Have a Work Comp Audit soon?

Here are 7 tips for a Smooth Workers Compensation Audit

Each year all businesses must go through a workers compensation audit process. If you are like most small business owners, this is not one of your favorite parts of owning a business. The process can be long a tidious, but the more prepared you are for this process, the more quick and more smooth the process will be. Consulting with your independent insurance agent can help you prepare for the process and make sure the audit is done well the first time through the process. Here are 7 ways to ensure this process goes as painless as possible.

Communicate with your agent.

Open communication with your insurance agent is essential to a smooth workers compensation audit. This is a reason why it is important to consider an independent insurance agent. An independent agent is not as closely associated to the insurance carrier. They can help you prepare for the audit and negotiate on your behalf if anything does not go in your favor. Open communication throughout your relationship with your insurance agent is essential to a satisfied experience during your small businesses workers comp audit.

Have paperwork prepared in advance

Having all necessary paperwork prepared in advance of your audit will make the process move as smooth as it possibly can. This includes any and all payroll and employee records. Job descriptions need to be included for each employee and their annual weeks, days and hours worked. The more detailed the better.

Payment and cash disbursement records,

Throughout the year it is important to keep a record of all payments and cash disbursement. Not having these available and organized is a good reason to have the auditor dig a little deeper. The more open, honest and organized you are throughout the entire audit process the more smooth the process will be.

Certificates of Insurance

In order to ensure a smooth workers compensation audit, make sure to keep a detailed record of all needed certificates of insurance for any and all sub-contractors or independent contractors your business used. The primary reason for providing these documents is that if you do not, these contractors will be listed as employees and it can substantially raise what you pay in premium.

Experience Modification Worksheet

The experience modification worksheet is a document that is published annually by the rating bureau in your state. It covers the loss history for your business during the most recent three-year period, not including the most recent year. The most recent year is not included due to overlap from some claims not being closed. If you have had a large claims or a large amount of minor claims during any year it is important to have this worksheet available in order to show the true loss history of your business.

Make yourself available for the exit interview

After a typically smooth workers compensation audit there is an exit interview at some time. It usually lasts several hours and is a way for the auditor to ensure they have all the necessary information to accurately audit your business. The more up-front you are with the auditor the more smooth the process will be.

Respond promptly to auditor follow-up questions

There will more than likely be questions you do not have the answer to, the auditor will have for you during the audit. The more quick and more thorough you respond to these questions the more the auditor will work with you to promptly and accurately finish the audit process. The time period after the audit, before the auditor will finish the process, normally takes two to three weeks. There may be additional questions that need clarification. This may be a frustrating part of the process, but the more accurate the audit is the better it is for your company. Your agent can help you with any of these questions if you are having a trouble finding the exact information to satisfy the auditor. It is also important to keep in mind that for security purposes, the auditor does not keep your payroll records. You very likely will be asked to provide additional information or records that you have already provided.

An Accurate audit is in your best interest, moreso than a fast audit. This process is frustrating even during a good audit. It will take time away from your normal work, but it is within your best interest to ensure your audit is fair and accurate. Keep a positive attitude and consult your independent insurance agent in order to ensure your audit process goes as smoothly as possible.

5 cool projects recent grads in the risk management industry may work on

Guest writer Matt Krumrie with College Recruiter

Careers in risk management and commercial insurance may sound dry to recent grads, but that couldn’t be further from the truth, says Peg Newman, Partner with Sanford Rose Associates, Newman Group, an executive search firm that has been placing professionals in the risk management and commercial insurance industry for over a decade.

Risk Management

So what do risk management professionals do? According to this risk management career profile “risk management involves assessing and quantifying business risks, then taking measures to control or reduce them. Risk management often is part of the compliance function, but also may be part of specific business units, such as securities trading desks or loan origination departments.”

“The wow for people who join the field is that they will be trained to provide business consultation services to companies of all types and sizes,” says Newman. “Risk management professionals work directly with company leadership of small mom and pop shops up to multinational businesses with interests in many different industries.”

