Month: November 2015

What is Cyber Insurance? Does my business really need it?

Cyber Insurance is a new and emerging part of the insurance sector. Most of the coverages are so infant that common terms have not yet been established by the insurance industry. Most of the risks associated with cyber technology are so new that many business owners still think they do not effect their business. Those business owner’s are wrong.  In today’s day and age, it is becoming more and more difficult to operate a successful business without a presence online or without storing some type of information about your customers. In these situations a business must have cyber insurance or run the risk of being liable for all costs as a result of a data breach.

Learn how to prevent your small business from being a victim of a cyber attack at myinsurancequestion.com

A normal General Liability Insurance Policy does not cover damages caused by most data breaches. This is a fact many business owner’s do not realize. Many business owner’s think General Liability Insurance is an all encompassing coverage. It is not all encompassing. Most General Liability Policies covers losses due to bodily injury and property damage. Third party information lost in a data breach does not fall under losses covered by a General Liability Policy. A separate Cyber Insurance Policy is necessary in addition to a General Liability Policy.

Frequently business owner’s think they just don’t have enough customers for cyber insurance to be relevant. They might think not enough people in their business even use a computer for business purposes or they do not have enough customers for someone to want to hack them, but the main way data is stolen is not from sophisticated hacking techniques. Data is often stolen by someone stealing a laptop. A stolen laptop could happen to any business, not just those who work with advanced computer technology.

When a data breach does occur, the average cost to a business is around $200 dollars per customer. If your business loses the information of 100 customers, it could cost your company $20,000. If that amount were 10,000 customers it would cost about $2 million. Could your business survive a loss of these amounts? If not than you need some form of cyber insurance.

There are three main types of coverage a company may need:  Cyber Liability, Cyber Security and Technology Errors and Omissions. The first two deal with coverage resulting from a data breach. The third deals with companies that provide technology services and products.

Keep your business secure from a data breach by reading the most up to date information about cyber insurance at my insurance question.com

Cyber Security

Cyber Security is the term most commonly used to refer to first party coverage. First party coverage deals with damages to you and your company. These damages are often referred to as the immediate response costs resulting from a data breach. These costs include notifying all customers who are affected, hiring a forensic team to find out how the breach occurred and providing credit monitoring services for up to one year. These three costs are required by law in most states. Cyber Security Coverage would also cover costs like hiring a public relations firm to help repair your businesses tarnished image and setting up a post breach call-center to service customer concerns.

 Cyber Liability

Cyber Liability is the term most commonly used to refer to third party liability dealing with a data breach. Some industry professionals may refer to it as Information Security and Privacy Insurance. Third party coverage deals with damages to anyone who is not you or your employee, who was harmed by the data breach. It includes customers whose data was stolen or vendors you do business with. This will pay up to the policy limits for court costs, defense costs, some fines related to the breach and lost monies that were stolen from those effected.

Technology Errors and Omissions

The final type of coverage is Technology Errors and Omissions Insurance. This type of policy is a form of liability insurance that helps protect businesses providing all types of technology services and products. This coverage prevents businesses from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in a civil lawsuit. Costly mistakes can and will happen, even to employees with the best training and years of experience. Technology Errors and Omissions Insurance is designed for when these errors take place. A good example where this coverage is necessary would be if a web developer provided faulty coding that causes a business to be closed for several days because their website is down.

Not all businesses need all three of these coverages. The most common coverages businesses need are Cyber Liability and Cyber Security. Not all businesses will need Technology Errors and Omissions Insurance, but those that do typically are at a very high risk if not insured. Most insurance providers prefer to offer these coverage’s as a part of a Business Owner’s Policy (BOP). A BOP usually includes general liability, business property, business loss of income, EPLI and cyber insurance. Offering packages like this contain the cost to the business and helps ensure there are no gaps in coverage. In today’s business climate some form of cyber insurance is essential to all businesses. Is your business at risk?

 

 

What are the main benefits of a Business Owner’s Policy (BOP)?

