You’re standing at the counter of a rental car agency in a strange city. The agent asks if you want to purchase insurance. Suddenly you’re at a crucial decision point. If you agree, you pay a little more (or even a lot more) for your rental. If you refuse, you’ll be required to check some scary boxes and initial some lines and drive away wondering what will happen if you get in an accident.
“Should I buy insurance coverage when I rent a car?”
This is a common question we receive from our clients. The answer is “It depends.”
- First, it depends on what type and amount of insurance you have on your personal vehicle(s).
- Second, it depends on the vehicle you own and drive.
- Third, it depends on whether you are willing to make claims on your personal insurance, paying deductibles and accepting possible rate increases if you have an accident in a rental car.
The Easy Answers
Here are three situations where we recommend you purchase additional insurance at the auto rental counter:
- If you don’t own a personal vehicle and don’t have personal auto insurance, you should buy coverage when you rent a car.
- If you don’t have collision coverage on your personal vehicle and you don’t want to buy Enterprise or Avis a brand-new car, you should purchase the add-on insurance coverage.
- If you’re renting an exotic vehicle (such as a Ferrari, Lamborghini, or Bentley), the rental company will probably require you to buy special insurance coverage.
Apart from these specific situations, the answer is still “It depends.”
Types of Risks, Types of Coverage
There are four types of insurance typically offered when you rent a vehicle:
- Collision Damage Waiver (CDW)
- Supplemental Liability Protection (SLP)
- Personal Accident Insurance (PAI)
- Personal Effects Coverage (PEC)
Let’s consider each of these and see how they relate to the coverage most people carry on their personal vehicles.
Collision Damage Waiver (CDW)
This insurance covers the cost to repair or replace the rental car if it is damaged or stolen. The vehicle must have been driven by an authorized driver named on the rental agreement, and the damage can’t be the result of recklessness or negligence.
Without this coverage, any damages will be your responsibility—or the responsibility of your insurance company, based on your personal auto policy. Coverage for rental cars is subject to the same limits in your personal policy. That means if you have a collision in a rental car worth $20,000, and your personal policy insures a vehicle worth $10,000, you’ll have to pay the difference out of your own pocket. In addition, any claims are subject to your deductible, so if you cause $400 worth of damage and your deductible is $500, you’ll be paying for those repairs yourself.
Supplemental Liability Protection (SLP)
Every state has a minimum level of liability protection every vehicle owner must carry, and rental companies are no exception to this requirement. The state minimums don’t provide enough protection for anything more than a minor fender bender. Supplemental liability protection (SLP) generally provides $1 million in additional coverage to help fill the gap between the rental agency coverage and the actual damage caused in an accident.
If your personal auto policy is a “state minimum” policy, opting for the SLP is probably in your best interest. Even if your liability coverage is higher—say, $100,000 per person and $300,000 per incident—you could find yourself paying out of pocket if you are involved in a serious accident.
Personal Accident Insurance (PAI)
If you or your passengers are injured in an accident in a rental car, personal accident insurance will pay medical and ambulance costs related to the accident. The policy may also include a death benefit for both driver and passengers if the worst should happen.
Without this insurance, the cost of medical care related to an accident would be your responsibility (in cases where you are held responsible for the accident) or the responsibility of the other driver if they are at fault. If you have no medical coverage at all, or if you have a “high deductible” plan, you should consider opting for this low-cost coverage.
Personal Effects Coverage (PEC)
This add-on coverage helps replace your personal property if it is stolen from the rental car. The limits are generally $500 per person with a maximum benefit of $1,500.
As with most types of insurance, prevention can help you avoid problems. Don’t leave valuables in a rental car. If you purchase this policy, remember only $500/$1,500 of your stuff is covered. Items stolen from any vehicle are covered by your homeowners or renters policy, though any claims would be subject to your deductible.
What Happens If You Are in an Accident?
A good way to make the decision about rental car insurance is to consider what would happen if you were in an accident in the rental car with or without the coverage.
Scenario #1: You back into a light post, causing $500 worth of damage to a rental car’s bumper.
If you purchased the collision damage waiver, the rental agency would repair the vehicle at its own cost. If you didn’t purchase the collision damage waiver, you’ll be responsible for paying the repairs out of pocket. You are also likely to be charged for “loss of use,” which is the lost rental income while the vehicle is being repaired.