Risk managers evaluate and make recommendations for insurance coverages, business process changes and more. Aspiring risk management and commercial insurance professionals should not only develop skills specific to risk management and insurance careers, but they should also understand sub-sectors within a wide variety of industries, such as manufacturing, health care, technology, engineering, consumer products, and more. If there is a business or an industry, it needs someone with a risk management background. There are are also subsectors within these industries that need expertise. Operations, cybercrime, human capital, finance, management, workers’ compensation, safety, training, and more, says Ryan Daniele, Director of P&C Operations for MJ Insurance, one of largest privately held insurance agencies in America, with offices in Indianapolis and Phoenix.

So what exactly do interns or recent college grads working in risk management within the commercial insurance industry do all day? Check out these 5 cool projects as described by Daniele.

Loss control visits: Several things are conducted during a loss control visit, and the needs of the visit vary, says Daniele. The visit could find the risk management professional analyzing property (brick and mortar), potential safety hazards, workers’ compensation exposures, and examining auto fleet (if applicable).

“These initial visits typically end with recommendations for improvement upon those risk management controls and require a follow-up visit,” says Daniele. “Company loss control is really another set of eyes to help a client improve their risk controls that they may already have in place.”

Loss control consultants (sometimes called risk engineers) can also conduct training, says Daniele. Some are certified to offer ISO training that is required for many manufacturers. They also can do fleet safety, lock out/tag out (for proper machinery operation), and forklift training, among many types of training.

“A loss control visit is an excellent way to get to know and understand the operations of our clients (insureds) because we get to be really intimate with what they do,” says Daniele. “We typically get to tour the facilities and get to see the operations while they are going on. It can be very interesting. We feel that it is a great way to see another aspect of risk control and how we can help our clients in a multitude of ways and it exposes them to many facets of risk management and risk consulting. It helps tie into why they need specific coverages and why certain losses may happen.”

Policy maps: Interns and entry-level employees are creating visual diagrams depicting current coverages and coverage gaps to C-level executives. This work is non-industry specific, so this can have an impact on any type of client, or company, big or small.
Self-insurance project: Risk management professionals in the commercial insurance industry research rules and costs associated with being self-insured for workers compensation. The task involved discussing self-insurance requirements with individual state insurance departments/rating bureaus.
Client visits, including sales calls: It’s important for interns and recent college grads to attend client visits. “We do this so they can see what our interactions look and feel like,” says Daniele. “To me, this is a very valuable experience getting to sit in front of clients and being a part of a business setting. We also strive to give our intern different dynamics depending upon their interest. We don’t want them sitting behind a desk the whole time.”
Special projects: This may include working with account managers to review specific accounts, seeking specific coverages in policy language, review of insurance schedules, policy checking reviews, and other projects as needed. “It’s quite a variety,” says Daniele.

For example, one intern recently went through cyber training, and will be accompanying other team members at a client meeting dealing with their cyber security risks/needs. Another is spending time within the risk analytics department, learning policy maps and loss analysis – critical elements of risk management.

Exploring a wide variety of project work, and taking on new challenges early in one’s career can better prepare them as they move forward in their risk management career. And a diverse background and variety of experiences can lead to more career opportunities in the future.

“It’s endlessly interesting, and every business needs insurance and risk management tailored to their specialized business and the scope of their operations and their risk,” says Newman.

College Recruiter

BIO

Matt Krumrie: Matt is a freelance writer and digital media professional. He regularly contributes to College Recruiter, which believes that every student and recent graduate deserves a great career. College Recruiter features thousands of articles, blogs, videos, and other content as well as 300,000 internship and entry-level postings for open jobs. Matt’s writing focuses on careers and jobs, business and sports. He is also an expert resume writer who works with clients all over the U.S. to help write professional resumes that get results. Follow Matt on Twitter @MattKrumrie.

HVAC Contractors

Heating and Air Conditioning Contractors ( HVAC Contractors ) are those business that provide services for and repair heating and air conditioning units. They provide these services for both commercial and residential clients. They have to be knowledgeable about both duct and vent work, the different types of fuel sources for heating equipment, which can be natural or LP gas, electric, steam, solid fuel, coal, or fuel oil. Many contractors also install, service, and repair air conditioners. While air conditioning units are normally electric-powered, they are charged with different coolants, some of which may be hazardous.

