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Business Insurance

Protecting your business can be confusing with all the different risks, and the different ways to address those risks. One business policy likely will not cover all your exposures. With all the effort you commit to starting and growing your business, properly protecting it is key to ensuring its long-term health and a return on your investment. We have over 15 years of business insurance experience and offer professional advice and guidance how to best insure your business. We access more than 100 commercial insurance companies to ensure that you get the right coverage at competitive rates.

3 Common Mistakes People Make:

  1. Assuming your Business Policy covers all potential exposures – A Business Owners Policy (BOP) contains many, but not all coverages a business needs. The basic BOP provides coverage in three primary areas:
  • Business Liability– covers you if a person is injured on your premises (e.g. a slip and fall), or your product or service leads to an injury or damage to someone’s property.
  • Business Property– covers you if your property (e.g. inventory or business equipment) is damaged from a covered peril (fire, theft, smoke, water, etc…)
  • Business Income– covers you for the lost business income after a covered loss.

A basic BOP policy will not cover the following claim scenarios unless you add additional coverage:

  • An employee sues you for wrongful termination or harassment
  • A hacker breaks into your employee or client files and steals personal information
  • An employee runs an errand for your business in their personal vehicle and severely injures someone in an accident
  • You are carrying inventory or business tools on your truck and they are damaged in an accident or stolen
  • You offer your professional advice or services and your client sues you stating they did not get the result they expected.

These are just a few of the losses that are not covered by a basic BOP. We can review your policy with you to determine if you have the coverages you want and need.

  1. Underinsuring inventory, equipment, furniture, and tenant improvements – Whether you own a restaurant, retail store, manufacturing firm, or a professional office, you have business property that needs to be insured including:
  • Inventory– raw materials used in your processes or finished inventory that has not been sold or shipped. In a restaurant, inventory includes ingredients or liquor/wine supplies.
  • Equipment– processing equipment, machinery, computers, and tools used in your business.
  • Furniture and Fixtures– desks, cabinets, chairs, tables, shelving, and storage systems.
  • Tenant Improvements– the upgrades you make to a rented space for your business. Examples include new flooring, painting, lighting, interior walls, upgraded electrical, installed cooking equipment and ventilation, and other improvements you could not take with you if you moved.

Underinsuring these items can impact your ability to continue your business after a large loss.

  1. Treating “Employees” as “Independent Contractors” – Some business owners try to save money by classifying their “Employees” as “Independent Contractors” and pay them via a 1099. There have always been laws/rules to differentiate an “Employee” from an “Independent Contractor”, but these rules differed between the IRS and State Labor Boards. Recently, California passed Assembly Bill 5 (AB 5) to provide more clarity to the situation. AB 5 essentially states a worker is an “Employee” unless the business owner can prove otherwise.
    While there are some exemptions to the guidelines, most workers are “Employees” and are entitled to company benefits, and qualify under labor laws governing pay, rest periods, and Workers Compensation. Failure to classify workers correctly can lead to lawsuits and substantial fines.

    If you are unsure whether your worker(s) should be classified as “Employees” or “Independent Contractors”, we can recommend an attorney for you to speak with.

 

Buying Business Insurance FAQ’s

You’re in good company

What is covered by a Business Owners Policy (BOP)?

A Business Owners Policy (BOP) contains many, but not all coverages a business needs. The basic BOP covers a business in three key areas:

  • Business Liability– covers you if a person is injured on your premises (e.g. a slip and fall). Coverage is also provided if your product or service leads to an injury or damage to someone’s property. Examples include:
    • Manufacturing or selling a hair care product that damages your customers’ hair or skin.
    • An Auto Repair facility works on a customer’s brakes and installs them incorrectly, leading to an accident and damage to their car.
    • A customer in your restaurant claims food poisoning.
    • Business Property– covers you if your business property is damaged on your premises from a covered peril (fire, theft, smoke, water, vandalism, etc…). Examples include:
      • A theft where your inventory and/or office equipment is stolen
      • A fire that damages your custom flooring, lighting fixtures, and the design improvements you made to the space
      • A water hose in your restroom breaks and the water damages boxes of inventory on your warehouse floor.
      • Business Income and Extra Expense– covers you for lost business income after a covered loss. It will also cover extra expenses needed to bring your business income back to pre-loss levels as quickly as possible. Examples include:
        • Your restaurant is damaged by a fire and it takes 11 months to rebuild. Your lost business income during this period is covered. The additional advertising needed to let the community know that you re-opened so you can quickly build revenue to pre-loss levels, would be covered as an Extra Expense.
        • A key piece of equipment is damaged by a covered loss. The cost to repair the machine and the resulting lost income are both covered. The cost to get expedited delivery for a replacement part to shorten the repair time would also be covered as an Extra Expense.