Scenario #2: You cause a significant accident, causing $5,000 in damage to the rental car, $5,000 to another driver’s vehicle, and injuries that require $15,000 in medical care.
If you purchased the collision damage waiver and supplemental liability protection, the rental car company will pay for repairs to both vehicles and cover the cost of the other party’s medical expenses. If you purchased personal accident insurance, the rental car company will also pay your medical bills.
If you did not purchase the rental insurance, your personal insurance collision policy will cover damage to the rental car and your liability coverage will pay for the damage to the other vehicle and the other party’s medical bills. You will be responsible for paying the deductible for the claim, and for covering your own medical costs. The rental car company will likely charge you for “loss of use,” which most personal policies don’t cover. Your insurance premiums will likely go up because of the accident.
Credit Card Coverage
While many credit cards don’t provide any rental car coverage, some cards do provide a type of collision damage waiver protection for rentals. However, these cards do not provide any additional liability coverage, so damage to other vehicles and medical expenses would still have to be covered through a personal auto policy or rental agency liability coverage.
If you’re not sure whether your card provides rental car coverage, you can find out by reviewing the “card benefits” section of your card issuer’s website. Some cards limit coverage for vehicles rented less than 15 or 30 days, so pay particular attention to the terms before you rely on your credit card company for protection.
Making Your Decision
So … you’re standing at the counter of a rental car agency in a strange city. The agent asks if you want to purchase insurance. Should you buy insurance when you rent a car?
Consider the following factors:
- What kind of vehicle are you renting? How does the value of the rental car compare to the value of your personal vehicle(s)?
- How much liability coverage do you have with your personal auto policy? Do you have collision and comprehensive coverage? If so, what are the limits and deductibles? Do you have an umbrella policy?
- How willing/able are you to pay to repair or replace a late-model rental car? Are you willing to pay for “loss of use” for a damaged rental vehicle?
- How will a claim against your personal insurance affect your rates?
If you’re still not sure, it’s time to sit down with your insurance agent to review your auto policy. Together, you and your agent can determine whether you have the right kind of coverage in the right amounts. That way, you’ll know everything you need to know to make the right decision when you’re at the rental counter.
You were headed to your doctor’s office with little on your mind. Your last physical was a year ago, and during that visit your doctor expressed how pleased she was with your overall health. She encouraged you to maintain your current exercise regimen and continue to make good food choices. You expected a similar response during this year’s physical.
The visit took a turn for the worse, however. When checking in for your appointment, you were informed the entire cost of tests and today’s consultation with the doctor would be out-of-pocket. You ask for more information and you find out you’ve reached the insurance payout limit for the year for preventative health services. This doesn’t make sense; you haven’t been to the doctor since your last physical a year ago. You are certain there is a mistake.
Have You Been a Victim of Identity Theft?
Suddenly you recall a conversation that occurred with your insurance agent.
Last week while reviewing your home insurance policy, your insurance agent explained that identity theft coverage was included in your policy. It was nice to hear at that time, but it was really just a side note for you. You doubted you would ever use it.
Now here you are, seriously considering the possibility that your identity has been stolen. You Google a few things on your phone and learn:
- Of the 3.2 million identity theft and fraud reports received in 2019, 20% were identity theft complaints, which was up 46% from 2018.
- Out-of-pocket fraud costs for identity theft victims more than doubled from 2016 to 2018 to $1.7 billion.
- Restoring your good name takes an average of six months and 200 hours of work.
- Your personal medical information may also be sold on the black market, where it can be used to create entirely new medical identities based on your data.
- About 20 percent of victims indicated the wrong diagnosis or treatment was received or that care was delayed because there was confusion about what was true in their records due to the identity theft.
You need help, fast. You contact your insurance agent who immediately helps you file a claim. Your independent agent consistently strives for excellence and, when you were shopping for insurance, he insisted you receive the best value for your insurance dollars. Sure, there were a couple of less expensive options but the coverage wasn’t as thorough. Your final selection included a policy which provided a resolution specialist in the case of an identity theft claim. Your credit resolution specialist’s name is Jamal and he knows this business. With Jamal’s help and guidance, you begin the process of restoring your good name.