All of these different types of work bring their own unique risks to the contractor. For this reason, it is very important for you to have an extended conversation with your insurance agent about all of the types of work you do and do not participate in. It is equally important to inform your agent if there are certain types of work you do not partake in. There are more than one classification code for this industry and the types of risks you take on can dramatically impact what you pay in premium for a number of commercial insurance policies. Below are 6 policies most HVAC Contractors need to secure in order to protect their business properly.

• General Liability

• Property Insurance

• Hired and Non-Owned Auto (full commercial auto if vehicles owned)

• Inland Marine

• Business Income with Extra Expense

• Workers’ Compensation

General Liability Insurance

General Liability Exposures at the contractor’s office or shop are generally limited due to lack of public access to the premises. Retail sales increase the possibility of customers slipping, falling, or tripping if customers visit office to view products.

Property Insurance

Property exposures at the heating contractor’s own location are generally limited to those of an office, shop, and storage of materials, equipment, and vehicles. Operations may also include retail sales. The fire exposure is generally light unless repair operations involving welding take place on premises. Welding involves the use of tanks of gases that must be stored and handled properly to avoid loss. The absence of basic controls such as chained storage in a cool area and the separation of welding from other operations may reflect a greater risk.

Commercial Auto

Automobile exposures are generally limited to transporting workers, equipment and supplies to and from job sites for HVAC Contractors. Hazards depend on the type and use of vehicles and radius of operation with the main hazards being upsets. Vehicles may have special modifications or built-in equipment such as lifts and hoists. Large heating systems may be awkward and require special handling and tie-down procedures. Age, training, experience, and drivers’ records, as well as the age, condition and maintenance of the vehicles are all important items to consider. If employees utilize their own personal vehicles for work related tasks then Hired and Non-Owned Coverage should be purchased.

Inland Marine Coverage

Inland marine exposures include contractors’ tools and equipment, including ladders and scaffolding, hoists, and portable welders, the transport of materials, and installation floater. Goods in transit consists of tools and equipment as well as products purchased by the customer for installation at the job site. HVAC units can be of high value and susceptible to damage in transit; they frequently require expertise in loading to prevent load shift or overturn.

Workers’ compensation

Workers compensation exposures vary based on the size and nature of the job. Both residential and commercial work involves lifting, work with hand tools, wiring, and piping. Cuts from the fabrication and installation of sheet metal for ducts and vents are common. Lifting injuries such as hernias, strains and sprains plus back injuries may occur. Electrical burns are common; electrocution can occur from the use of high-voltage lines. Any time work is done above ground, injury or death from falls and being struck by falling objects can occur. Slips and falls, foreign object in eyes, major and minor burns, and inhalation of fumes are all potential hazards.

Auto Repair Shops

Direct Primary vs Legal Liability for Auto Repair Shops

The difference between Garage Liability Coverage and Garagekeepers Coverage is the difference between liability insurance and physical damage insurance. The first (liability insurance) covers the insured’s liability for operations, autos, and the second (physical damage insurance) covers damage to customer’s vehicles at auto repair shops. All garage risks need both coverages to properly insure their loss exposures.

Auto Repair Shops

A Garage Keeper’s Legal Liability policy is intended to cover damage to an auto held in their care, custody, or control while it is on consignment for sale or you are servicing, repairing, parking, or installing equipment into the vehicle. Direct Primary Coverage provides coverage even if the loss is not the insured’s fault and is not legally liable. On the surface, this seems relatively easy to understand.

For Example, a customer’s locked vehicle is in a fenced and locked yard. There is adequate lighting in the yard and the vehicle alarm is armed. The electronics are ripped from the vehicle and there is $25,000 in lost equipment and damage. Although you are clearly not negligent – and not legally liable – the claim is submitted to my insurance carrier.

With Direct Primary Coverage, the customer – the owner of the vehicle – is paid no matter whose fault it was. You have a happy customer again and your insurance paid for everything. Well that is great until renewal time, when we can assume that the insurance company will raise the Garage Liability premium by a substantial amount because of the claim. That $25,000 claim typically will continue to affect your premiums for three years.

If you had purchased Legal Liability Coverage, the owner of the vehicle would have had to submit the claim to his own insurance company. Your insurance company would not pay anything on the claim – after all, it was not your fault, you were not legally responsible for the damage – thereby saving you thousands in renewal premium increases.

