commercial insurance Archives - Page 10 of 12

Thinking of Canceling Your Commercial Insurance? Read This First

Crisis can hit any small business at any time. Unforeseen circumstances, such as the recent pandemic, can force businesses to temporarily close their doors, leaving their owners wondering how to stay afloat. In cases like this, it is only natural to want to find ways to save money. One of the first things you might consider doing to save some pennies is to cancel your insurance policies. But before you do that, you need to know how that will end up costing you more in the long run. Here are 5 reasons why you should think twice before canceling your commercial insurance.

1. You Probably Won’t Get a Full Refund on Your Premium

caucasian hand pulling out the inside of his jean pocket. — *There is no penalty for canceling, but you will not get a full refund on your paid premiums.*

Let’s say you’ve only had your commercial insurance for a few months out of the year when a crisis hits and you need to temporarily close your business. You might think that canceling your insurance will mean getting a refund on the remainder of the premium that you’ve paid for the year. But that is generally not the case: there is usually a penalty for early cancellation of your policy.

It should come as no surprise that insurance companies have ways of protecting themselves against customers buying insurance, using it once, and then dropping it. One way they do this is with a minimum earned premium, which is the minimum amount an insurance company is willing to take for writing a policy. For example, if you have a policy with a $500 yearly premium and you cancel 6 months into the policy, you would get $250 back if there were no minimum earned premium. However, if there is a minimum earned premium of $300 on your policy, the most you could be refunded is $200. Some policies do not have minimum earned premiums, while some have 100% minimum earned premiums, so check your coverage. And don’t forget that most of the taxes and fees you’ve paid on your policy are never refundable.

2. You’ll Pay More to Restart Coverage

If you’re viewing your closure as temporary, remember that, when you reopen, you’ll need to purchase insurance again. This might not seem like a big deal; after all, you’ve already gone through the process once. But there is a problem with canceling and repurchasing commercial insurance: insurance companies view businesses that have had a gap in coverage as more of a risk to insure. This translates to an automatically higher premium for you when you decide to buy insurance again.

red sign with "sorry we're closed" in white — *If you lose your permit or license, then you will have to shut down your business.*

3. You Might Lose Your Permits or Licenses

Does your business require special licenses or permits? At the very least, you probably needed to obtain a business license when you opened your business. Getting those permits and/or licenses was probably time-consuming at best, and a downright pain at worst – and remember that you probably needed proof of general liability or workers’ comp insurance to get those permits or licenses. If you cancel your business’ insurance policies, you risk losing the permits and licenses you worked so hard to get, and you might need to go through the process all over again. In some cases, you might even struggle to get them back: for example, if you own a restaurant with a liquor license, you might end up losing it to another business, since there are only a limited number of them given out in each city.

4. Your Property Will Be at Risk

An empty business, such as a storefront, will always be at risk of theft and vandalism, even if you’ve boarded it up and protected it as best you can. Your commercial property insurance is what protects you from having to pay for damaged or stolen property; without it, you’ll be left with all the bills.

5. You Could Find Yourself in Default

If you’re like most small business owners, you rely on one or more types of financing: a mortgage on a property, or a lease on equipment. Before you cancel your insurance policies, be sure to check the fine print of your mortgage or lease – you might find that not having insurance will mean defaulting on your loans, even if you’re up-to-date on your payments. You could lose your workspace, or have your valuable equipment repossessed, simply because you don’t have the required insurance policies.

Falling on hard times or facing a crisis is never easy. But add to the mix the business you’ve worked so hard for, and you may end up having to make some difficult choices. One thing to remember, though, is that your commercial insurance policies are there to protect your business, and any money you may save by dropping them can end up being canceled out in the long run. If you need help, or have any questions regarding any type of commercial insurance, EZ.Insure is here with the answers. Speak with your own personal agent, any time, for free. To get started with us, simply enter your zip code in the bar above, or you can speak to an agent by calling 888-615-4893.