A Business Owner’s Policy is a tailored insurance package for businesses in a particular industry. The package can be adjusted to fit the needs of each individual business, but they come in common packages specific to each industry. Insurance companies have found certain coverage’s common to each industry and attempt to get business owner’s as fully covered as possible. Most include General Liability, Professional Liability and Business Property Insurance. With a business owner’s policy insurance companies can make sure there are no gaps in coverage and make sure the business is not carrying too much or unnecessary coverage. Carrying a BOP benefits a business owner in three main ways.

Pricing is the main benefit that first attracts business owner’s to carrying a Business Owner’s Policy. Insurance companies are more likely to give businesses a break on price if they are selling that business multiple policies. Business Owner’s may be able to call around and get a better price on each individual policy, but that is time spent not working. With the help of a good insurance agent a business owner can allow the agent to shop the policy around to many insurance carriers. This allows the agent to negotiate the best price and the most complete coverage. For this reason it is important to choose an insurance agent who has relationships with many insurance providers, not just a select few. Many agencies work exclusively with just a few carriers and this does not allow the agent to shop around your policy if you are in a tough classification code or have a negative claims history.

Ensuring there are No Gaps in Coverage is the next benefit of a BOP. Shopping around for each individual policy takes lots of valuable time for business owner’s. In most cases it does not save the business as much as getting a quantity discount by combining coverage’s. A more important benefit of a BOP is making certain there are no gap’s in coverage. When businesses shop their policies around a la carte it can cause there to be grey area’s between exclusion’s that are not covered.  If all policies are bought from one carrier the insurance provider can guarantee you are fully insured.

For instance, businesses that get a general liability policy from one insurance carrier and a professional liability policy from another carrier may have an exclusion in both policies that make the occurrence not covered. This is where insurance has many grey areas. When an incident occurs the business will more than likely have to wait longer while the insurance companies determine who is liable for the incident or if anyone is liable for the occurrence at all. If you have a BOP with just one carrier typically there is General Liability, Professional Liability and an Umbrella Policy. In this case the insurance company just determines which policy is in effect and processes your claim.

Certificates are the final way businesses benefit from BOP’s. Certificates are needed when businesses are involved in projects they are contracted on. A certificate is legally required before work can start on that project. If you work on many projects with different general contractor’s than you will need this certificate for every general contractor you work with. If you have a BOP that is one phone call only.  For example, many artisan contractors do work for several general contractors. Take an electrician as an example. For each general contractor an electrician does a project for they need a certificate proving insurance coverage. If each coverage is with a different carrier that is an additional call the electrician has to make. If that electrician has a BOP they call one agent and can get a certificate for all of their policies.

Again, these are three of the many benefits of having a Business Owner’s Policy. The next time your business is up for renewal it is probably best for you to bring up a BOP with your agent. Insurance carriers are typically more aggressive with discounts when they are getting more of your business.

 

Floridas Workers Comp Exemption Process in 20 Steps

The process for an owner of a company to get themselves properly excluded from a workers compensation insurance policy in Florida is quite cumbersome. In fact, owners not becoming properly excluded is one of the leading causes of workers’ compensation audit balances in the state of Florida. In Florida, an officer or LLC Member can only be excluded if they have a properly filed a Florida workers comp exemption form on file with the state. This can be done in two ways: 1) Complete a form by hand, get a notary signature, and mail the form to the proper Division of Workers Compensation office; or 2) Complete the online version of the form.

Florida workers comp exemption

The handwritten option is not overly reliable. Any errors on the form or if it is sent to the wrong office can cause the form to not be filed. In this circumstance the owner ends up getting included on the policy and will owe additional premium.  The online form is the best solution, even though the process is cumbersome and detailed. That’s why I’ve created this 20-step process for an insured to follow to make sure the officers are properly excluded.

Florida Workers Comp Exemption

1. Go to Sunbiz.org

2. Use the Document Searches Tab to find your Corporation or LLC. It is best to use the Tax ID

3. Make sure the business is in Active status. If not, correct this with the secretary of state before filing your exemption.

4. Your information inputted for your exemption must match Sunbiz. Therefore it is important to have this information handy.