What is the best option to take? If you have repeat customers that represent a significant part of your business, than Direct Primary Coverage may be the best choice. However, if you do business with thousands of different people and have no significant relationship with them, then Legal Liability Coverage may better suit you.

To recap. Garagekeepers insurance refers to coverage for the cars left in your care, custody or control. Direct primary garagekeepers pays for the loss whether you are legally obligated to do so or not and legal liability garagekeepers only pays out if you are legally responsible for the loss. As a result, direct primary garagekeepers coverage is usually more expensive than legal liability garagekeepers coverage. Both of these options have their positives and negatives. Talk it over with your insurance agent and then make a decision on what you feel is the best for your business. Think long-term vs short term on the cost of the policy. Once you take cost out it will help you determine which is actually the best option.

Food trucks

How much insurance do owners of food trucks need?????

- Food Trucks are a booming industry. In 2015, the industry represented more than 1.2 billion in annual sales. This booming industry has contributed to an annual growth rate of more than 12% over the 5 previous years. Because of this popularity many more business owners entering the market. As they enter the market there are many risks that come to this industry. Many business owners in this industry got their start in the traditional restaurant industry. There are many more risks that come with a restaurant that is mobile and processing many transactions at a remote location. Those risks are much different from a traditional restaurant, a non-profit organization or even a home health care agency. For this reason, food truck owners need to have a strong relationship with an independent insurance agent who can help them properly protect their investment. Here are 5 coverages most food truck owners need to secure, in order to properly protect their business.

- General Liability
- Commercial Auto
- Inland Marine
- Cyber Insurance
- Workers Compensation

Food Trucks

General Liability

ich your business is classified and how much revenue you generate.

Commercial Auto

A Commercial Auto Policy will be essential to food trucks. This will cover the main body of the vehicle if it is damaged in an accident. It will also cover your liability to the other vehicle in the crash if the accident is the fault of you or your employee. A commercial auto insurance policy is not all encompassing. The equipment kept inside your vehicle or pulled behind a trailer is not covered by a commercial auto policy. These pieces of equipment will be covered by an inland marine insurance policy.

Inland Marine

An Inland Marine Insurance Policy is designed for specialized equipment that is meant to be in transit. The very nature of the food truck industry makes this coverage essential. One key to making sure all of your equipment is covered, is to have a detailed conversation with your independent insurance agent about what types of equipment you have and exactly how you use that equipment.

Cyber Insurance

Cyber Insurance is a necessary coverage far too many food truck owners do not realize they need. Even at a mobile workstation like a food truck, a majority of the purchases will be made with a card or mobile device. Depending upon what type of mobile Point of Sale software you use this can open up your business to becoming a victim of a data breach. If you secure the proper coverage it can help you recover from the damages your business faces as a result of a data breach. The coverage can help you make your customers whole again and it can help you restore the damaged image of your business as a result of a data breach.

Workers Compensation

Workers Compensation insurance is required by law in 48 out of 50 states. Each workers compensation system is regulated by the individual states and each states’ system has specific exclusions based on how many employees you have, the revenues of your business and certain industries. You may not be required to secure this coverage depending upon your specific state. Even if you are not required to secure this coverage it is more than likely beneficial to you to secure this coverage once you hire an employee not in your immediate family.

Find in-depth information about the best insurance for food trucks at MyInsuranceQuestion.com

Florist

How much insurance does a small Florist really need?

Here are 6 Insurance Policies every Floral Business should consider

How much and what types of insurance coverage a florist needs really depends on the size, type and scope of the business. If the florist only sells flowers at one location, it may not need all of the coverages discussed in this blog post. If the florist business designs flower arrangements or provides delivery service it opens up your business to an enormous amount of additional risk. Here are 6 insurance coverage’s all floral businesses should strongly consider securing.

General Liability

General Liability Insurance will protect your business from property damage and bodily injury claims of third parties. Third parties can be anyone not associated with your business that is harmed by the actions of your businesses operations. Included in this group of people can be customers, vendors delivering products to your facility or even a plumber who comes to work on your toilet.

