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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.

EZ.Insure Cares For Your Business Like Our Own

You worked hard to create your business, building it from the ground up, research, elbow grease, and, of course, capital.

A simple mistake can happen, and just like that, your business is over. EZ.Insure knows how important it is to protect your business so it can thrive and grow. Do not let a simple error be the end of something when you’ve already funded so much. Instead, invest in protection with a policy that is a perfect fit.

We’re the only hassle-free quote engine.

Business Owner’s Policy

A Business Owner’s Policy (BOP) is insurance that typically combines both business property and general liability insurance into one. This bundle was made to protect businesses from risks such as fires or theft. Coverage can either be sold as one policy, a package, or can be sold individually.

A business owner can add to the basic policy and tailor it to the needs of their company. It is a safe way to protect your business from the unexpected, especially if you own the property.

It will cover:

General Liability-protects a business from a person claiming bodily injury from your business.
Property-Liability – protects your business from property damage. This will cover all equipment and furniture in the business and is good for up to 5 office locations.
Business Income/Interruption Insurance– protects your business from income loss due to unexpected interruption of operations such as a fire.

Professional Liability Insurance

Professional Liability Insurance, also referred to as Error & Omissions Insurance, offers your business protection from professional mistakes. Any business that offers professional services or advice should consider professional liability insurance in the event of a negligence lawsuit or undelivered services.

When signing a contract with a client, you are bonded to provide the services expected by meeting a client’s expectations. At times your business may be required to have professional liability insurance to sign a contract. This insurance will give you peace knowing if there is an issue with a client, your business will be safe from the impact of a lawsuit.

*You no longer have to figure it out on your own!*

It covers:

Attorney fees and court costs and settlements—Your business is covered in the event of a lawsuit from a client, regardless of fault.
Work Mistakes—If your business makes a mistake that ends up costing your client money, then your business is covered if you must pay for the client’s losses.
Negligence/Undelivered Services—If your work does not meet standards, such as giving incorrect advice or you did not finish work that was supposed to be completed by a specific time, then you are covered if a lawsuit ensues.

Besides these examples, common accidents occur. Someone can fall or get hurt on your property, and then turn around and sue. BOP can save you from this catastrophe. If something were to happen that was out of your control, it is better to have coverage for these things that can be replaced. If not, you could lose your business. The same goes for any professional mistake. Things get overlooked sometimes, and the wrong thing will lead to your business taking a huge financial hit.

EZ.Insure gets it. We are a business too, so protecting yours is what we will do best. Do not get your dream business started, only to have to lose it all to some minor faults that could have been avoided. To get your business protected, make sure you are covered with BOP insurance and professional liability insurance. We will provide you with free quotes on all plans within your area, to make sure you are getting the best deal for your business and its needs. Call 888-615-4893, or email us at [email protected] to speak directly with one of our agents, or enter your zip code in the bar above to get free instant quotes. We will never sell your information to telemarketers as others do. Our state-of-the-art technology protects your information like no other company out there.

When Can Your Employees Make Mid-Year Changes to their Group Health Policy?

When getting a Group health insurance policy companies understand that people are going to sign up for what they need now, and employees’ needs can often change. Maybe there is a new baby on the way so they want to increase their coverage, maybe they just realize that they are covering a lot of stuff that they don’t need. This leaves many companies and employees wondering when and how they can make additional changes to their policy.

The Standards

The standard is that each year there is one open enrollment period, and this is when people in a group insurance policy can make adjustments to their plan.. However, there are special cases that qualify your staff for a Special Enrollment Period or SEP.

automotive worker fixing a car as employee — *Any industry employee can opt into a SEP. It just depends on why.*

Group Health SEPs are available if your employee has a qualifying event. Here are the most common qualifying events:

Death
Marriage
Divorce
A new addition (child) to the family

The qualifying period starts when the event happens and only extends 60 days. Otherwise, it will not be considered eligible for a SEP. This means if someone gets married June 1st, they have 60 days from that date to change their coverage, after that they will have to wait until that year’s open enrollment period.

Other Qualifying Events

Another qualifying event is loss of health insurance. This could happen when someone is covered under their parent’s plan and ages out if they are covered under their spouses’ plan and they lose that plan, or several other reasons. If this happens your employee has 60 days from the date that their current insurance plan ends to get new coverage or change their coverage through you.

Employee writing on a white board with a blue pen — *Qualifying events are special circumstances that allow entrance to a SEP. These can be as simple as moving.*

A change in residence also gives entitles an employee to a SEP. These mid-year changes are:

Moving to a shelter
Transitioning as a seasonal worker
Going to a new location for school
Entering the US
Moving to a new home

In this instance, the employee must have health insurance before then to qualify. Also, a small move like an extended vacation or sabbatical does not allow for a SEP.

Additional circumstances that might qualify for a SEP:

Starting service in an organization like Service Year or Americorps
Leaving incarceration
Becoming a member of a First Nationer tribe
Becoming a US citizen

The last thing to keep in mind is if any of these qualifying factors do arise, employees will need to have the correct information to verify an SEP. They all require documentation, but those papers are easily found. For example, a birth certificate for a child is mandatory, this is a valid proof of documentation for the verification process.

business owner speaking with her employees about special enrollment periods — *Talk to your employees about these periods. It can be a confusing time, and they will appreciate both your knowledge and guidance.*

If you find yourself looking for a new, or first group health insurance plan, 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.

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.

Differences Between Commercial Insurance and Medicare

Both Medicare and Commercial Insurance have their strengths when it comes to coverage. In this time of debate over insurance and its costs, it’s more important than ever to know the differences between the two.