10 Warning Signs Your Identity Has Been Stolen
If your identity has been stolen, the sooner you find out the sooner you can start mitigating damages. According to the Federal Trade Commission, here are 10 warning signs your identity has been stolen:
- Unexplainable withdrawals from your bank account.
- You are no longer receiving bills and other mail that you normally receive.
- Debt collectors call you about debts that aren’t yours.
- You find unfamiliar accounts or charges on your credit report.
- Merchants refuse your checks.
- Medical providers bill you for services you didn’t use.
- Your health plan rejects your legitimate medical claim because the records show you’ve reached your benefits limit.
- A health plan won’t cover you because your medical records show a condition you don’t have.
- The IRS notifies you that more than one tax return was filed in your name or that you have income from an employer you don’t work for.
- You get notice that your information was compromised by a data breach at a company where you do business or have an account.
If Your Identity is Stolen
If your identity has been stolen, you must act quickly and assertively to minimize the damage. If you have identity theft insurance, contact your insurance agency immediately if you suspect your identity has been compromised. For information on the identity recovery process, visit https://identitytheft.gov/Info-Lost-or-Stolen.
The Federal Trade Commission has a printable guide with basic information on identity theft. Click here to download the guide.
Identity Theft Insurance
Many insurance companies offer identity theft insurance. The coverage options vary depending on the policy and insurance company. Talk with your insurance agent to find out what options are available so you can choose the policy that is right for you. Some benefits this coverage may provide include the following:
- Coverage for expenses incurred to recover your identity, including phone bills, lost wages, notary and certified mail costs, and (sometimes with prior consent of your insurance company) attorney fees.
- Restoration and resolution services to assist you in the process of restoring your identity and repairing your credit report.
- Little to no adverse impact on premium. Some identity theft policies are written to ensure your premium will not increase if you have a claim. Talk with your agent to see if this option is available on your policy.
Identity theft insurance is more affordable than you may think, and it is simple to add to your current insurance policy. Your independent insurance agent can help you find a company who offers this coverage. Contact your Leavitt Group insurance advisor to learn more.
Article Courtesy of CRC Insurance Services, Inc.
Our increasing dependence on the internet, email, and online databases may make us more efficient, but it also puts us at increased risk of sensitive materials falling into the wrong hands. Technology is changing daily and the ways in which information is collected, distributed, and even hacked, can change in an instant.
Protecting Your Business from a Cyber Breach
Cyber liability insurance (more accurately called information security and privacy liability insurance) is rated based on the amount of information at risk – number and size of records, nature of records, type of business or service provided, and revenue. Coverage differs from carrier to carrier, but these policies typically address both prevention (“pre-event”) and reaction (“post-event”) to data security breaches, and they often include valuable loss control and risk management services.
The value of digital data is often overlooked – until it is compromised. To better understand informational and digital assets, think of them as you would physical assets in any other risk management scenario. Having a full grasp and inventory of information collected, stored, or managed is the key to being prepared for any breach event.
5 Key Questions to Assess Cyber Exposure
Below are some of the key pieces of information to discuss with your insurance agent. This will help your agent determine the type of coverage that’s really needed.
- What proprietary information do you collect, manage, or store?
- What confidential personal information do you collect, manage, or store from your clients and your employees? Examples would include:
- Protected card information (credit card information, online commerce, etc.)
- Personal healthcare information (health records, social security numbers, etc.)
- Personal information (name, address, age, driver’s license numbers, income, insurance, etc.)
- What confidential business information do you collect, manage, or store from your clients? (credit card information, banking information, address, revenues, other information subject to confidentiality agreements, etc.)
- In what ways do you collect, store, or manage information? (i.e. paper files, electronic database or server, etc.) How is this information protected? (i.e. locked up, encrypted, etc.)
- Do you employ third parties or outside vendors to handle proprietary information? (i.e. document disposal, digital backup, etc.) Do you outsource any information technology?
Responding to a Cyber Crisis
Did a privacy breach occur? Was it a single event or ongoing? How many records were exposed? Now what? In which states do you have to notify individuals of the breach? What should those notifications say? Should you issue a press release?
