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Use Knowledge to Offset Higher Business Insurance Costs

Having the proper business insurance can be vital to growing your company and protecting your future. While every business varies in terms of exposure to risk and the related cost of coverage, knowing the 5 key cost drivers can help you reduce your insurance costs, whether you are in a mid-sized city like Reading or Allentown, a smaller city like York or Lancaster, or a large city like Philadelphia, especially if you consider costs before launching your business.

In the end, the cost of business insurance is driven by risk levels as perceived by your insurance carrier, and increases due to higher levels of risk. Regardless of the precise details associated with your business, your costs will be affected by some factors that statistically are related to your company type, company location, and other factors. 

Here are 5 Key Drivers of Business Insurance Costs:

#1 - Coverage Level Desired

It goes almost without saying that the cost of your business insurance coverage depends largely on the amount of coverage you desire. It is wise to get the advice of a trusted independent insurance agent before finalizing your coverage level. In some cases you may be able to reduce coverage in a policy if the coverage overlaps with protection already provided in another policy.

#2 - Business Location

Insurance costs may vary widely by state and by city. Businesses located in high-risk areas will pay higher rates. Risk assessments are affected not only by crime rates, but by the likelihood of incurring damage due to storms and other natural disasters. Check with your insurance agent regarding insurance costs prior to relocating your business or purchasing a new property.

#3 - Market

A business in an industry known for high losses will incur higher insurance costs, all else being equal. Industries known for physical risk and high worker's compensation losses will incur higher commercial insurance costs. Expect considerable swings in insurance rates based on the percentage of your employees working in an office setting vs. a construction or other setting known for physical risk.

#4 - Business Insurance Claims History

As with auto insurance and homeowners insurance, businesses also incur higher rates as the frequency of their claims increases. Consider potential cost increases that may result from filing a claim vs. covering the cost out of pocket without filing a claim, especially when you are considering changing insurance carriers. 

#5 - Optional Coverage Selected 

Although adding optional coverage increases your total insurance bill, optional coverage may be to your benefit. Consider business interruption insurance and key person insurance for executives and others who cannot be easily replaced, and whose absence is likely to cause a slowdown in business.

Do it Right - Get Help

Knowing the key drivers of business insurance costs and planning accordingly can help you navigate your insurance coverage options, and help you achieve the right level of coverage at the right price. Ask your independent insurance agent for assistance in understanding your options and the impact on cost.

We're Ready to Assist You with All Your Business Insurance Needs

American Insuring Group is an independent insurance agency located near Reading, PA, in Berks County. We can help you get the right business insurance coverage for your business at the best price by researching the most affordable insurance costs from our many competing insurance carriers.  Contact us today at 800-947-1270 and request a no-obligation, no-cost consultation, or fill out the form on our Contact Us page to get started.

Is Business Insurance Too Complicated?

Business insurance: mention the topic and count down the seconds until yawns form and eyes glass over. For some, commercial insurance is just slightly more interesting than reading the phone book or memorizing the periodic table of elements.

Perhaps that’s because business insurance seems complicated, or because we suspect we’ll never really need it.  Talking about what might occur, such as a catastrophe requiring financial assistance, rather than what is likely to occur (business as usual), can seem so abstract, such a waste of time.  

3 Things Needed for Entrepreneurial Peace of Mind

Ah, but think of it this way: wouldn’t it be great to have the peace of mind of knowing that you are financially covered against many of the uncertainties life can throw at you? Isn’t that better than the nagging feeling that you may be unprotected against some unknown liability for which you failed to get the needed business insurance protection? 

To get to that blissful entrepreneurial state of mind, you need 3 simple things, none of which require yoga classes or the  help of a Zen master: 

• Knowledge of basic business insurance terms and types of protection
• A trustworthy and capable independent business insurance advisor
• Decisiveness

Get all three, and in no time you’ll be covered with the right business insurance protection. Whether your business is in Reading, PA, Berks County, Philadelphia, Lancaster, Allentown, or beyond, every business owner who meets those 3 simple criteria sleep better at night. 

