are outlined when you purchase a policy. It is extremely important that business owners read the fine print completely before signing.

This can be a challenging situation for anyone with commercial insurance to understand without seeing it in action. Consider this:

Example:

You own a restaurant. One night, you pass by and notice a broken window. Heart pounding, you discover your beautiful business was robbed. The criminal shattered the entry window, cut the power to your security system, and made off with your cash register.

security cameras for a business — *No matter how much security you have, a good thief can find a way in.*

To make matters worse, the food in your refrigerated coolers was in the “danger zone” for too long and is now unsafe. Not only are you out of money, but you are also unable to continue running your business.

So, you file a reimbursement claim. Most claims support damage incurred during the looting, but excludes the peripheral damage. You might receive compensation for the window and cash register, but you can kiss food reparations goodbye.

What You Can Do

When signing for your policy, speak with the underwriter so that you completely understand the coverage you qualify for. Further, look into what exclusions apply. For example, the situation above was exacerbated by the clause “due to temperature changes, the loss is disclaimed for property damage.”

It might cost you more money during the sign-up period, but it can make a complete difference come bad times. Whether you are looking to purchase a new policy or renew an old one, the wise business owner will take a good look at what their policy covers–and what it excludes.

EZ.Insure saves you from these headaches. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.

The Beginners Guide To Worker’s Compensation

Do you know everything you need to know about Worker’s Compensation? It’s not a subject many people discuss at the dinner table, but it’s incredibly important to have when running a business in case someone is injured. A small thing like a loose nail or an unstable walkway could spell trouble.

smiling worker in an office with a be happy sign — *It’s easy to be happy when you know you’re covered!*

Before an accident happens, it’s imperative for a business owner to understand the terms of Worker’s Compensation coverage, how to qualify as an employee, what it covers, and what it will cost you.

What Is “Worker’s Comp?”

This agreement states that as long as an employee receives wage replacement and medical benefits, the employee will not sue the company for negligence. Meaning, if you’re injured on site due to something workplace related, you’ll be covered for the amount of work you miss plus hospital bills. But, you cannot sue the company specifically for failing to take proper care. This protects employers and employees.

It’s state-mandated, and the particulars change based on your location. EZ.Insure’s agents are familiar with this information, local or not, so by calling us, you’re saving some time.

Good news is, safety regulations are solid nowadays.

employees with talk bubbles asking about insurance — *Your employee may have questions for you during this time. EZ.Insure will give you the knowledge to answer securely.*

How Can Your Employee Qualify?

For an injured employee, there are only four checkboxes to qualify:

You must be employed by the company.
Your illness/ injury must be work-related.
Your case must fall in state guidelines.
The employer must have Worker’s Compensation insurance.

What Is / Is Not Covered by Worker’s Compensation?

Workers Compensation insurance covers most workplace injuries, but you may be refused assistance if your injuries are self-inflicted, occurred during a crime, or if your actions during your sustained injury violated company policy. For example, if your employee happened to sustain an injury while robbing you, rest assured their injury most likely won’t be covered.

The injured employee doesn’t need to be injured “on-site” to be covered. Worker’s compensation can also come into place when your injury is sustained, and it’s job-related. This could be if your company plans a trip overseas for a meeting, and your employee happens to break a limb during the outing.

When it comes to your medical expenses, you’ll find support with diagnosis and treatment. Depending on your state, it can also provide disability payments, rehabilitation, or retraining.

This should provide ample cushion for your employees to recover and return to work.

What Are the Costs?

The average cost of a worker’s compensation claim is $38,000 (from 2005). This is a combined total of both the medical side and loss in productivity. That’s a down payment for a house or a mid-size car.

For a company, the average cost per $100 in employee wage ranges from $0.75 to $2.74. It doesn’t seem that bad, but this does depend on the state. If you’re looking into getting this for your company, contact your local office to get specific information.

Do Worker’s Compensation Costs Change Per Business Type?

cranes with people working on construction — Depending on what your company does is how much you’ll be quoted for worker’s compensation.

Depending on your company, the money outflow is going to fluctuate. For example, in the office building, your cost per $100 goes down to about $0.12. It doesn’t sound that bad, but it’s because injuries happen less often in this environment.