Technology is complicated, and responding to a breach event is no different. Loss control and risk management services provided by your insurance company are invaluable in helping you find the best experts (forensic, legal, public relations, etc.) to navigate these difficult issues. Reacting too quickly can cost more than necessary. So simply knowing who to call when a breach occurs can often help mitigate a crisis tremendously and provide peace of mind.
5 Key Questions to Assess Cyber Preparedness
To determine how prepared you are in the event of a cyber crisis, ask yourself the following questions.
- Who is responsible for information security with your organization? Does this individual oversee or select information-related third party vendors?
- Do you have a formal information security policy in place? If so, are all employees trained on it?
- What loss control initiatives are in place for information security?
- Much like a formal disaster preparedness plan,
- Do you have a formal procedure in place for a data breach incident?
- What is your formal process in notifying clients/customers of a potential breach?
- Are you aware of the state statutes regarding notification and regulatory compliance in a breach event?
- Are there funds set aside for these notification expenses, identity theft/credit monitoring services, and any public relations or advertising campaign to combat a bruised public image?
- What is your protocol for lost electronics, such as cellphones or laptops? How would you address the loss of digital assets on such property?
Cyber liability insurance is still new territory and tends to be approached with hesitancy or even a bit of skepticism. The exposure is real, and it affects both large and small companies. Savvy companies are doing everything they can to protect their information assets, especially from a technology perspective. Our goal is to help you get the right information by asking the right questions.
FAQs During the COVID Era—Fluctuating Employee Size Effects on COBRA, Medicare, and More—Common Questions from HR & Benefits Folks
“What should I do?”
That is the most common question – “What should I do?”
There are a lot of changes during the COVID-19 era due to the fluctuations in employee numbers and the multitude of mid-year plan changes. This Frequently Asked Question (FAQ) guide will answer some of the most common questions from human resources and employee benefits departments.
No Surprises Act—What is in it? The Outlaw of Out-of-Network Emergency Bills
A surprise addition to the Emergency COVID Relief Act of 2020, the No Surprises Act (“Act”) was added to the COVID relief bill at the 11th hour. This Act brings home, however short it falls, the intent of ending surprise medical billing, as well as adding transparency provisions.
While you are enjoying the beauty of autumn, don’t forget to set aside time to winterize your home. Properly preparing your home for winter can help minimize insurance claims that are common during colder months – saving you time and money in the long run. Not sure where to begin? Here are a few ideas to get you started.
Winterize the Outside
One of the first lines of defense against cold temperatures and winter storms is a strong home exterior. While the weather is still nice, winterize your yard and the outside of your home by doing the following:
- Survey your landscaping. Trim trees with overhanging limbs that could block your walkways or endanger your home or vehicles during heavy snowfall and ice storms.
- Check your driveway, sidewalks, porch, deck, steps, and handrails to make sure they are in good repair.
- Examine your roof closely. Remove moss, clear debris, and make any necessary repairs.
- Remove debris from gutters so heavy winter rains and melting snow can flow freely and not damage your roof or walls. Consider installing gutter guards to keep gutters clear from additional debris.
- Inspect and clean the openings of attic vents, exhaust ducts, and the dryer vent.
- Seal cracks and gaps around windows and doors. Seal around windows and walls where air-conditioning units are installed.
- Make sure your snow blower and other snow removal equipment are in working order. Having cleared walkways will help ensure no one is seriously injured on your property.
Keep Things Cozy on the Inside
When the weather outside is less than enjoyable, your home can be a cozy retreat. After you winterize the exterior of your home, here are some items to inspect on the inside:
- Replace batteries in smoke and carbon monoxide alarms once or twice per year. Test the alarms to ensure they are working properly once a month.
- Inspect your fire extinguishers to ensure they are ready for use. For safety tips, visit https://www.nfpa.org/Public-Education/Staying-safe/Safety-equipment/Fire-extinguishers.
- Before turning on your heating system, replace the filter and have the system professionally serviced. Replace the filter regularly throughout the season.
- If you use a fireplace or wood-burning stove, have the chimney or flue inspected each year.
- Check the insulation in attics, basements, and crawl spaces. Improper insulation can cause a variety of problems ranging from bursting pipes to snow melting too fast to be carried away efficiently.
- Keep things warm. Use caulk and weather stripping to seal up drafty areas around doors and windows.