5. For online filing use the link below. Otherwise use the paper form (input form number)

https//apps.fldfs.com/bocexempt/

6. Click the Apply for or Renew an Exemption button

7. Agree to Terms and Use a Pin to access in the future.

8. Section 1:

a. Applicant Name – Name of the person who is being excluded

b. Drivers License Number – select the correct state

c. Last 4 of Social

d. E-mail address – this is not required but helpful

9. Section 2:

a. Select Construction or Non-Construction

b. Select Either an Officer or Member of LLC

10. Section 3: Important to have your Sunbiz paperwork for this

a. Enter all information as listed on Sunbiz. Do Not Mis-Spell

b. Select a Scope of Business from the drop down menu. This is your main workers compensation class code with a 0 in front of the 4 digit code.

11. Section 4:

a. Input the document number listed on Sunbiz

12. Section 5

a. Either complete or check mark the “not applicable” box.

13. Section 7

a. Input other company info the applicant is an officer for

– This does NOT mean that the exemption is registered for each entity. You MUST enter the exemption information for EACH entity the owner is connected with. A separate application is required for each Tax Id.

14. Section 8

a. Verify this is correct

15. Section 9 –

a. Input workers compensation carrier name

16. Section 10

a. Input Name & Drivers License

17. Hit Continue

18. Hit Submit – there is a submit button after you hit continue

19. Processing Time – It generally takes 3-5 business days to process. Check back on the Florida Proof of Coverage website until it shows as registered.

20. If the Application is Rejected – Use the register website above, Click “Modify Application”, input your Pin and correct the problem. Best to contact the Florida Division of Workers Compensation and ask why the application was rejected so you know what to correct. 850-413-1609 option 2

Notes

Most exemptions are only active for 2 years. The exemption must be renewed by re-entering the information online.

Construction exemptions require a payment of $50

It’s very important to check back on the status of the exemption. Several times when registering for exemptions my clients have not received communication and the application didn’t process.

Spelling everything exactly like listed on Sunbiz is VERY IMPORTANT

Are you paying too much for Workers Comp or too much for Payroll? Maybe Both

 

Have you ever purchased a used car or found a great deal on a piece of used furniture at a “sale”?  Than got home to find out it was not the steal you thought when writing the check. Buying commercial insurance can sometimes be this way. It can be a stressful and time-consuming process, especially if you do not have an experienced insurance agent on your side. A good insurance agent can help you find things you might be overpaying for, or maybe some parts of your insurance policy are not set up right at all.

 

For example, I recently worked with a client who’s business is in a high risk agriculture industry. They pay a significant amount on their workers’ compensation insurance each year. This business was part of an alternate service organization, which provided payroll services. It than reports the payroll to their workers’ compensation carrier for the companies Pay-as-You-Go reporting. This was two separate companies doing these processes.

 

In the case of this business we found the workers’ compensation rates were a little high. So to help this business we found a carrier who could save them money on their workers comp coverage. We also found their payroll reporting charges were very high. In this business there are lots of companies that provide work comp and Payroll services. both services. Most of these agencies can offer a better rate because they are getting both businesses. Some try to charge lower workers comp rates, but make up the difference by charging more for the payroll processing side of things or vice versa.  Sometimes it is just that a payroll company knows they can build in a little extra that ends up costing you a lot!

 

For this business we were able to find an aggressive workers’ compensation carrier that provided competitive workers comp rates.  This carrier also integrated their payroll services and collected on a Pay-As-You-GO billing plan. By combining the two services, we were able to save this client nearly $25,000 per year on their work comp premiums and $23,000 per year on their payroll processing. Part of this savings was based on the payroll being reported by a company different than the insurance carrier. This disconnect can cause inaccurate reporting. Many companies work with agencies who actually operate the payroll service in house. They do this with the insurance carrier operations to make this fully integrated. This process also helps prevent fraud by acting as an extra verification procedure.

