Business Insurance and Woman
Courtesy of Women have made great strides in the business world in the past few decades. And business insurance is essential to protecting their hard-earned capital, according to the Insurance Information Institute (I.I.I.).
Forty years ago women owned just 5 percent of all small businesses in the United States. Today, they own one-third, generating nearly $1.5 trillion in revenue and employing over 7.9 million people. Between 1997 and 2015, the number of women-owned firms increased by 74 percent, according to the 2015 State of Women-Owned Businesses Report. And the majority of new women-owned firms launched in 2014 were owned by minority women.
“Whether launching a new business, growing your business or competing in the global marketplace, it is essential that women business owners get the right type and amount of coverage,” said Loretta Worters, a vice president with the I.I.I. “Without adequate insurance, a natural catastrophe, employee lawsuit or even the death of a business partner could destroy what they’ve built,” she warned.
In recognition of Women’s History Month, the I.I.I. recommends the following six strategies to ensure that your business is financially protected:
1. Assess your risks. What business property, including inventory and equipment, do you own? Do you have employees? What is the nature of your business? This basic snapshot will help an insurance professional provide recommendations about the type of coverage your business needs.
2. Find the right insurance professional. When shopping for insurance most business owners use an insurance broker—you’ll want to find one who is familiar with the risks of your specific business. A qualified broker can help collect all the necessary information and paperwork to apply for a policy, and comparison shop among several options and quotes. Here are some tips for finding the right fit: Finding the Right Insurance Professional for Your Business.
3. Compare rates. As a general rule, you’ll want to get business insurance quotes from at least three different companies. Try to find policies that offer similar coverage so that you can clearly compare prices.
4. Evaluate insurers, policies and services. When purchasing business insurance, price is just one consideration. Make sure a potential insurer is reputable and in good financial condition. In addition, review and compare policies in depth. Does one policy have exclusions that another does not? In the case of litigation, does the insurer provide an attorney or reimburse you for an attorney you choose?
5. Lower your premiums. Choosing a higher deductible can lower your premiums significantly and insurers will often lower your rates for putting in place programs to minimize losses from fire, theft and employee and customer injuries. This is particularly important for start-ups that are low on initial capital.
6. Review your risks and insurance policies annually. Talk to your insurance professional prior to renewing you coverage each year to determine what adjustments should be made to your business insurance policies. If your business is expanding, you have purchased or replaced equipment or have started working with vendors internationally, you may have new liabilities that require higher insurance coverage.
Don’t Overlook These Coverages
Life insurance is vital to any business—both personal and for the company. Should you die prematurely, a personal life insurance policy can replace your income from the business and protect your family. In the event an owner, partner or key employee dies, life insurance will take care of your business.
Another key coverage is disability insurance. More than twice as many people will be disabled during their career as will die before they retire. “Income protection for small business owners is critical for the long-term security of the owner and the company if they cannot work due to an injury or illness,” said Worters.
Auto Insurance and You
Courtesy of iii.org
When purchasing an auto policy, it’s important to understand the factors that affect your policy costs and coverage. Unfortunately, there's a lot of bad information that passes for "common wisdom"—here, we separate myth from facts about car insurance.
Myth 1 – Color determines the price of auto insurance
It doesn't matter whether your car is “Arrest Me Red” or “Hide In Plain Sight White”—the color doesn’t actually factor into your auto insurance costs. The price of your auto policy is based on many factors, such as car make, model, body type, engine size and the age of the vehicle, as well as the car’s sticker price, the cost to repair it, its overall safety record and the likelihood of theft. Insurers also take into account the age, driving record and sometimes the credit history of the driver.
Myth 2 – It costs more to insure your car when you get older
Quite the opposite, in fact—older drivers may be eligible for special discounts. For example, those over 55 years of age can get a reduction in their auto insurance premium if they successfully complete an accident prevention course (available through local and state agencies as well as through the AAA and AARP). Retirees or those who aren't employed full time—and therefore, who are driving less—may also be eligible for a car insurance discount. Older driver programs and discounts vary by state and insurance carrier and driver age, so if you think you may qualify, check with your insurance professional.
Myth 3 – Your credit has no effect on your insurance rate
Your credit-based insurance score—which is derived from your credit history—may matter. A good credit score demonstrates how well you manage your financial affairs and has been shown to be a good predictor of whether someone is more likely to file an insurance claim so many insurance companies take it into consideration when you want to purchase, change or renew your auto insurance coverage. People with good credit—and, therefore good insurance scores—often end up paying less for insurance.
Myth 4 – Your insurance will cover you if your car is stolen, vandalized or damaged by falling tree limbs, hail, flood or fire
This is only true if you opt for comprehensive and collision coverage along with your standard policy. If a car is worth less than $1,000, or less than 10 times the insurance premium, purchasing these coverages may not be cost effective—but you do need to have collision and comprehensive insurance to fully protect your vehicle from all types of damage.
Myth 5 – You only need the minimum amount of auto liability insurance required by law
Almost every state requires you to buy a minimum amount of auto liability coverage but buying only the minimum amount of liability means you are likely to pay more out-of-pocket for losses incurred after an accident—and those costs may be steep. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident. If you have substantial personal financial assets to protect in the event of a lawsuit, you may even want to consider an umbrella liability policy.
Myth 6 – If another person drives your car, in the event of accident, his or her auto insurance will cover the damages
In most states, the auto insurance policy covering the vehicle is considered the primary insurance. This means that the car owner’s insurance company must pay for damages caused by an accident, regardless of who is driving. Policies and laws differ by state, so make sure you understand the rules before allowing another person to drive your car.
Myth 7 – Soldiers pay more for insurance than civilians
If you are in the military—regardless of which branch—you actually qualify for a discount on auto insurance. You'll need to supply documentation that lists your name, rank and the time that you will be enlisted in the service (in some situations, you might be able to have your commanding officer make a phone call on your behalf). Shop around—some auto insurance companies provide discounts for former members of the military, as well as their families.
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Myth 8 – Personal auto insurance also covers business use of your car
If you are self-employed and use your vehicle for business purposes, personal auto insurance may not protect you so it’s important to purchase business vehicle insurance. If you have other people—such as employees—using your vehicle, regularly check their driving records.
Umbrella Insurance Policy-Do I Need It?
Courtesy of iii.org
If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney's fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That's what a personal umbrella liability policy provides.
An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.
For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.
Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.