 

I just started a new business. What insurance do I need?

Depending on your business, different types of insurance are needed. The most common insurances needed are:

  • Business Owners Policy (BOP)Learn what a BOP covers
  • Workers Compensation– If you have any employees (even one part-time employee) the law requires you to carry Workers Compensation. This protects both you and the employee including paying the employee while injured, in the event they are unable to work.
  • Professional Liability (a.k.a. Errors and Omissions)– Protects your business if you offer professional services or advice, and a client claims your advice or service caused them a financial loss. Whether you made an error, gave inaccurate advice, or did everything correctly, the policy provides you legal representation, and if necessary, will pay the claim on your behalf. Bookkeepers, Accountants, Business Consultants, Marketing Consultants, and many other professionals need this coverage.
  • Commercial Auto– If you use your vehicle in your business, you may need a Commercial Auto policy. This will depend on the vehicle, how the vehicle is used, who drives the vehicle, and how it is registered.
  • Cyber Liability– If your business maintains private personal or employee information, you are a target for hackers. The National Cyber Security Alliance recently released statistics that show 20% of small businesses experience such an attack every year, and that 60% of these businesses were forced to close within 6 months of being hacked. This coverage pays the various costs associated with this type of attack.
  • Employment Practices Liability Insurance (EPLI)– Per the Insurance Information Institute, the number of lawsuits filed by employees against their employers has been rising. EPLI provides protection against many kinds of these suits. The most common claims are for:
      • Sexual harassment
      • Discrimination
      • Wrongful termination
      • Retaliation

      This coverage pays for legal representation, and if necessary, will pay the claim on your behalf.We can help you determine which coverages your business will need.

Do I need business insurance for a home-based business?

It’s important to know that homeowner policies exclude coverage for most business exposures. Therefore, depending on your business, you have risks that need to be covered. Consider the following:

  • What liability exposure do you have from the products you sell, the services you provide, the advice you give, or if people come to your home?
  • Do you have inventory, equipment, or tools that you use in your business that need to be covered?
  • Do you have any employees? Even if your employees are home-based, Workers Compensation is still required.
  • What personal client information do you maintain and how well is it protected from hackers?

The fact that your business is home-based does not change that you have business risks that need to be insured. We can review these risks with you to determine what coverage is needed.

How can I lower the cost of my Business Insurance?
  • The easiest way to lower the cost of insurance is to raise your deductibles. Taking a higher deductible can lower your overall premium provided your business can handle the higher out-of-pocket cost.
  • Packaging products together with the same company can also save money. Many insurance companies offer discounts when multiple lines of coverage are placed with them, including the Business Owners Policy, Workers Compensation, and Commercial Auto.
  • Asking for “Credits”. Most commercial insurance companies offer “credits” (discounts) if you can justify how your business prevents losses. This can include safety programs, tenure of employees, training programs, regular equipment maintenance, quality checks, or anything else that your company does better than your peers that will prevent losses.
  • Reviewing your coverage limits and rating factors. Lowered inventory levels, reduced revenue, or lower payroll are all opportunities for a lower premium. Dropping a line of business or service, or renting a smaller space create additional opportunities for reduced premiums.

We can review your coverage to determine if there are any opportunities for savings.

Our Clients Say It Best

“After 20 plus years of neglect by our previous agent we asked Jon to take a look at our business insurance policies. Jon spent more time going over what we do and what we needed as far as coverage in that initial visit than our prior agent did in all the time we dealt with him. In the end we came away with more extensive coverage and a lower total premium, still staying with a well known and highly rated company. 5 years later JSG is handling all our business insurance including business auto.

I have also moved all my personal policies (homeowner, auto, personal liability) over to JSG and couldn’t be happier. Insurance can be expensive and there’s no way around that. What doesn’t make sense though is paying for coverage you don’t need, or not having enough coverage when you need it. With JSG looking over all this for me I’m confident that my needs are being perfectly addressed.” — Kevin K.

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If you have other questions, ask us here and provide your e-mail address. We will answer your question within 2 business days. We promise that we won’t spam your e-mail address or sell it to a third party.









    Have a question?
    Feel Free to Ask

    If you have other questions, ask us here and provide your e-mail address. We will answer your question within 2 business days. We promise that we won’t spam your e-mail address or sell it to a third party.