Professional Liability

If you are designing floral arrangements for special occasions like weddings, funerals, Valentines Day or Christmas; you can be sued if the designs are not up to the expectations of the customer. The lawsuits do not have to be founded to cost your business immensely in legal fees and reputation management. A Professional Liability Insurance Policy will help your business withstand the costs to defend your self in court and for missed time at work spent defending you and your business.

Commercial Auto/Hired and Non-owned Auto

If your business uses vehicles as a part of normal business operations than you need to secure one or both of these coverages. If the business owns a vehicle and that is the only vehicle used for business purposes than a commercial auto policy should suffice your business, but if you have employees who use their own vehicle or rented vehciles for any part of their job than you need to secure the addition of hired and non-owned auto coverage.

Commercial Property

A commercial property insurance policy is needed if your business owns and operates any property as a part of your operations, no matter the size. It is different than a traditional home owners policy. Commercial property policies are sold on a replacement cost or on an actual value basis. It is usually best to purchase a replacement cost policy. This type of policy will cover the cost to tear down, haul off and replace the property that is damage. An actual value policy will pay you an agreed upon value of what the property is worth. In most cases this will not pay the entire amount to make your business whole again.

Inland Marine

If you own any specialized equipment or equipment that is designed to be in transport frequently, you have a need for Inland Marine Coverage. A commercial property will cover your facility. A commercial auto policy will cover your vehicles. If you have specialized equipment you use to design and maintain the arrangements or an attachment to your vehicle like a trailer it will not be covered by either of these policies. This is where an inland marine policy can be added to cover this specific equipment. Taking additional time with your agent to explain all the details of your business can make sure you secure all of the policies your business needs.

Workers Compensation

Workers Compensation Insurance is required by law for most businesses in 48 out of 50 states. The system is managed by the individual states, so it is important for you to check with the proper state governing agency to ensure you are compliant with your states laws and regulations. Even if there is an exclusion for your business to not carry the coverage, it is usually in your best interest to still secure workers comp coverage. This insurance policy will protect your business from being sued for most injuries that occur as a part of normal business operations. It also provides medical coverage and reimbursement of some lost wages for workers injured as a part of normal business operations.

Beauty Salons

How much insurance coverage do Beauty Salons need?

There are many Beauty Salons all across the country. Each one has their own unique set of risks depending upon the scope and scale of their operations. THe risks facing a beauty salon are very different from the risks of a real estate agency, a day care center or even an electrician. All of these industries have their own individual needs and that is why each need their own package of insurance protection. Here are four insurance coverages’ every Salon should have in order to properly protect their business. There may be more coverages that may be needed based on the actions of your employees. For this reason, it is extremely important to spend additional time speaking with your insurance agent about what exactly your employees do and do not do on a daily basis.

Beauty Salons

✓ General Liability
✓ Professional Liability
✓ Inland Marine
✓ Workers Compensation

General Liability

General Liability Coverage will protect most beauty salons from property damage and bodily injury claims to third party. Because of the high amount of traffic coming in and out of the business there is a likelihood to have more than average claims due to slips trips and falls. Keeping the premises clean and not cluttered can go a long way towards limiting these types of claims.

Professional Liability

Professional Liability Coverage is a coverage specifically designed for businesses that provide specialized advice or services. The need for this coverage will be higher the more high end your business is or if you work with customers around special occasions like weddings, birthdays, religious celebrations, proms, etc. This policy will cover most legal fees if your business is sued by a customer for not providing the proper service for their occasion. The lawsuit does not have to result in a judgment against your business to rack up an enormous cost. Even if you are innocent, you still have to hire a lawyer to defend yourself in court and you may have to take time away from your business to defend your reputation.

Inland Marine

Inland Marine Insurance Coverage will protect your property that is highly specialized or frequently in transit. Exposures to this equipment may come if employees provide their own tools. If they do, there may be an employees, tools and equipment exposure. If your stylist goes to the client’s premises to perform services, there may be goods off premises or in transit. There may be a bailees exposure with wigs or other hairpieces, or from storage of customers’ goods at all-day events offered by some high-end salons. If any or all of these exposures exist than your business needs to add this coverage.