If you’re a painter or a landscaper, this average jumps up to $7-9/$100. You’ll have to take a look into the work you’re doing, and how it may affect an employee. Your business needs a strong hand with inside knowledge to provide you with the best quality insurance.

EZ.Insure has the experience to help you excel. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.

Group Health Insurance: The Plans, the Importance, and the Agent

What Types of Insurance are Available and Why They Are Important

You’re ready to take the next step into improving your business through group health insurance plans. You’ve got your employee’s benefits in mind, but also your company’s bottom line. Both are important. So, here are the different types of insurance plans available to your company, and how exactly they’ll help you out.

Fully-Insured Employer/ Large Employer Group

Why You Should Choose This: You’re wanting a solid plan that provides the most coverage. This is if you’re wanting major medical or health maintenance organization (HMO) coverage.
Business planning is all about finding what works for you, insurance or otherwise.

What It Offers: A traditional policy that is common, so more support or offers from agencies. You also party directly to the agency.

Requirements: Just the basic group insurance requirements: be a business of two or more people and enroll during the specified period.

Small Employer Group

Why You Should Choose This: You’re a smaller company or a group in a larger company seeking a cheaper option. Insurance agencies can more accurately predict risks in a smaller group.

What It Offers: Cheaper options with higher coverage and the same policy for each employer.

Requirements: Basic group insurance needs met.

Health Maintenance Organization (HMO)

Why You Should Choose This: You want to pay for specific health services via monthly premiums.

What It Offers: More control when it comes to enrolling for general services.

Requirements: A good knowledge of doctors and care facilities as you will have to stay within a network.

signing life insurance form — *Life, health, and any policy will require some old-fashioned form signing.*

Self-Funded

Why You Should Choose This: You wish your company to be in complete control of the payment for coverage.

What It Offers: More control as your company is the one taking the costs.

Requirements: Basic group requirements

Association Group

Why You Should Choose This: You are not an employer, but you still wish to offer group health insurance to a set of people.
What It Offers: The ability to get group health insurance for a non-business type.

Requirements: Basic group insurance needs met.

Level Funded Plans

Why You Should Choose This: You wish to pay a monthly premium instead of an annual one.

What It Offers: A graduated payment plan instead of a lump sum at one time.

Requirements: Census information will be taken of the group you wish to be insured in order to determine your monthly rate for coverage.

Preferred Provider Organization

Why You Should Choose This: You’re wanting something similar to the HMO plan earlier but with more flexibility.

What It Offers: More choices when it comes to doctors and facilities with the risk of being more expensive due to administrative costs and negotiated services.

Requirements: Basic requirements met.

High-Deductible Health Plan with Savings Option (HDHP/SO)

Why You Should Choose This: You don’t think your employees will use medical services, so you trade higher deductibles for lower monthly costs.

What It Offers: Cheaper options at the expense of your employees. However, this may be paired with a health savings account to counteract the higher out of pocket costs.

Requirements: Basic group insurance needs met.

hands pressed together after business meeting — *Let an insurance specialist help you succeed.*

Your Agent

With all of these to take into account, it can get overwhelming quickly. An insurance agent is specially prepared to navigate these waters and make sure you’re getting the exact plan to fit your needs.

Sometimes, not all employees will want or need this coverage. After you take stock of your company’s team and needs, look to a specialist for a guiding hand.

EZ.Insure offers you another helping hand. Your agent will answer any questions you have, compare the plans for you, and even sign you up, free of charge. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing [email protected], or calling 888-998-2027. EZ.Insure makes the entire process easy, simple, and quick.

Tag: business advice

How Commercial Insurance is Changed by Risk Management

What Is Risk Management?

How Is It Affecting Commercial Insurance?

What Does This Mean for Me?

The Beginner’s Guide to Professional Liability Insurance

What is Professional Liability?

What is Covered?

Real-World Examples

What Are the Costs?

Theft Exclusion: Ways Your Insurance Might Not Cover You

What Theft Exclusion Is

Example:

What You Can Do

The Beginners Guide To Worker’s Compensation

What Is “Worker’s Comp?”

How Can Your Employee Qualify?

What Is / Is Not Covered by Worker’s Compensation?

What Are the Costs?

Do Worker’s Compensation Costs Change Per Business Type?

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