EZ Can Help You Avoid Falling Into These Liability Traps

Owning your own business can be a liability landmine. Just one mistake can mean the end of the business that you’ve invested so much time and money in. The biggest mistake you can make is not having the right commercial insurance coverage. EZ knows you worked hard to start your business, and we want to help you keep it going strong. We can guide you through some of the common mistakes business owners make, and the ways we can keep you protected against them.

laptop with a red warning sign on the middle of the screen. — *A cyber attack can leave you feeling violated, scared, and confused, and it can also ruin your reputation.*

Not Protecting Your Business Online

So much of our business is conducted online these days, and not having cyber liability insurance is one of the biggest mistakes you can make. Not only are there a lot of scammers out there working hard to get your financial information, but anyone with access to your company’s accounts – including employees – can steal information and create data breaches. A cyber attack can leave you feeling violated, scared, and confused, and it can also ruin your reputation. If customers’ data is breached, then you will lose their trust, their business, and any future business.

Malware is one of the biggest threats when it comes to cyber security. In 2018, malware cost companies upwards of $2 million, which was an increase of over 10% from the previous year. To keep your business protected from this threat, EZ.Insure offers cyber liability policies that cover:

Lost or damaged electronic data
Computer operations interruption
Privacy & Notification to customers and other affected parties
Lawsuits (in certain types of policy)

Not Protecting Your Workplace

Another major mistake business owners make is not taking into account all of the things that can go wrong at their place of business. Accidents and natural disasters happen. Customers or employees can get hurt at your business, meaning you could end up being sued. A storm could come along and rip through your building. If you are not insured against all likelihoods, not only could you lose your business, but you could go bankrupt, as well.

We’re a business, too, and we get how scary the thought of losing everything can be. That’s why we’ll compare quotes for you on the most important types of commercial liability insurance, like:

General Liability – protects you against lawsuits claiming bodily injury or property damage. It also provides coverage for personal and advertising injury like libel or slander.
Property Liability – protects everything in your business from risks such as fire or theft. There are commercial insurance packages available that will bundle liability and property coverage.
Workers Comp – covers medical expenses and lost wages for an employee who is injured at work. This type of coverage is required by individual states.

Not Delivering on Your Promises

Finally, don’t make the mistake of assuming every customer is going to be satisfied with you and your business. Sometimes you try to offer the best possible service or advice to your customers, but you just fail to deliver. If you break a contract, give advice that leads to loss, or don’t complete a project, for example, then you could end up facing a lawsuit. To protect yourself and your business from these types of claims, you need to have professional liability insurance.

Whether you are starting up a business, or already have one and are looking into commercial insurance, then EZ’s got you covered. We will compare quotes of all the types of insurance policies that your business needs, and will help you choose the best ones for you. Let us help you protect the business that you worked so hard to build. To get free commercial insurance quotes, enter your zip code in the bar above or to speak to an agent call 888-615-4893.

Claims-made vs. Occurrence Policies: What’s the Difference?

Claims-made. Occurrence policy. Coverage trigger. It can feel like commercial insurance has its own foreign language sometimes. But don’t worry, all of these terms can be broken down into plain English: claims-made and occurrence policies are simply the names for the two basic types of commercial liability policies. The difference between them is how their coverage is activated, or triggered – in each of these policies, the timing of the “triggering” event is key. Let’s take a closer look at what is meant by coverage trigger, how these policies work, and which type you can expect to be offered when choosing a policy.

Coverage Triggers

As you already know, purchasing commercial liability insurance alone or as part of business owner’s policy is an important part of protecting your business. This type of policy covers you for any damages that you are legally required to pay following an occurrence that causes bodily injury or property damage. The word “occurrence” here actually has a definition: according to the International Organization for Standardization (ISO), an occurrence is “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” In plain English, what all of this means is that you pay your premium, and, in exchange, your insurance company takes on the risk. They pay any claims made against you, whether they be for a customer slipping on a wet floor, a pipe bursting due to your faulty plumbing work, or any other accident that leads to damages.

The occurrence described above is what leads to the claim being made against you – or “triggers” your coverage – which is why it’s called a coverage trigger or trigger of coverage. This is not to be confused with another term you may have heard: conditions of coverage. Conditions of coverage are the actual steps you have to take after the coverage trigger occurs, including notifying your insurance company of the claim and providing any evidence or documentation required.