- Maintain an interior temperature of at least 55 degrees Fahrenheit, even when you are not at home. The temperature inside walls can be a lot colder than the air in the rooms, putting pipes at risk of freezing. Seal any drafts and leave interior doors open to help keep an even temperature from room to room.
- Check your emergency supplies. Ensure you have adequate food and water, along with a battery-powered radio. You’ll want a week’s worth of supplies, or more if you live in a remote area.
- Avoid deadly carbon monoxide. Do not use your oven or stovetop to heat your home, and never use gas-powered generators or barbecue grills indoors.
Don’t Let the Cold Get to Your Pipes
It’s hard to think of a worse start to a winter day than waking up to frozen pipes. Here are some tips to help you prevent what could easily become a very messy and expensive situation:
- Before cold weather arrives, drain sprinkler and swimming pool supply lines. Detach, drain, and store outdoor hoses. If possible, close inside valves supplying outdoor hose bibs, and open the outside hose bibs for draining. Keep them open so any remaining water can expand without breaking the pipe. If you can’t shut off the water from the inside, pick up some foam faucet covers.
- If you have pipes located along exterior walls or in unfinished or unheated spaces – such as a garage, attic, basement, or crawlspace – wrap the pipes with heating tape or cover them with insulation wraps or foam.
- During severe cold spells, you may want to leave all faucets, both hot and cold, running at a slight trickle. Leave the cabinet doors open in the kitchen and bathroom so your pipes aren’t shut off from the warm air.
- If you end up with a frozen pipe, quickly shut off your main water supply, and call a licensed plumber to address the situation.
What other steps do you take to winterize your home? Share your ideas in the comment box below. If you own a cabin or vacation home, remember these tips are equally as important for unoccupied dwellings.
Cyber attacks are continually on the rise, and 98% of cyber attacks rely on social engineering. This risk is not unique to large businesses – 43% of data breach victims are small businesses.
What is Social Engineering?
Social engineering is the “use of deception to manipulate individuals into divulging confidential or personal information that may be used for fraudulent purposes.” A hacker who is attempting social engineering might use email, postal mail, phone, or direct contact to gain illegal access to your computer system, convince you to give away sensitive information, or gain access to crucial company data. Social engineering is particularly dangerous because it takes advantage of human error rather than weaknesses in software and operating systems.
Social engineering is the art of manipulating people so they give up confidential information — these tactics are popular among cyber criminals because it is easier to exploit a person’s natural inclination to trust than it is to discover ways to hack your software.
Examples of social engineering include the following:
- Phishing: emails, phone calls, or text messages from someone posing as a legitimate organization with the goal of convincing individuals to provide sensitive information.
- Pretexting: this is a scam where the perpetrator will create a fabricated scenario to build trust in order to convince their victim to willingly hand over sensitive information.
- Baiting: this is similar to phishing, but the baiter will offer an item or good to entice the victim to provide certain information.
- Quid Pro Quo: these attacks promise a benefit in exchange for information. The difference between this and baiting is that baiting promises something in the form of a good, whereas quid pro quo promises a service.
- Tailgating: this type of risk is different from other types of social engineering as it involves the perpetrator physically entering your business. It is one of the most common and innocent-appearing security breaches. Tailgating occurs when someone who lacks proper authority follows an employee into a restricted area of the company.
Wire Fraud Through Social Engineering
Wire fraud is one of the crimes that is committed through social engineering. This can occur when a criminal deceives employees to wire money to pay phony vendors. This is not your typical “foreign prince” type of email that screams fraud. These types of sophisticated events occur when a criminal gains access to an email account belonging to someone in the business who has access to company finances. The criminal will silently monitor emails, waiting for an opportunity when financials are being discussed.
The following real-life scenario illustrates how easily this crime can occur:
A 20-employee manufacturing facility in a small rural town was nearly the victim of a social engineering scheme. This company has vendors and clients internationally and uses a third-party foreign exchange service for large transactions. A hacker was able to infiltrate the email of the manufacturer’s chief of sales and discovered this relationship with the foreign exchange service.
Acting as the chief of sales, the hacker started a conversation with the account manager of the exchange service and attempted to initiate a transfer to a “new vendor” (presumably himself and his associates). Following their established protocol, the account manager at the exchange service mentioned that he would call later that day for voice verification. The perpetrator then gave the account manager a “new mobile number” because he was “on the road.” The account manager called that number, talked with the perpetrator posing as the chief of sales, and verified the transaction.