Workers’ Compensation

Workers’ Compensation Insurance is required by law in 48 out of 50 states. Depending upon the rules and regulations of your state, you may or may not need to secure this coverage. How your business is structured and whether or not your employees are W-2 or 1099 employees can impact the requirement for this coverage as well. Workers Comp Coverage will cover your business for most lawsuits that occur from injured workers who were hurt because of a normal business activity. It will provide your employee with medical costs and some lost wages while they are hurt and not able to work.

I have an Injured Worker, now what do I do?

4 ways employers can improve health outcomes of an injured worker

Take care of your employee

When an injury occurs to one of your workers, taking care of the health and well-being of that worker should always be the first and foremost priority for everyone in your organization. This is simply the right thing to do. It will help your business show the injured worker that you do truly care about them and it will send a nonverbal message to your other workers that you care about them as well. Implementing a return to work program will help them quickly feel like they are still a part of the organization and valued. These little things can go a long way to turning a bad situation in to a positive for your organization.

Report the injury promptly

As you are taking care of the injured worker there should be some process in place for your managers to begin to document what exactly happened and when. One thing to remind managers to document is the time the accident happened, who was present, how the incident happened and what was being done about the injury. A decision on whether or not to call an ambulance needs to be quickly and decisively.

Stay in touch with your adjuster

In the days and weeks after an incident it is crucially important to keep both your agent and your carrier in the loop. Your agent will not be able to deal with the claim very well, that is the responsibility of the carrier. It is important to inform them, because if you have a problem with your carrier, they can speak with them on your behalf about how the claim is being processed. It is important to notify the carrier quickly because they know the ins and outs of the workers compensation system in your area. They can tell you which hospital or doctors office is best set up to handle a workers compensation claims. For the hospital, processing a workers compensation claim is not a simple as just going to the doctor. If you go to the correct system it can speed up the timing and the quality of care your injured employee gets.

Rely on us for medical bill mediation

If you are having problems with a claim getting paid, do not pay the bill yourself. The carrier has a separate relationship with hospitals and they can negotiate prices to help your business and the workers compensation system as a whole. Not all hospitals know the workers compensation system well. They may bill the business instead of the insurance carrier and not realize how the process operates. This should not be the case, but unfortunately in some cases it does occur. Any bill that you get should be turned over to your carrier and it is a good idea to make a copy and keep your agent in the loop.

5 Tips for Small Business that have an Injured Worker.

Electrical Contractors

Insurance needs and concerns for Electrical Contractors

Electrical contractors carry unique risks that many other businesses in the construction industry do not face. With those risks come additional types of insurance needs. Each electrician is unique in the scope and capacity in which they operate their business. Depending upon the type of work each electrician partakes’ in, there may be a number of types of coverage an electrician needs to secure in order to properly secure their business. Here is a list of 5 commonly carried coverages most electricians secure.

General Liability
Commercial Property
Commercial Auto
Inland Marine (Tools and Equipment)
Workers Compensation

General Liability

Exposures at the contractor’s office are generally limited because of the lack of access to the premises. Storing materials outdoors may create vandalism and attractive nuisance hazards. Electrical voltage is always a risk for electricians. This is due to the risk of electrical burns or electrocution to employees or other third parties. An electricians’ employees can cause damage to the client’s property and can cause bodily injury to members of the household, the public, or employees of other contractors. These are risks that are covered by a general liability policy.

Commercial Property

If you own a property; no matter how small, your business needs to secure commercial property coverage. Property exposures at the contractor’s premises typically are fairly low for electricians. This is generally limited to those of an office and storage for supplies, tools, and vehicles.

Commercial Auto

Automobile liability exposure is higher for electrician than other brick and mortar businesses. Most electrical contractors are in transit to transport workers, equipment and electrical supplies to and from job sites. A driving hazard is a huge risk for insurance companies to insure. The more time your business spends driving the higher the likelihood of claims. Those claims tend to rise in both frequency and severity. Implementing a safe driving program and keeping up to date driving records for all employees can help limit what you pay in premium. Age, training, experience, and drivers’ records, as well as the age, condition, and maintenance of the vehicles, are all important items to consider.