 

There are a lot of solutions out there for getting coverage in place.  If you can get workers compensation in place on a hard to write class code and get it on a pay-as-you-go basis, it seems like a dream come true.  However, this is an example of how just looking at the down payment or the workers comp rates alone can end up costing your company significantly. It’s always best to review the rates you are paying for this type of plan.  Review what is being charged for all the services provided. Sometimes this is where another company is really making their margin at your expense.

Business Income Coverage

Business Income Coverage

If you are thinking about adding business income coverage or would like to learn more about why you have it, let me start by defining what Business Income Coverage. According to The Insurance Risk Management Institute, business income coverage is commercial property insurance covering loss of income suffered by a business when damage to its premises by a covered cause of loss causes a slowdown or suspension of its operations. Coverage applies to loss suffered during the time required to repair or replace the damaged property. It may also be extended to apply to loss suffered after completion of repairs for a specified number of days. Business income coverage is also referred to as business interruption coverage.

Now that we have defined business income coverage, lets look at how it works.  This coverage is designed to cover what your business lost. Not the businesses total revenue. What is typically covered under this policy is profits, fixed costs, temporary locations, extra expenses, civil authority and few other areas like training cost. Most policies will have a standard 72 hr waiting period before coverage begins. You may be able to modify this if you talk to your agent. They can a;ways check with carriers for additional options to expedite this process. The period of restoration ends when property should be repaired or replaced within a reasonable time-frame. This is in comparison to a similar quality and type of business as yours to either repair the facility or move to a new location.

Business income amounts are determined by comparing historical net income with actual net income during the period of business interruption. The loss is the difference between the net income that would have been earned under normal business conditions and the net profit or loss that has occurred during the period of restoration. Lets say after repairs have been completed that the business is still not generating the business it would have prior to the loss. You can add extended business income coverage to you policy for up to 60 days. For example if your business resumes and income is still below normal amounts then extended business income would pay the difference for that time period.

Also, business income coverage will cover what is called extra expenses. This part of the coverage is for the cost to rent a temporary office space, lease computers or office machines, and installation of new equipment during the period of restoration. Just like business income, this is limited to the 12 months from the date of loss. The time limits on business income may seem like they are not long enough, but according to industry studies most businesses who don’t have this coverage do not reopen their doors.

Business income and extra expense is designed to help you through an uncontrollable event. Within the coverage of most policies it can prevent you from losing key staff members that otherwise would leave to find other employment due to the loss of a paycheck. This is a basic snapshot of the coverage for you to get a grasp of what it can do for your business. In most cases this coverage is already a part of your BOP policy. Many business owner’s look at it and think this could never effect their business, but in reality it can save your company. It will benefit certain types of businesses more than others, but it can help everyone. Retail Stores, Medical Offices, Restaurants, or anyone that operates out of an office location where customers come to you need this coverage. Contractors can also benefit from this coverage, but it is not as critical as locations where customers come to them to generate business.

 

 

Types of Business Insurance

The other day I was going through my emails at work and I notice something that I hadn’t really noticed before. In the past couple months, I have received numerous emails from clients asking what different insurance policies cover and what additional coverage they need. After replying to each individual email, I came up with the great idea to create a template that briefly explains the different kind of business insurance policies a business owner might need.

 

What Types of Business Insurance Are Available?

The main types of business insurance you should consider include:

  • Property and Casualty Insurance: Property insurance covers the physical location of the business (even if it is rented or leased) and its contents from things like fire, theft, flood, and earthquakes—although read the terms carefully to make sure they include everything you need. Casualty insurance, on the other hand, covers the operation of the business, but the two are usually grouped together in policies.
  • Commercial Auto Insurance: Commercial auto insurance covers your business for loss or damage to vehicles used by your business and for damage to others caused by your business vehicles. Note that vehicles used for business are not covered under your personal auto insurance policy even if a vehicle is used for both business and personal purposes.
  • Liability Insurance: Liability insurance covers you in the event someone sues you for negligence, which can occur, for instance, if someone falls on your property.
  • Product Liability Insurance: Product liability insurance covers your business for damages caused by a product designed, supplied, or manufactured by your business.
  • Business Interruption Insurance: Business interruption insurance can make up for lost cash flow and profits incurred because of an event that has interrupted your normal business operations.
  • Health Insurance: Health insurance provides health coverage for you and your employees.
  • Life and Disability Insurance: Life and disability insurance covers your business in the event of the death or disability of key owners, partners, or employees.
  • Workers’ Compensation Insurance: If you have employees, you must, by law, participate in workers’ compensation programs; workers’ compensation insurance covers employees if they are injured on the job.