Occurrence Policies

Now that we’ve gone over what a coverage trigger actually is, we can look at how the timing of the trigger makes all the difference in the two different types of liability policies. What matters in a commercial liability policy is when the occurrence happened versus when the claim was made. An occurrence policy is triggered by an injury or accident that takes place during a specific coverage period. It does not matter when the claim is made, just when the occurrence happened.

*Damage that triggers a claim that took place within the policy period would be covered under occurrence claim policy, even if the claim is after the policy has ended.*

For example, let’s say a plumber buys a liability policy on an occurrence basis, with an effective policy date from January 1, 2019 – December 31, 2019 and a claim is reported against them in February 2020, for faulty work that they did in March 2019. This claim would be covered under their policy, because the damage that triggered the claim took place within the policy period. It would not matter if the claim was reported after December 31, 2019.

These types of policies are particularly useful for covering things like product liability, environmental liability, occupational diseases, or other things that can have a longer reporting or settlement time.

Claims-made Policies

*Claims-made policy will only cover incidents reported during the active policy period and after the policy’s start date.*

While most liability policies purchased by small business owners are occurrence policies, there are some types of policies, like errors and omissions, which are usually written as claims-made. Some small business owners, however, choose to buy claims-made policies simply because they are usually the cheaper of the two. This is because they tend to provide less coverage; occurrence policies are more expensive because there isn’t a time limit on when a claim can be reported and still be covered. This is not the case with claims-made policies.

When a policy is written as claims-made, it means that the policy will only cover incidents reported during the active policy period and after the policy’s start date, or retroactive start date, if that applies. A retroactive start date is the specific date the policy’s coverage begins. This is usually the policy’s effective date, or a date in the past that you and your insurer agree upon. If you’re shopping for a claims-made policy, it’s best to look for one without a retroactive date, so that you have a longer range of coverage. In addition, if you’re looking for more coverage with a claims-made policy, you can add a provision known as an extended reporting period, or “tail coverage,” to your policy to extend the amount of time you can report a claim after the policy’s cancellation.

An example of how claims-made policies work is as follows: the plumber from above purchases a claims-made liability policy with the same effective date of January 1, 2019 – December 31, 2019, but because it is claims-made it has a retroactive start date of October 1, 2018. If the plumber causes the damage on November 10, 2018 and the claim is made on March 2, 2019, it will be covered because it occurred after the retroactive date and was reported during the policy period. If the work had been done prior to October 1, 2018 or if the claim had been reported after December 31, 2019, it would not have been covered.

We get it, there’s a lot to learn when you’re shopping for commercial insurance. But the time spent researching is worth it: finding the right kind of insurance for your business can mean the difference between protecting it and losing everything you’ve worked so hard for. But remember, you don’t have to go it alone – EZ.Insure is here to help. We’re ready to set you up with your own personal agent who will answer all your questions, walk you through the process, and sign you up when you’re ready – all for free. Get started with us today by entering your zip code in the bar above, or you can speak to an agent by calling 888-615-4893.

Your Hurricane Season Insurance Checklist

Multiple researchers and weather organizations are predicting a more than usually active hurricane season this year. According to noted forecasters at Colorado State University, we could see 16 named storms, 8 hurricanes, and 4 major hurricanes develop in the Atlantic Ocean during the June 1 – November 30 hurricane season. When you consider that an average hurricane season brings around 12 named storms, 6 hurricanes, and 2 major hurricanes, these predictions could mean big trouble for the eastern seaboard of the United States.

If your business is located in an area that is considered vulnerable to hurricanes (or really anywhere on the east coast – remember Hurricane Sandy in 2012?), then you need to take the time to seriously review your insurance coverage, and make sure that your business is protected. A great way to start is by reviewing our hurricane season insurance checklist.

The Impact of Hurricanes

Before we start on the specifics, let’s take a look at some examples that illustrate how hurricanes affect businesses. On a large scale, the impact of hurricanes on businesses can sound astronomical: Hurricane Dorian in 2019 caused an estimated $25 billion in insured damages, Hurricane Irma in 2017 caused businesses to lose a staggering $2.75 billion in sales, not including damages to property, and Florence in 2018 caused around $700 million in lost sales.

