by David and Tracy Bell | Jan 7, 2024
Audits are common with general liability, workers’ compensation, liquor liability, commercial and other business insurance policies.
This is because when your commercial insurance policy is drafted, it’s based on an estimated risk exposure based on sales volume, number of employees and contractors, locations and common industrial risks.
In most cases, the premium for your insurance isn’t a final number and fluctuates based on year-end actual numbers. The audit is an important process that determines the final premium.
Most cringe at the thought of an audit, but did you know there are several ways that an audit benefits you and your business? Let’s take a look at why you can look forward to your audit.
Changed mindset
Audits aren’t always spurred by something negative. They don’t have to mean that a business has done anything wrong or that the IRS is asking to dig through your finances. In fact, this is a positive thing in the insurance world! A general liability insurance audit is completed to thoroughly examine your business’s payroll and risk exposure and to check for any changes over the year in how much risk was actually incurred. An audit may also be required for your workers’ compensation and commercial property insurance coverage.
Ensures proper coverage
During the first policy term or at the end of the coverage period, the insurer will request an audit to adjust your premium based on the most accurate sales numbers and earnings. With how much a business can change year to year, this helps to ensure that you have the right amount of coverage as you grow and change. It can also spot gaps in coverage or new exposures that appeared during the year that weren’t seen before, helping to make sure you are covered should the unexpected arise.
It can save you money
The initial insurance premium estimate can be off; remember, the purpose of insurance premium audits is to use your actual sales and operating data to determine the true picture of risk. The audit can save you money, as your premiums can decrease if sales volumes, staffing or other adjustments to predicted exposure change and less coverage is needed. You may also be entitled to a refund or a credit on the overquoted premium at the start of the year.
Best practices already involve accurate record keeping in your operations; this is exactly what will help your insurance audit go smoothly and painlessly. Documentation you’ll need to provide includes payroll and cash summaries, federal and state employment reports, subcontractor and 1099 forms, relevant tax documents and any other items that will help an auditor have a clear understanding of your business state and revenues.
We can walk you through the process and answer any questions you may have. Call or email us today, and let’s discuss your premium basis and risk exposure and what that could mean for an upcoming audit. Let’s help you prepare so that your audit can feel more like a walk in the park.
by Syndicated Insurance Resources | Jan 15, 2023
Audits are common with general liability, workers’ compensation, liquor liability, commercial and other business insurance policies.
This is because when your commercial insurance policy is drafted, it’s based on an estimated risk exposure based on sales volume, number of employees and contractors, locations and common industrial risks.
In most cases, the premium for your insurance isn’t a final number and fluctuates based on year-end actual numbers. The audit is an important process that determines the final premium.
Most cringe at the thought of an audit, but did you know there are several ways that an audit benefits you and your business? Let’s take a look at why you can look forward to your audit.
Changed mindset
Audits aren’t always spurred by something negative. They don’t have to mean that a business has done anything wrong or that the IRS is asking to dig through your finances. In fact, this is a positive thing in the insurance world! A general liability insurance audit is completed to thoroughly examine your business’s payroll and risk exposure and to check for any changes over the year in how much risk was actually incurred. An audit may also be required for your workers’ compensation and commercial property insurance coverage.
Ensures proper coverage
During the first policy term or at the end of the coverage period, the insurer will request an audit to adjust your premium based on the most accurate sales numbers and earnings. With how much a business can change year to year, this helps to ensure that you have the right amount of coverage as you grow and change. It can also spot gaps in coverage or new exposures that appeared during the year that weren’t seen before, helping to make sure you are covered should the unexpected arise.
It can save you money
The initial insurance premium estimate can be off; remember, the purpose of insurance premium audits is to use your actual sales and operating data to determine the true picture of risk. The audit can save you money, as your premiums can decrease if sales volumes, staffing or other adjustments to predicted exposure change and less coverage is needed. You may also be entitled to a refund or a credit on the overquoted premium at the start of the year.
Best practices already involve accurate record keeping in your operations; this is exactly what will help your insurance audit go smoothly and painlessly. Documentation you’ll need to provide includes payroll and cash summaries, federal and state employment reports, subcontractor and 1099 forms, relevant tax documents and any other items that will help an auditor have a clear understanding of your business state and revenues.
We can walk you through the process and answer any questions you may have. Call or email us today, and let’s discuss your premium basis and risk exposure and what that could mean for an upcoming audit. Let’s help you prepare so that your audit can feel more like a walk in the park.
by David and Tracy Bell | May 16, 2022
A business owner’s policy (BOP) combines two types of insurance (property and general liability) into one policy, helping you efficiently manage claims resulting from disasters, theft, fires, bodily injury and more.
Who needs a BOP?
A BOP can help your business if you have a physical location, regardless of the type (a home, a rented or owned office, a storefront or even a garage), because those locations are subject to damage.
A BOP can also help your business if you have assets that could get stolen or damaged. These can include physical assets, such as equipment, furniture and inventory. But they can also include digital assets. If someone steals or loses customer data, for example, a BOP can help pay expenses involved in notifying clients.
You could also benefit from a BOP if there is any chance that you could be sued. Say a customer slips and falls in your retail storefront or office. Without the proper coverage, you could face significant medical expenses.
