Business Insurance

New Company Insurance and Startup Business Insurance FAQ

What is group insurance?
Group Insurance refers to Medical Insurance plans or Health Insurance plans. These plans are set up for businesses to offer group coverage as a benefit to their workers. As a group, the company can usually get better rates, better coverage and guaranteed acceptance for the employees. Group Insurance plans will usually include low cost group life insurance, group disability insurance and other benefits one cannot get on an individual basis.

Why business insurance is important?
Businesses take risks everyday while running their business. They have to satisfy clients, negotiate contracts, deliver services or products and protect their employees. Some of these risks can be protected or avoided through risk management and business insurance plans. For example, business contents coverage can replace all the furniture, fixtures and inventory of a business if the building has a fire that destroys their business contents.

What is business insurance?
Business Insurance plans are typically a package of coverages. They can include:
Business Liability Insurance (aka Commercial General Liability)
Business Property (Buildings)
Business Personal Property (Contents and inventory)
Business Income (Replaces loss of income due to a covered claim)
Extras (Accounts Receivables, Glass Breakage, Signs, Fire Dept Charges and more)

Do I need business insurance for my business?
Most businesses could use one type of insurance or another. At minimum, general liability coverage is one type of business insurance for all businesses with a permanent location.

How do I find a business insurance company?
There are hundreds of business insurance companies in the US. They can be as diverse as the types of businesses in the country. Finding a business insurance company that insures your business can be a challenge. It is important that you work with a independent professional who can help you shop your coverage among the many business insurance companies to find the best plan for your business.

Who are some business insurance companies?
There are so many companies available, we can only name a few....
Travelers Insurance Company
Travelers Casualty Insurance Co of America
Liberty Agency Underwriters
Penn Star Insurance Co.
Hartford Casualty Insurance Co
Travelers Property Casualty Insurance Co.
Mount Vernon Fire Insurance Co.
General Star Insurance Co
Safeco Insurance Co
Metropolitan Drt Prop & Cas Ins Co
Norguard Insurance Co.
Western World Insurance Co.
Allied Insuance Co.
Preferred Contractors Insurance Co
Lloyds Underwriters

What is service insurance?
Service Insurance refers to insurance coverage for service companies. Coverage includes E & O insurance (aka Professional Liability), Surety Bonds, Performance Bonds, and coverage for property of others (service garages).

Are there different types of business insurance coverage?
Yes, there are several types of business insurance coverage as follows:
Business Liability (Commercial General Liability)
Business Property and Business Personal Property
Workers Compensation
Group Health Insurance
Commercial Property Package
Disability Income Replacement
Key Person
Buy-Sell Agreement Financing
Professional Liability (Errors & Ommisions)

What is the job of an insurance broker?
An insurance brokers job is to be the advocate for the client, not the insurance company. An insurance broker should review the clients business needs and concerns, develop a coverage plan, and then search for the best available plan among all insurance carriers. An insurance broker assists with the application process, billing, and reporting of claims.

What does a business insurance agency do?
A business insurance agency is the support system for the insurance broker. The agency does all of the above, and provides the systems for maintaining client data, organizing renewals and ensuring continuity of coverage.

Business Insurance

Ensuring your Long Term Success with Business Insurance

Running a business can be very stressful. As a business owner, you are dealing with financing, operations, suppliers, marketing and much more.   To ensure your long term success, it is critical for any business to have the right type and amount of insurance in place. Just like your home, car and health insurance; you never want to use it, but it will save you at a time you need it the most.