It may be hard to wrap your head around those figures, but consider that, according to the U.S. Small Business Association (SBA), 90% of small businesses fail within two years of being struck by a disaster. It’s not hard to see why. Take the example of John Treece, founder and CEO of DMA Sales, which sells automotive parts to big box retailers and distributors out of Tabor City, North Carolina. His business was hit hard by Hurricane Florence in 2018, and he had to close up shop for 2 whole weeks. He also lost the roof of his warehouse when it was literally “peeled off” by the wind, which caused a further $200,000 in water damage to his inventory. Many small businesses would not be able to survive a long-term closure or such a huge financial hit. That’s why making sure you have the right insurance is so important.

The Checklist

It is clear that hurricanes can have an overwhelming financial impact on the economy as a whole. And the individual example above makes clear that behind all of those big numbers, there are many small business owners who are left struggling to keep their businesses afloat. The right insurance policies can help.

Although small business owner John Treece was hit by one hurricane, the damages done to his business were caused by different things: wind, water, and forced closure. He would actually need multiple types of insurance policies to make sure that his losses were covered. As a business owner, you need to sit down and evaluate what you currently have and what you might need from the following checklist:

Property Insurance – most of your business’ hurricane coverage will come from your commercial property insurance. If you have a bundled Business Owner’s Policy (BOP), then general property damage will be covered under this policy. However, if you are in a hurricane-prone area, then it’s a good idea to take a closer look at what type of property coverage is available based on your location, your proximity to the coastline, and your carrier. Depending on these factors, and how much you are willing to pay, you may have:

All Peril – this is the most comprehensive type of policy, and will cover everything except what is specifically excluded from it.

Named Peril – this type of policy is cheaper than All Peril, but covers a lot less. As its name implies, it covers only what is named in the policy.

Wind and Hail – this is the cheapest of the policies, but it only covers damage caused by wind and hail. If rainfall is a concern, you will need a more comprehensive policy.

Flood Insurance – if there’s a chance that you could be hit by a hurricane, it is vitally important to know that water damage is NOT covered in the same way as wind or storm damage. In John Treece’s case above, his water damage should be covered as storm damage under his property insurance policy. Why? The difference is where the water comes from. His water damage was a result of rainfall from above. If, however, rising water had flooded his warehouse, he would have had to have flood insurance to cover his losses. Rising water is not covered under most policies, so make sure you are not only covered for wind and storm damage, but also flood damage.
Business Interruption Insurance – the above policies cover the physical damage to your business, but what about the losses you will incur from having to close your doors for an extended period of time? Repairing your business won’t be much use if you lose so much money that you are unable to reopen. Business interruption policies will help cover things like lost profits, employee wages, and the costs of a temporary location. These types of policies are add-ons to your other commercial insurance, so ask your agent about your options.

Don’t Forget the Basics

If you already have all of the policies above, great – but don’t sit back and relax yet. Don’t forget to check all the basics related to your policies, like:

Are the policies up-to-date?
What are the deductibles, and are there deductibles that are specific to named storms/hurricanes?
Do you have off-site property or inventory, and is it covered?
What could happen if you need to evacuate and leave your business empty for days or weeks? For example, could mold become an issue and, if so, will your policy cover the clean up?

Hurricanes and major storms will happen. Nothing can change that, and nothing can fully take away the stress and heartache of seeing all of your hard work threatened. But the right insurance policies can help to make things right if the worst happens. At EZ.Insure, we’re here to help you find the right coverage. We’ll connect you to your own knowledgeable agent who will review all of this information with you and find the right plan at the right price for you. No hassle, no obligation. Let us help bring you peace of mind. To get started simply enter your zip code in the bar above, or you can speak to an agent by calling 888-615-4893.

Legal Drugs and Your Workforce: Is Medical Marijuana Covered?