Luckily for the manufacturer, the account manager still felt like something wasn’t right and decided to call the manufacturer directly. At this point, the jig was up, and no transfer was initiated. Upon further investigation, the perpetrator had set up email “rules” so all emails in the conversation with the account manager at the exchange service were automatically sent to the “trash” folder. The chief of sales had been using his email at the same time as a hacker and had no idea.
If it were not for two-factor verification on the part of the foreign exchange service, this small-town manufacturer would have lost tens of thousands of dollars. The manufacturer has since set up two-factor authentication on all email accounts to hopefully prevent something like this from happening again.
Insurance Coverage for Social Engineering Risks
Due to the nature of social engineering, cyber and crime insurance policies do not generally cover losses that result from this risk. To protect your business, you need to have a “social engineering fraud coverage extension” added to your crime policy. When considering this type of coverage, it is important to thoroughly review the policy language to make sure you understand what is covered and what is not. Discuss this policy with your insurance agent to ensure you have the coverage you need to protect your business.
Social engineering coverage extensions vary among insurance companies. Options to look for include coverage for the following:
- Vendor or supplier impersonation
- Executive impersonation
- Client impersonation
- Losses beyond use of computer, email, or phone
Mitigating Risk and Protecting Your Business
While it is difficult to completely prevent the risk of fraud by social engineering, there are steps you can take to protect your business. Social engineering tactics are constantly evolving and becoming more sophisticated, so it is important to stay informed and be aware of current techniques. Here are a few tips to help protect your business.
- Develop specific protocols including dual control, separation of duties, and two-step verification for activities that involve access to sensitive information or company finances. Enforce these guidelines, and regularly educate employees on new or continuing risks.
- Be on the lookout for red flags, such as requests to change account numbers, expedited requests, or requests for unusual amounts.
- Limit information that is shared publicly. For example, if you are out of the office and not checking emails, do not broadcast this on social media. Be careful with information that is shared publicly about specific job duties. Job descriptions that are publicly available should be reviewed to ensure no sensitive information is included.
- Be aware of red flags in emails, such as the following:
- Email sent at an unusual time, such as 3:00 a.m.
- Subject line that is irrelevant or doesn’t match the message content.
- Attachment included that you were not expecting or that doesn’t match the message content.
- Bad grammar or spelling errors in email subject line or message content.
- Misspelling in hyperlink.
- Emails that only have long hyperlinks with no further information in the message body.
- Regularly update your antivirus / anti-malware software.
- Be suspicious of tempting offers – if it sounds too good to be true, it could likely be an attempt at social engineering fraud.
Remember, social engineers carry out their schemes by manipulating human feelings, such as curiosity or fear. If you feel alarmed by an email or a request, trust your gut. Paying attention and being alert can help protect against many social engineering attacks.
Contact us to discuss this risk and ensure you have the right coverage to protect your business.
Part of risk management involves not only having insurance but having the right coverage included in your policy. Here are four elements of your insurance policy we recommend reviewing regularly with your agent.
1. Do you have adequate insurance to rebuild your business property and replace your merchandise and possessions?
A building and personal property (BPP) policy covers the building, your business personal property, and the personal property of others. Categories covered include furniture, fixtures, merchandise, personal property owned by you and used in your business, tenant improvements (if leasing/renting), etc. To ensure you have adequate coverage for all of these assets, the value of your property needs to be accurately reported and updated annually to reflect inflation and other changes in costs.
2. Do you have the right insurance in place to protect the personal property of your employees?
To protect the property of your employees, you will need personal effects and property of others coverage added to your policy. This coverage extends up to $2,500 worth of business personal property coverage to your personal effects as well as that which belongs to your officers, partners, and employees. This coverage also protects the personal property of others in your care, custody, or control. Limits higher than $2,500 can be purchased if needed.
3. Does your current policy provide coverage to help keep your business open after disaster?
Business interruption insurance is essential to ensuring a quick resumption of your business after a disaster. Without it, your business may have to close down completely while the premises are being repaired, which may leave you susceptible to losing out to the competition. There are three types of business interruption insurance: business income coverage, extra expense coverage, and contingent business interruption insurance. Talk with your insurance agent to ensure you have the right type of policy and sufficient coverage to protect your business.