Unfortunately, many insurance practitioners forget to speak in English, and this unnecessary complicates the basic purpose of insurance: To protect (liability); and to restore (indemnity). Insurance is meant to protect one from liability actions, and to indemnify or restore you to your prior position before an event occurred. The following will provide a brief description of business insurance plans, their purpose, and how they protect a business…

Business Liability (Commercial General Liability)
Business Property and Business Personal Property
Workers Compensation
Group Health Insurance
Commercial Property Package
Disability Income Replacement
Key Person
Buy-Sell Agreement Financing
Professional Liability (Errors & Ommisions)

See below for details...

a.       Business Liability – Also known as Commercial General Liability (CGL) –
Protects the business from liability claims. Types of claims are: a slip and fall, false advertising (common online complaint), contractual dispute, and defective products. This coverage is required when leasing a space for the business. Usual limits are $1 million per claim. It can often be packaged with business personal property, business income and other valuable coverages into a Business Owners Policy (BOP) for additional coverage and savings.

b.      Business Property and Business Personal Property
Business Property insurance is for your owned building. It pays for the repair or replacement of the building in event of a loss. This is similar to home insurance. Business Personal Property refers to all of your business contents. This will replace your furniture, business equipment, supplies and fixtures in case of a loss due to fire, rain, vandalism, theft, etc.

c.       Workers Compensation
If you have employees that only do work for your business, workers compensation insurance is necessary to protect your business. Workers compensation protects the business in event an employee is injured or becomes ill due to a work related incident by paying for the cost of treatment and rehabilitation. With the cost of medical treatment, it is not feasible for a business to pay for a worker’s injuries out of their operating accounts. If an employee is injured on the job and the company does not have workers compensation insurance, the State of California, Department of Industrial Relations will pay the workers claim, investigate the company, and send the bill to the employer for the work related injury or illness. Workers compensation insurance need not be feared. In most cases it is an affordable coverage, and simple steps can be taken to reduce the risk of claims.

d.      Health Insurance
Group Medical Insurance is extremely important for small businesses. At this time, it is the single best way for anyone to obtain health insurance coverage. Group Medical coverage is guaranteed issue; no one can be rejected for existing medical conditions. Group coverage has much better plan options than individual health coverage. Group medical coverage has better rates that individual coverage, and rates calculated by the average age of the entire group. It is important for business owners to recognize the value they can provide by offering even a basic health insurance plan for themselves and their employees.

e.       Commercial Property Package – Combination of coverages for building owners that includes Liability, Property and Business Income coverage. Can be used for Commercial buildings and Apartment building owners.

f.        Key Person
Key Person Insurance is simply a life insurance policy. It is intended to protect an ongoing business in event the key employee or officer dies suddenly. Many business owners rely on the business operations to provide ongoing income for their family and employees. Key Person insurance provides a death benefit to pay for hiring a qualified, experienced person(s) to complete the work of the key employee, and prevent the business from closing down.

g.       Buy-Sell Agreement
A Buy-Sell Agreement is critical to have in place for businesses that have multiple owners. This agreement allows for each owner to buy-out the others share of the business in case they chose to leave the business or they die prematurely. This will allow the remaining owners to operate the business without having outside parties affecting their operation. In event one owner dies, an insurance policy on his/her life, will provide funds to the remaining owner(s) to buy that persons share in the business. This often prevents the break-up of a business from occurring when a spouse or other beneficiaries suddenly become involved in a business.

h.      Professional Liability – Also known as Errors and Omissions (E&O) For professional services providers whose expertise is relied upon by their clients, (ex. Attorneys, CPAs, Engineers, Financial Advisors, Advertising, Web Developers, etc.)

i.        Disability Income/Business Expense - Your Income provides you and your family with all of the assets you have, including a home, cars and living expenses. It can be considered your most valuable asset.   Disability Income Protection replaces your income in the event you become too sick or hurt to work. If you are hurt, your bills and expenses do not stop, and this important coverage would help continue to provide for yourself and/or your family during your recovery. In the event of a qualifying disability, this coverage: Provides a monthly benefit to help cover everyday living expenses, such as mortgage payments, insurance premiums, groceries, etc.   It cannot be terminated or premiums increased before age 65. Additions can be made to cover business overhead and other business expenses while you are unable to work.

Helping businesses, families, and individuals protect their financial future.

New Company Insurance and Startup Business Insurance FAQ