Though some still find it controversial, medical marijuana is now legal in 33 states and the District of Columbia. Doctors may prescribe it for the treatment of (or relief of symptoms of) conditions ranging from multiple sclerosis, to glaucoma, and cancer. It can stimulate appetite and calm patients receiving palliative care. But one of the most common uses of medical marijuana in the United States is pain control. This is especially important now, as we have seen the damage that opioid addiction can do.

Medical marijuana could be the answer to our overuse of opioids. One study analyzing Medicaid prescription data from 2011-2016 found that states that have legalized medical marijuana use saw a nearly six percent drop in opioid prescriptions. It’s hard to know if legal weed is the sole reason, but it is not a big stretch to say that it helped.

man on a stretcher being picked up by two men in orange pants. — *When a worker is injured on the job and is in pain, the worker’s doctor prescribes treatment covered under their employer’s workers comp policy.*

So if medical marijuana could possibly be a viable alternative to opioids for relieving pain due to injury, then is it something that is covered by workers comp? This is a question that has not yet been fully decided, and there is some confusion about how it works in each state – and how others are trying to make it work.

How Does Coverage for Medical Marijuana Work?

When a worker is injured on the job and is in pain, things are usually straightforward from there. The worker’s doctor prescribes treatment, which is covered under their employer’s workers comp policy. But what happens when that treatment is largely unregulated, the way that medical marijuana is? In the case of marijuana, a physician recommends the use of it and the patient chooses the method of ingesting it. Dosage and price are also still mostly unregulated, causing further confusion to insurance companies, and further resistance to covering marijuana as they would other treatments.

According to Brian Allen of Mitchell International Inc., a technology firm that manages pharmacy transactions (among other things related to workers comp), “I am not aware of any circumstance where an insurance carrier or employer is providing reimbursement directly to a dispensary.” So how do injured workers get coverage for their recommended treatment? A patient must head to a dispensary, seek out the products, and then file for reimbursement from the payer. Most insurance companies are still a bit cagey when it comes to how they are covering this drug, and aren’t giving out much information. Most are simply saying things such as this from one of Liberty Mutual’s medical experts: “We take each case on its own merits.” Some simply won’t cover it at all, like Nationwide.

medical marijuana — *Medical marijuana could be the answer to our overuse of opioids. But not all states cover it.*

How Some States Are Ruling

Much of the above confusion and complication is due to the fact that the federal government still classifies marijuana as an illegal Schedule 1 substance. This means that marijuana is treated as the same as drugs like heroin. This makes for a tricky situation when employers are being asked to pay for an injured worker’s use of the drug, and when insurance companies are evaluating workers comp claims.

Not only are dosage and cost unregulated, making for a headache in deciding what and how to cover it, but there may be some fear that the federal government will enforce the laws against marijuana. And, since it remains illegal, carriers have grounds to deny coverage of it as a legitimate treatment.

Because of the situation at the federal level, states are handling the use of medical marijuana for workers comp in different ways. For example, in the 2014 case Vialpando v. Ben’s Automotive Services, New Mexico’s state court of appeals upheld the validity of a workers comp claim, and directed a worker’s employer and insurance company to reimburse them for the medical marijuana they were using for pain relief. This was the first ruling of its kind, and it was followed by others: in 2017, a New Jersey administrative law judge made a similar ruling. Minnesota, Connecticut, and Maine also followed suit.

This is all a step in a positive direction for those that advocate for the use of medical marijuana for pain relief, and for those that believe injured workers should have access to it. However, other states have been more resistant. Arizona, for example, has decided that a provider cannot be compelled to pay for medical marijuana, because the drug is still illegal under federal law work.

One thing is clear about medical marijuana, whether you are in favor of it, or against it: it is not going away anytime soon. For some, it is the future of treatment for many conditions, and a way to decrease opioid use. For others, it’s an insurance nightmare.

Flood Season Is Here: Is Your Business Covered?

Every year, the U.S. suffers on average $8-10 billion dollars in damages from freshwater flooding. Massive storms in August 2016 pushed that number to around $15 billion. But what do these numbers mean for individual business owners?

At least 13 million properties in the U.S. lie within flood zones, according to FEMA (Federal Emergency Management Agency). If your business is located in a flood-prone area, it is definitely wise to check your flood coverage, as well as check whether or not you are required to be covered.