4. Will your current insurance policy protect your assets from a lawsuit?
A commercial general liability (CGL) policy protects your business assets against many common liability claims, including bodily injury, property damage, personal injury (including slander or libel), and advertising injury (damage from slander or false advertising). A CGL policy will cover the cost of defending or settling claims. The two major forms of liability insurance policies are occurrence and claims made. An occurrence policy covers you for the policy amount you had in place when the actual injury occurred, not when the claim was made. A claims-made policy covers you for the policy amount you have in place when the claim is made.
“One of the biggest mistakes business owners make is that they don’t buy the right type of insurance and often have gaps in their coverage. Business owners should contact their insurance agent or company representative annually to make sure their insurance is adequate.”
Loretta Worters, Vice President, Insurance Information Institute
A regular review with your insurance agent can help ensure your policy is kept up to date with the changes in your business and industry. Contact us today for a review.
Want cheaper insurance? You are not alone.
This is the biggest reason why new people call our agency. They want a better rate. And when I say “they,” I mean everybody. Nobody wants to overpay for insurance or feel like they are being cheated by their insurance company.
People have a lot of different motivations for seeking a better rate: their current company keeps increasing the rates each year; they pay a lot more than their neighbor; they haven’t had a claim, yet their rates keep increasing. The list goes on.
On top of that, consumers are seeing ad after ad, every day, telling them that company XYZ could save them X amount of dollars on their premium. It is no wonder they are shopping for a lower rate.
But we forget one simple thing that is so important in the insurance buying process:
Cheaper insurance is NOT always better!
And what’s cheapest is not always best.
Now, I don’t want to diminish the role that price plays when you are buying insurance. I spent a lot of time shopping around for my own insurance. I wanted to find the best rate. And I do the same thing for my clients. I try to find them a competitive rate among the companies I represent.
But there are a couple things I don’t do: I don’t skimp on coverage, and I don’t use an insurance company that I don’t know or trust.
The number one consideration when shopping for insurance should be coverage!
There are a lot of questions that need to be answered when it comes to coverage. Do you have the right coverage? Do you know what coverage you need? Do you have enough liability coverage? Do you run a business from your home? Do you have any farm animals? Do you know the different coverages that companies offer and which ones you do or do not want?
A good agent will help you navigate your particular risks and make sure you have the right coverage for your situation. And believe me, every situation is a little bit different.
The number two consideration should be the insurance company you use.
You want to work with a company that is stable, has been around for a while, and has good financial ratings. You want a company with great claims service and superior all-around customer service.
If you decide to work with a substandard insurance company, and they are not willing or able to step up and pay when claim time comes, then that policy is not worth the paper it is printed on.
I also lump the insurance agent you choose into this consideration as well. A good agent/agency will have great customer service and they will recommend reputable companies to do business with.
The number three consideration is price.
If you don’t have the right coverage, or you are not working with a dependable insurance company, then it doesn’t matter how cheap your policy is, because at the end of the day your policy may not be doing its job of providing the service and financial protection you need if a claim occurs.
As I said earlier, cheaper insurance is not always better. The right insurance policy is one that combines all three considerations, or what I call the right value: great coverage with a great company at a competitive price.
If you want someone to help you find the right coverage and value, talk to us. It’s what we do every day.
Workers compensation insurance provides coverage for medical expenses, rehabilitation costs, and lost wages for employees who are injured or become ill at work. This coverage is required by most states and can be the most expensive line of insurance for most employers.
In addition to the cost of workers compensation insurance, there are a variety of indirect costs that can impact your profits when employees are injured at work.
The following graphic illustrates the direct and indirect costs of workers compensation claims.
Reducing Costs with an Effective Safety Culture
Developing an effective safety culture can help reduce workplace injuries and reduce direct and indirect workers compensation costs.
Here are a few key things you can do to improve your safety culture:
Establish a written safety program.
Your safety program should include training on preventing workplace accidents and injuries as well as incentives for maintaining an accident-free environment. Getting commitment from management and employees is key.
Be selective in your hiring process.