Buiding Your Business Insurance Knowledge: 14 Terms You Need to Know

While we can’t cover everything you need to know in this short post, we can get you started by presenting 14 key commercial insurance terms, each with a brief definition, in alphabetical order.  Read over them and then jot down some follow up questions for your independent insurance agent.  Once you have solidified your knowledge, decisiveness will follow. Take action for the good of your business, your employees, and your family.

1. Bonding
   A guarantee of performance required for many businesses, and often by general contractors, janitorial companies, and businesses with government contracts
   
   
2. Broker
   An independent insurance agent who represents multiple insurance companies, and is therefore in a better position to find the right business insurance at the right price vs. a single-company insurance salesman
   
   
3. Business Interruption Insurance
   Coverage to replace lost sales and income suffered due to a covered loss
   
   
4. Direct Writer
   The opposite of a broker, a direct writer represents a single insurance company
   
   
5. Disability Insurance
   Insurance that pays a fixed monthly benefit if one becomes disabled and unable to perform their regular job
   
   
6. Employment Practices Liability Insurance
   Coverage that protects the business from being sued due to the actions of employees, such as discrimination, abuse, sexual harrassment or wrongful termination
   
   
7. Errors and Omissions Liability Coverage
   Protection for accountants, consultants, and other business professionals against damages due to an error or omission in work performed
   
   
8. General Liability Insurance
   Business insurance protection against accidents of bodily injury or property damage to other persons or property
   
   
9. Key Person Insurance
   Life insurance taken out against a key person, typically an executive or other key person, with the business itself as the beneficiary
   
   
10. Package Policy
    A business insurance policy combining several types of protection in one package
    
    
11. Property Insurance
    Protects equipment and other physical property from losses due to fire, theft, and other incidents, and is available in the form of “named peril” and “all risk” versions
    
    
12. Replacement Cost Insurance
    Insures the business for the full current replacement cost
    
    
13. Umbrella Coverage
    Liability insurance protection for amounts exceeding coverage on main policies, in the event a lawsuit exceeds underlying limits of coverage
    
    
14. Worker’s Compensation Insurance
    Business insurance for medical, rehab, and lost wages for employees who are injured at work (usually state mandated)

There you have it. 14 simple business insurance terms that probably have you wondering what coverage you are missing, and ready to contact your independent insurance agent. Do that, and then get ready to be decisive. You’re almost there. 

How to Get Help with Your Business Insurance

Need help in figuring out the right commercial insurance protection for your Reading PA, Berks County, Philadelphia, Allentown, or Lancaster County business? Call us today at (800) 947-1270 for a free consultation, or click to contact us.

Small Business General Liability Insurance – What You Don’t Know CAN Hurt You

The number of small businesses operating from home has exploded in recent years due to downsizing and other factors. As a result, nearly half of all US homeowners are exposed to some type of business liability risk in their home. From the moonlighting laid-off contractor to the babysitter, to the part-time consultant, most small businesses operating from home have inadequate general liability insurance protection.

A business operating from home is almost completely excluded from liability insurance coverage in standard homeowners insurance policies, yet most small business owners mistakenly think they are properly insured.  The resulting lack of business liability insurance coverage leaves the in-home small business owner dangerously exposed to financial ruin from a lawsuit due to injury or property damage.

Do Your Business Insurance Homework

The key is to do your homework. Don't assume you have business liability insurance coverage under your homeowners insurance policy.  The annual revenue limitation for an in-home business to be covered under a homeowners insurance policy is a paltry $2,000.  Any higher, and most homeowners policies will exclude the exposure.  Even when operating for a time below the $2,000 revenue ceiling, there are limitations to what types of business exposures are covered under a homeowners insurance policy, and these often include many restrictions.

Purchase a Homeowners Insurance Policy with an In-home Business Liability Insurance Extension

Purchasing an in-home business liability insurance rider is the easiest and most economical way to cover your in-home business liability exposure.  Many homeowners insurance policies offer this rider for as little as $150 annually.  Some in-home business insurance exposures do not qualify for the homeowners rider. In such cases a stand-alone general liability insurance policy is the solution.