For business owners, you might be nearing the Medicare age and wondering which insurance you should focus on, or even how to balance them. While both have their merits, they each shine in their own way.

people in a meeting over commercial insurance and medicare — *It’s easier to see the difference between two concepts if you know how they work independently.*

Basically, Medicare was created to absorb risk for people with complex or expensive health issues. Commercial Insurance is a mandatory business expense for companies to operate in our economic sphere. One is social; the other is commercial.

Let’s expand more on these concepts, and how they actually help you.

How Commercial Insurance Helps

You can refer to our guides for commercial insurance if you are starting a new business, but for everyone else, the simple answer is minimizing risk.

Commercial insurance works to protect businesses from extenuating circumstances. From Worker’s Compensation to Business Owner’s Policy, these coverage types are put into place specifically to help businesses navigate through bad luck or human error.

Without this insurance, the negligence cases alone would bury any small business trying to set up. Any theft or property damage could cripple a company, not to mention the rising rate of cybercrime. It’s a dangerous world and the protection offered by this type is critical, if not enforced as mandatory by the state, to make sure business can continue.

How Medicare Helps

Medicare is completely different in conception. Instead of strategically sidestepping risk, it instead was created to help as many people as possible. American citizens pay into it throughout their careers so that when we arrive at either old age or a disability, we can access health care.

Medicare provides protection in these cases only, not for lawsuits or property damage. So, it is more effective for the average citizen. There is still confusion over whether Medicare offers the most coverage or an employer’s group health insurance. For more on that topic, read this.

One For Each Need

With what we’ve covered, commercial insurance is fantastic in the business world, as it has been designed to work in that sphere. On the other hand, Medicare, as a federally administered program, is a different beast entirely.

people discussing commercial insurance and medicare — *A simple look: Medicare is for everyone, while commercial insurance is just for businesses. Each individual must see how these stack in their case.*

While they can be used simultaneously, the different insurance types must be used properly in specific situations. These can be overwhelming to look at, especially if you want to use both to the best of respective strengths. Ready to get your best coverage?

EZ.Insure can give you the help you need to navigate both Medicare and Commercial Insurance. 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.

What Could Climate Change Do to Commercial Insurance?

Climate change has been a hot button issue for a while now, and the debate is only getting worse. While NASA scientists are still working on the culprit, recent disasters have been a direct influence on a rise in insurance rates.

activists raising a sign for climate change — *Both climate change and insurance are difficult topics to discuss. We need concrete facts to move forward.*

Basically, our weather seems to only get hotter each year, causing more intense storms, and while the rates slowly climb, people can only pay for so much. With insurance needed more than ever, we are left to wonder how it will play out.

Global Warming

Scientists create future climate models to predict the weather. Research like this can help save lives by warning people before storms even form. With these studies, scientists find that greenhouse gases are the most rational culprit for the storms we’ve seen.

With more gas in our atmosphere, scientists predict that the planet’s overall temperature will rise. Everything besides the greenhouse gas evidence is just conjecture. However, future predictions lean towards stronger winds, bigger storms, and increases in droughts. Areas like the continental US are already feeling the effects.

While the temperature is what we have evidence for, storms are the main issue here. Global warming will decrease the temperature difference between the poles and the equator, causing a decrease in storm formation. These findings are from research at both Columbia University and NASA’s Goddard Institute for Space Studies. At first, this seems like good news.

view of hurricane forming from space — *Hotter temperatures mean more intense storms and more intense storms mean more damage.*

However, with the temperature changes come more water vapor. As our atmosphere becomes more humid, the number of powerful storms rises. This means we may see less rainfall, and when it does come, it’ll be more on par with catastrophic weather patterns.

Hotter temperatures will also increase hurricane ranges as the weather creates an easier travel route for the storms. More places inland and higher from the equator are affected by the terrible storms, and they won’t be ready for them like currently affected zones.

One other effect of the temperature rising is coastal flooding. Melting ice caps and glaciers can cause a rise in sea-level, terrorizing a coastal populace. While it is still a theory under inspection, the research is strong enough for insurance companies to start looking into risk management.

Our Insurance Costs

Traub Lieberman Straus & Shrewsberry LLP and Aspen Re recently published a white paper detailing current issues for the insurance industry involving climate change. They’ve found that 2017 was the most expensive year for insurance companies involving catastrophic weather. Loss estimates, they claim, totaled $140 billion that year.

Overall temperature increases for the future, even of just 1℃ could rocket these loss estimates even higher. Their 3.7℃ prediction as the extreme would see totals climbing to $551 trillion.

Rostin Behnam, sitting on the Commodity Futures Trading Commission, plans on forming a panel of experts to address these issues. However, studies for how these issues affect our financial sector have been put on the backburner as our current administration ignores the scientific empirical evidence.

What Can We Do?

Like most overhead issues, we must keep them at hand. For these rising insurance costs, California already feels the damages from its recent terrible wildfires, and Texas with the flooding issues affecting the Houston area. These are only small disasters compared to America at large and even the globe. Really, the only thing at a personal level someone can do for global warming is turning to a vegan diet or recycling.

save our planet sign held by an activist — *Activism is a great way to spread awareness, but make sure you’re educated with the latest information.*

We need to understand how the market affects our policies. As catastrophic storms increase, so do damages to people’s homes as well as medical expenses. Our government handles most widespread insurance policy changes.

So, the only task we can do as citizens is to pay attention to whom we are electing, and make sure that our representatives understand the current insurance crisis. You can call or email your representative so that they know this is an issue for their constituents.

Bottom line: We may have skyrocketing insurance claims and the companies may not have the capital to pay it off. We must keep up to date with current insurance laws and work with the companies to write better legislation.

Tag: business advice