Choose new hires who share the same safety culture values. Provide accurate job descriptions to job applicants, obtain previous work references, and conduct criminal background checks. Also, conduct a pre-start post-offer drug test and obtain a motor vehicle report (MVR) for new hires.
Reduce human error.
Ensure employees know the correct methods and procedures to accomplish their work responsibilities. Require employees to demonstrate skill proficiency before performing tasks on their own.
Prevent accident recurrences.
Investigate and document every injury and near-miss. Identifying why and how the accident occurred and making proper corrections can help prevent future incidents.
Contact us to learn more about risk management resources to support your safety efforts.
Life insurance can help your loved ones meet their expenses and maintain their standard of living in the event of your untimely death.
“Two-thirds of Americans recognize they need life insurance yet many do not have adequate coverage to protect their families.” ~ James Scanlon, LIMRA Market Research
Words to Know
Beneficiaries: the person(s) who receive the death benefit when you die. These are individuals you choose – they can be a spouse, children, parents, business partner, etc.
Premium: the cost of the policy. This can be paid monthly or yearly. The cost depends on a variety of factors, including your age, your health, the benefit amount, and the type and length of the policy.
Death benefit: the amount paid to your beneficiaries when you die. You choose the amount when you purchase the life insurance policy. The death benefit is generally income tax free.
How Much Life Insurance Do You Need?
How much life insurance you need depends on your personal and financial circumstances as well as what you’d like to accomplish with the death benefit should you pass away prematurely.
Many experts recommend aiming for 10 to 15 times your income. At a minimum, you should purchase at least enough coverage to pay your funeral expenses (an average cost of $7,000 to $10,000) and your debts. As your family grows and changes, you may need to reevaluate the amount of coverage you have.
Here are a few things to consider as you determine the amount of insurance to purchase.
- How much money will your family need to cover the lack of your income? Are you close to retirement, or are you providing for a young family? The coverage you will need is tied to the amount of income you would need to replace in the event of a premature death.
- What debts do you have that your family will need to pay? These may include a mortgage, automobile loans, student loans, and credit cards.
- What specific expenses would you like to cover for your family in the future? General living expenses, college, weddings, etc.
- Will your family need to replace your annual income, or will your spouse’s income be sufficient?
- Choose a policy with premiums you can afford long term. You are better off purchasing a smaller policy with lower premiums you can fit into your budget. If you purchase a policy with premiums beyond your capacity to pay, you risk letting the policy lapse due to missed payments.
For further guidance in determining how much life insurance you need, download our life insurance planning checklist.
Types of Life Insurance
There are two main types of life insurance: term and permanent.
Term Life Insurance
A term life policy is the simplest and usually the most affordable type of life insurance.
A term policy offers protection only for a specified number of years. You choose the term (length of time you want the policy to last). Typical terms are 10, 15, 20, or 30 years. The policy expires at the end of the term and is no longer in effect.
If you pass away while the policy is active, your beneficiaries will be paid the death benefit that is specified by the policy.
Example: In 1998, John purchased a 30-year term life insurance policy for $500,000. He passed away 21 years later (in 2019). The policy was still active since it was within the 30-year time frame and John had not missed any monthly payments. His beneficiaries received a death benefit from the insurance company for $500,000.
If you pass away after the policy has expired, your beneficiaries will not receive a death benefit since the policy is no longer in effect.
Permanent Life Insurance
The two main functions of permanent life insurance are to:
- Pay your beneficiaries in the event of your death.
- Serve as an investment account that has a cash value you can access or borrow against while you are living. The longer you have the policy, the more cash value it will have.
This type of insurance provides lifelong protection until maturity, usually until the insured is age 95 or older. Permanent life insurance policies can include whole life, universal life, or variable universal life.
While permanent life insurance can be significantly more expensive than term, permanent insurance is a good choice if you want long-term coverage with a predictable premium and a way to accumulate cash funds for emergency needs or opportunities.
Younger families often purchase term insurance and convert to permanent insurance later. Premiums may be higher with the renewed or converted policy.
Talk with Your Insurance Agent
Purchasing a life insurance policy can be intimidating. Your insurance advisor can help make the process easier by offering advice, performing a needs analysis, and explaining coverage options and costs.
Contact us for further guidance on determining the amount and type of insurance that is right for you.