The average cost to a business affected by a flooding event is a concerning $90,000. Moreover, about 25% of businesses that close due to flood damage never reopen, according to the Insurance Institute for Business and Home Safety. Flooding is obviously a serious issue, so let’s take a look at the ins and outs of insurance coverage for this catastrophic event.

Is Your Business Covered?

The first question you need to ask is whether or not your business is covered for floods. If you have a standard commercial insurance policy, the answer is no. Damage caused by some types of natural disasters – such as those involving lightning or wind – are usually covered, but water-related destruction is usually treated as a separate case. If you want your business to be protected from flood damage, then you will need to buy a special policy.

Is Your Business Required to Be Covered?

Some businesses are actually required to purchase a flood insurance policy. Flood insurance is mandatory if your business is located within a flood zone and is mortgaged through a lender that is insured or regulated by the federal government. Whether you are located in a flood zone is not a matter of opinion; rather, FEMA has created flood maps that designate certain areas as Special Flood Hazard Areas (SFHA). An SFHA is an area that has been determined to have a 1% annual chance of flooding every 100 years. Flood maps are available online; check to see if you are located in one of these areas.

cartoon of a woman pushing a door closed to prevent water from coming in. — *It may be wise to consider flood insurance, especially remembering that the average claim for flood damage is around $90,000.*

Should Your Business Be Covered?

You might feel that if you are not located specifically in an SFHA, then you do not need to purchase flood insurance. While you are not required by the government to do so, it may be wise to consider it, especially remembering that the average claim for flood damage is around $90,000. Some recent studies are suggesting that FEMA’s maps are inadequate and don’t show the full picture of flood risk, so you may be laboring under a false sense of security. Even FEMA acknowledges that over 20% of flood claims come from businesses located outside of SFHAs.

Take into consideration your actual risk. For example, is your business in an area that experiences heavy snows in winter and warm springs, leading to fast thaws? Are you in an area prone to moderate to heavy rainfall? If so, clogged drains could spell disaster. Ask yourself questions such as these and, if the answer is yes, it is probably best to consider adding a flood policy.

How Do You Get Flood Insurance?

Whether you are required to get flood insurance or you have decided that it is best for your business, the only way to get a policy is through the National Flood Insurance Program (NFIP). However, the government does not sell policies directly; you will have to contact an insurance professional who is familiar with the NFIP. To get started, simply enter your zip code in the bar above, or speak to an agent by calling 888-615-4893.

What Does Flood Insurance Cover?

Once you decide to buy flood insurance, it is important to know what it covers (and doesn’t cover). Generally, for small to medium-sized businesses, there are two types of policies:

Commercial Contents: this type of policy provides coverage for your inventory, merchandise, machinery, tools, equipment, fixtures and any other contents within your business. Covers up to $500,000.
Commercial Building: this type of policy covers the actual structure of your business. If you don’t own the building, then the policy will cover any improvements you made to it. Also covers up to $500,000.

You can purchase both types of policy, thus giving you up to $1 million in coverage.

What Doesn’t It Cover?

two hands with pens in them pointing at paperwork. — *Discuss with an agent what type of flood insurance you want and what coverage you are looking for. They will notify you what flood insurance does and does not cover.*

You should also be aware that there are some things these policies don’t cover, including:

Vehicles
Financial losses caused by business interruption
Property and belongings outside of the building
Mildew and mold may be covered, but is evaluated on a case-by-case basis
Damages caused by sewer or drain backup (unless caused by a flood, which is defined as waters covering at least two acres or affecting two properties). Remember that if waters come from above (like rain clogging gutters and leaking onto your inventory), you may be covered by your standard commercial insurance policy.

Now that you have the facts about flooding and the protection available, you can make an informed decision about what is best for you and your business. If you need help connecting with an agent, or have any questions about any aspects of commercial insurance, EZ.Insure is here to help – and we will always do it completely free of charge. And we’ll never hound you with phone calls the way other companies do. To get started, simply enter your zip code in the bar above, or speak to an agent by calling 888-615-4893.

Tag: commercial insurance