Need to upgrade your homeowner’s policy to properly insure your in-home business? Contact us for a free, no-obligation business insurance review at 1-800-943-2198.

Understanding Commercial Insurance Can be One Tough Job!  

Being a small business owner today is a tough job!  Between rules and regulations, licenses and taxes, and banking and commercial insurance, it sometimes seems you need your own board of directors just to help manage your business!

At American Insuring Group, Small Business Insurance is our specialty.  We can help you, the business owner, understand not only what commerical insurance protection your company needs, but also what business insurance is required of you to satisfy legal requirements.

Our office represents over a dozen "A" rated general insurance companies that specialize in small business insurance and we have access to dozens more specialty commercial insurance companies that fill specific small business insurance needs for our clients.

So How Many Types of Liability Insurance Are There?

The commercial insurance needs for a business owner can be daunting.  First, there is Public Liability Insurance that is a must to protect the business from lawsuits and claims for injuries or property damage to others.  But Public Liability Insurance isn't that simple.  What type of liability insurance protection do I need?  Is Premises Liability Insurance enough?  What if I leave my business location and go to someone else's home or business location?  Does my Liability Insurance cover me there as well?  What about when I finish a job and leave?  Do I have Completed Operations coverage if sometime later, after the job is finished, someone is hurt by my work or property damage is caused?

Are you a business owner who makes something, sells something, or just handles products someone else makes?  Do you have Product Liability Insurance coverage included in your General Liability Insurance coverage?  What if you harm someone's reputation or cause someone to lose sales, and they look to you for compensation? Personal or Advertising Injury Liability coverage protects the business owner from these claims.

What if an employee claims that you fired them under false pretense?  Or they make an allegation of harassment against you?  Employment Practices Liability Insurance is the protection that any business owner who employs someone must have to be protected.

There are many extentions of Public Liability Insurance the business owner should understand and use to be protected from the unexpected.  At American Insuring Group LTD., our licensed agents have the understanding and experience in Commercial Insurance to help you determine your insurance risks and to identify the insurance solutions to properly cover your businss. 

Workers Compensation Insurance - Are You Operating Legally?

Then, there is Workers Compensation Insurance for the small business that employs people. Most states require the business owner to cover employees for work related injuries.  What if you are a corporation without any employees?  States consider a corporation to be its own entity, and even you, the owner (officer), are considered an employee. Therefore you must either have Workers Compensation Insurance coverage or have the proper exclusion paperwork filed with the Department of Labor and Industry. At American Insuring Group, our licensed staff can help you with all the forms necesasary to be legal. 

Not only does Worker Compensation Insurance cover medical bills and lost wages for employees who get hurt during working hours, but there is a second business insurance coverage that is included with most policies.  Employer's Liability Insurance covers the business owner if an employee presents a claim against his employer for alleged negligence for his injuries.  An example of this is an employee who cuts off his finger on a machine.  Workers  Compensation Insurance would pay medical bills and lost wages, but if he claims the business did not properly maintain the equipment and now he must live life without a finger, the business owner would have protection from such a lawsuit under Employer's Liability Insurance.

Liability Insurance and Worker's Compensation Insurance covers only some of the insurance needs for the business owner. Other types of coverage include: Property Insurance protection, Van Insurance for your business vehicles, Umbrella Insurance for excess insurance protection, Bonding for the contractor's needs and Group Medical Benefits for your employees.

We Can Help You Make the Right Liability Insurance Decisions for Your Business

At American Insuring Group LTD, we take the time to understand your business so we can make sure every exposure to risk is discussed and covered by our small business insurance policies.  Call us today at 800-947-1270 or email me at david@aigltd.com. I would love to meet or talk to you and help you understand your business insurance needs.  If you already are covered by insurance, a second opinion may often uncover coverage gaps or missing insurance coverage that is needed.