 

            I get it! Trying to find the perfect coverage at an affordable price is extremely difficult. If you are a new business owner or even a business owner who hasn’t gotten any insurance before, it can be complicated. Not knowing what each term means in a policy is frustrating. That is why I provided a brief description of the basic policies that business owners frequently purchase. Never be scared to call a professional and ask them for more advice. And always make sure you are reading the exclusion page on your policy. You want to make sure you are properly covered for your job. The last thing you want is for something to happen, and realize something isn’t covered under your policy.

Ride Sharing and Auto Insurance

Our country is dealing with some phenomenon’s that we have never experienced before and its causing some big changes in the insurance business.  Not all insurance companies have caught up to the technological advances of Drones, Driverless Cars and Ride Sharing or “Transportation Network Companies” as states are now referring to now.

Drones and Driverless cars are going to have to be an article for another day. For now, companies like Uber and Lyft are quickly changing how Americans get around. They both offer an opportunity for individuals to make money off their personal vehicle by giving others a ride for a fee. Ride sharing is a trend that is developing into a major industry that insurance companies and state lawmakers have quickly had to adjust to. Most states are opening up to this, some more openly than others as you would expect and the same goes with insurance companies.

 

What does Ride sharing have to do with Insurance?

Most personal auto policies are going to exclude business use from coverage on your policy. Many carriers have “business use” as an option, however it is important to know what that means as the coverage can vary greatly from carrier to carrier. So if you are driving for one of the new or existing Ride sharing companies it is important to know your personal auto coverage well. If Ride sharing is not covered at all, you really should take action. Either by seeing if a commercial policy is available with your current insurance company that would cover Ride sharing (not all carriers do) or by shopping for a new personal or commercial auto policy that will cover these operations.

 

Limits, limits limits….

As insurance agents we preach that the state minimum limits are very risky for your personal auto policy. In states like Missouri the state minimum liability limits are $25,000 for bodily injury, $50,000 for total bodily injury and $10,000 for total property damage. Think about the last time you went to the doctor with anything serious. It’s not far fetched to say these types of limits are not hard to meet in any serious vehicle accident. Consider if you were to have a paying customer in the car or possibly multiple. Many articles are pointing out the coverage gaps that Ride sharing brings about. This is important, however the limits of your policy are something that need to be addressed even if your insurance carrier says they will cover the claim. The coverage doesn’t matter as much if the limit of the coverage is too small to cover the claims.

For example; say you were to get into an accident which caused injuries to the another person which resulted in bodily injury claims of $90,000. If you have state minimum limits in Missouri with $25,000 in bodily injury liability per person this means $65,000 of the damages are not covered by your insurance and that goes back to you personally. Forget about mortgage, student loans and all other bills, that is a big hit that leaves nothing for you to show for it. If you had spent a little more on your auto insurance policy and had limits that were more acceptable, your insurance could cover this.

The amount an agent would recommend for auto insurance is going to vary on your individual circumstances and risk. Generally most recommended commercial auto policies have limits of at least $1 Million combined single limit. This allows a sufficient baseline of liability limits to make sure your covered claims are covered to the amount you would need them to be. The minimum limits we would typically recommend for a personal auto policy are around $100,000 bodily injury for each person, $300,000 for bodily injury liability for each accident and $100,000 Property Damage Liability. If you add the Ride-Share exposure, increasing those limits to at least $500,000 or $1 Million individually or combined single limit is better to make sure your protected for the full amount you need. This does cost a little more in premium. However, if a claim occurs the premium difference is the last thing you are going to worry about. Especially if your limits are less than the cost of the accident.