Inland Marine

Inland marine is also commonly called ‘Floaters’ coverage. It is meant for specialized equipment that is frequently in transit as a part of business operations. The exposures often include owned or rented equipment, building materials, as well as materials being transported to and from the job site. This is commonly needed for businesses that transport their equipment to a third party site for use delivering a service. The most basic example of an industry that needs this coverage is a landscaping company. It can also include any business that takes equipment away from the premises for use as a part of normal business operations.

Workers’ Compensation

Workers compensation insurance is required by law in 48 out of 50 states. Each state has their own specific exclusions depending upon the number of employees and the scope of your work. It is important to check with the proper governing agency in your state to determine if you are required to purchase this coverage. Even if you are not required to purchase this coverage in many cases it is still beneficial to your business to secure it. The coverage provides you with protection from lawsuits that may result from injured employees who are injured as a result of normal business practices. Employees give up the ability to sue for normal injuries, but get back coverage for their medical expenses and some portion of their wages while they are hurt and not able to work. Typically they are reimbursed 60 percent of their normal wages for the time they are not able to work.

Real Estate Insurance Needs

5 Types of insurance every Real Estate Agency should have.

Real Estate Agencies take on a unique set of risks compared to other traditional businesses. Many businesses, like a restaurant for example, have a brick and mortar location where a majority or all of the business takes place. Real Estate Agencies, while most do have a physical address, have a majority of their work taking place at a third party location. These locations frequently are at the property they are helping to sell. For this reason, real estates agencies have to secure a unique group of coverages in order to adequately protect their business. Here are 5 recommended coverages most real estate agencies should secure.

General Liability Coverage
Errors and Omissions (Professional Liability)
Property Insurance
Hired and Non-Owned Auto
Workers’ Compensation Insurance

General Liability Insurance

For most real estate agencies, the risks related to general liability coverage are often minimal. This is primarily due to not much business occurring at the physical location. A majority of their work is done over the phone, by electronic mail or at a third party location. Off-Premises risks can be extensive for this industry. That is true whether you are dealing with the selling of properties or rental properties. These risks typically arise from sales visits, inspections, open-houses and similar work done at the customers’ home or other buildings. In some cases, there is an agent representing both the buyer and the seller. Any damage that occurs during joint operations, like an open-house, can cause a dispute between all parties involved. Monitoring of keys is another risk that must be dealt with carefully. Documenting every time, you access a facility is highly recommended to limit the risk you face regarding access to the facility.

Errors and Omissions Coverage (Professional Liability)

Exposure associated with errors and omissions (E&O) may be the most significant risk a real estate agency faces. This is because a majority of the work you do is highly specialized and you are giving advice. If you give the wrong advice, it can cause the business to be liable to the client in the future. To limit these risks the agency can make sure all employees have the proper credentials, experience and has the proper ratio of professional employees to clerical employees. Thorough background checks are essential to limit E&O Claims.

Commercial Property Insurance

If your agency owns physical property, you need to secure Commercial Property Insurance. There are two ways these policies are sold. They are sold on a replacement base or on an agreed upon value of the property. In most cases, it is better to secure a policy at replacement level. This will include the cost to tear down the facility, remove all debris and build a new facility. If your policy is an agreed upon value it typically does not include these additional costs.

Commercial Auto/Hired and Non-Owned Auto Coverage

If you own vehicles for your employees to use when they are away from the office than you need to secure a Commercial Auto Policy. Most real estate agencies do not own vehicles specifically for company use, but they do have agents who use their personal cars for business purposes. When these employees are using their personal vehicles for business purposes the business is liable for any accidents that may occur. The business is not liable for the damage to the employee’s car. This is covered by the employee’s personal auto insurance policy. The business is liable for damage to the car and any bodily injuries that may occur to third parties. A Hired and Non-Owned Auto Insurance Policy will take care of most liability a business faces resulting from accidents that occur when employees drive their personal cars or rented vehicles for business purposes.

Workers’ Compensation Coverage

Workers’ Compensation Insurance is required by law in 48 out of 50 states. Each state has their own rules and regulations regarding the administration of this system. Each state has their own exceptions for some small or family owned businesses. Workers Comp is similar to general liability, except that it covers employees and not third parties. When an employee is hurt on the job, work comp coverage will cover some of their lost wages (typically 60%) and medical costs incurred as a result of the injury.