Why consider a BOP?
A BOP is more affordable than buying separate business property and liability policies. You can also tailor a BOP to help meet your business’s specialized needs by adding optional coverages, such as data breaches and business income loss. A BOP policy can also be customized to certain industries.
How can you get a BOP?
Proper insurance coverage is an important part of being prepared. Call or email us today to review your policies and determine if a BOP is a good fit for you.
by David and Tracy Bell | Feb 21, 2022
Insurance is the backbone of every established business’s operation plan, offering reassurance of financial stability should the worst-case scenario come to fruition. But understanding the elements of an insurance contract can seem daunting when it applies to a business versus a person. Below is a brief guide to the components of an insurance contract that make it legally binding for both parties.
Offer and Acceptance. When you seek an insurance policy, you fill out an application that is legally known as an offer. Acceptance occurs when the insurance company formally issues the policy.
Legal Consideration. This refers to the dollar value of the premiums you agree to pay and the dollar limit of the coverage the insurance company provides in return.
Competent Parties. Insurance contracts are only valid if both parties are of sound mind and body, both parties are at least the legal age of majority and the insurance company is licensed in your state.
Free Consent. Both parties in any insurance contract must enter into the contract of their own volition, with no fraud, misrepresentation, intimidation or coercion involved.
Legal Purpose. The insurance contract must adhere to all state-specific laws that apply to the contract and cover only legal activities.
Insurable Interest. You have an insurable interest when you benefit financially from whatever is being insured (and you cannot get coverage for something in which you have no insurable interest).
Utmost Good Faith. This means that both parties have acted without any type of deception, omission or misrepresentation.
Material Facts. Material facts are those things the insurance company needs to know in order to insure your business.
Full and True Disclosure. Both parties are required to completely disclose all material facts pertinent to the insurance policy.
Principle of Indemnity. The insurance company will compensate you with a cash settlement if a covered loss occurs.
Doctrine of Subrogation. This says that the insurance company can pursue reimbursement from a third party that caused the covered insurance loss.
Warranties. Warranties are the promises specified in an insurance contract, such as conditions that can trigger a claim and the actions that will be taken by the insurance company as a result of the claim.
Conditions. Conditions determine whether a claim will be paid. They include you paying the policy premiums, notifying the insurance company in a timely manner and such.
Limitations. Limitations are the parameters of the insurance coverage, such as maximum amounts that will be paid for a specific type of loss.
As you might have gathered, insurance contracts are complex legal documents, and it’s best to have assistance when entering into one. Please call or email us today to get help with your commercial insurance coverage.
by David and Tracy Bell | Feb 7, 2022
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| Employment practices liability insurance (EPLI) plays an important role in all types of businesses: serving as a financial safeguard against unexpected workplace exposures. Do you have this critical kind of insurance and in the right amount?
Like virtually all employers, you likely want to do the right thing by your employees: keep them safe, happy and fairly compensated. But however hard you try, employment practices claims can arise, and they can be lodged against a business, its officers, owners, employees and/or managers.
What kinds of claims? Well, under federal law as well as some state and local laws, claims may be made regarding harassment (sexual or otherwise), wrongful termination, hostile work environment, or age, sexual or gender discrimination. But that’s not an exhaustive list.
Sometimes these claims are merited; sometimes they are not. Regardless, defending against them can be a costly proposition, with legal fees alone running tens of thousands of dollars. Then there are any awards to consider if you lose or feel forced to settle.
That’s where ELPI can be critical. After your deductible is met, ELPI covers the cost of your legal defense, along with the costs of judgments and settlements, up to your coverage limit. EPLI typically offers $1 million to $25 million in coverage (but not for criminal conduct; this is civil).
The best way to mitigate employment practices risks is to have solid insurance coverage. Give us a call today to see how we can support you in finding the best policy! |
by David and Tracy Bell | Dec 7, 2021
With the new year around the corner, you’ll be reviewing how your business did this past year and reflecting on your goals and what you want to achieve in life and in business.
Here are three inspiring examples of those who managed to make it from humble beginnings and what we can all learn from them.
Jan Koum
Koum was born into poverty in a tiny village in Ukraine. After migrating to America with his family as a teenager, Koum became fascinated with computers and eventually began working for Yahoo!
In 2009, he had the foresight to predict the future success of the embryonic mobile app industry, so he founded WhatsApp. By 2014, he’d sold it to Facebook for $19 billion. Koum’s story shows that intelligent forward planning can be the key to reaching your goals.
John Paul DeJoria
DeJoria began his working life moving from low-paid job to low-paid job, from shifts as a janitor to delivering newspapers. Befriending Paul Mitchell while working in hair care, the pair took out a small loan of $700 and founded John Paul Mitchell Systems, today a global conglomerate.
Since then, he has helped to found Patron Sports and is worth over $3.1 billion, proving that strong drive and good friendships can take you farther than you think.
Kevin Plank Plank was on the edge of going broke when he decided to put his life savings together with a $40,000 advance on a credit card to fund a company selling clothing under his brand, Under Armor.
After making a $17,000 sale to Georgia Tech University, sales to 24 NFL teams followed, and in a few short years, it turned into a multimillion dollar company. Today the company is worth billions. Plank’s journey shows the power of investing in yourself!
