Business Insurance


These days you can buy nearly anything online, even your insurance.  Although it may seem like you are saving time and money by obtaining a policy online, it may not be so convenient later.

One of the biggest advantages of working with an agent is that they have time to sit down and talk with you, in turn allowing you to establish a one on one relationship.  Just one visit with an agent can prove to be beneficial in respect to knowing what your options are and choosing the best possible coverage that fits your needs.  In addition to this, based on your answers to a few simple questions, an agent is able to find possible discounts that you may be qualified to receive.  Purchasing insurance can sometimes be stressful and an agent can alleviate some of that stress, if not most of it just by understanding and being able to relate to you.  After all, we are human and it’s comforting to know that someone has your best interest at heart.

Ben Franklin said it best, “Time is money”. Although an online agency provides you with a phone number where they can be reached, you may not be able to speak with a live person. I’m sure that we have all experienced the downfalls of 800 numbers and the “customer service” they provide.  One could spend 30 minutes or more being looped from one automated message to the next only to reach a live person who ends up transferring you somewhere else. Being able to reach your agent by phone without having to guess which automated option to choose can save you both time and aggravation.

One final advantage to working with an agent who is local is that they can work with you in regards to your coverage.  They can adjust your limits and/or deductibles without sacrificing the important coverage that you need resulting in a policy that is tailored just for you and your pocketbook.   Online agencies give you the freedom to choose the coverage you want according to what you can afford, but an agent can recommend coverage that will protect you and your family all while keeping you within your budget.

For example, the required liability coverage amounts in the state of Arizona are 15/30/10.  Sure, you may get a huge savings up front, but will you pay for it in the end?  If you cause an accident which results in bodily injury more than $15,000 or property damage more than $10,000, you are financially responsible.  Just to give you an idea, according to the National Safety Council, the average cost of injury in a car accident is $61,600 and the average price of a new vehicle is a tad over $30,000 according to Forbes.  Saving a couple of dollars by reducing coverage could cost you thousands in the long run.

With all of the decisions that you make in life, don’t let choosing the right policy overwhelm you when you have an agent right who is right around the corner.  Make an appointment today by calling us @ 480-288-5900.  We can help you protect what matters most!

Does your business need Kidnap Ransom Insurance? (image via google)

When it comes to insuring your business, there is basic coverage and what is called specialty coverage.  Basic coverage is the standard type of insurance almost every business needs to have, property, liability, business auto, and worker’s comp.  Specialty coverage is less standard and is provided to cover specific types of risks some businesses face and therefore must mitigate.

There are a wide range of specialty insurance products that are industry specific.  If you are an exporter, you will need Ocean Cargo coverage.  If you are a financial advisor, you might need special coverage specific to any fiduciary responsibilities you might have.  As these products can be very industry specific, you will want to talk to your agent, check with any professional organizations you belong to, and ask your industry contacts for more information on the specific types of coverage you need.

There are also a few specialty products that may be needed across a variety of industries.  Here is a brief overview of each of these types of coverage and information on what kind of businesses may need to secure it.

Key Employee Life Insurance

Regardless of how big your business is, there are likely people within in, including yourself, that may need separate life insurance policies in order to protect the company.  Generally when we talk about life insurance as it relates to an employee, it is the life insurance policy the company provides or arranges for the employee.  The beneficiary is chosen by the employee and the intent is to take care of the employee’s family in the event of their death.  Key employee life insurance is exactly the same except that the beneficiary is the business and the intent is to help the business recover from the loss of a key employee.

Businesses whose income is completely generated by or reliant on the participation or involvement of specific people may need to purchase this type of policy.  Law firms, doctor’s offices, financial advisors, and small business owners are all examples of the type of business that can benefit from this type of policy.   Generally, this type of policy is a term life policy and it only remains in effect so long as the employee is employed by the business.

Kidnap and Ransom Insurance

Around the world, research shows that criminal gangs kidnap an estimated 25,000 people each year with the sole intent of collecting ransom payments and making money.  In many countries, kidnap and ransom is an industry bringing in millions of dollars a year.   For businesses operating in these countries, this fact can pose significant risks to employee welfare and financial health.

A kidnap and ransom policy is designed to provide a limited amount of protection for businesses operating in these areas of the world.  The type of policy determines what expenses and costs are covered.  Most individual polices will not cover the cost of the actual ransom payments but does include the expense of negotiating the ransom and securing the safe return of the person who was kidnapped.   Most corporate policies cover negotiation expenses, ransom payments, and lost wages owed to the kidnapped employee.

Companies of any size that are operating in parts of the world where kidnap and ransom activities are prevalent need this kind of coverage.

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Does your business need umbrella coverage? (Image via FreeFoto)

When it comes to buying the insurance you need to protect your small business, the wide range of options can be confusing and overwhelming.  There are so many different types of policies and different level of coverage that it isn’t always easy to know if you have all the coverage you need, if you are underinsured, or if you have policies that provide coverage for risks you don’t face.  One of the most common questions small business owners ask about the coverage they need is about umbrella coverage and whether or not they need it.

Surprisingly, although it is the type of insurance almost everyone and almost every business should have, it is not as well understood as the other common coverage types like auto, liability, and worker’s comp.  This can have serious, long lasting consequences for business owners of all types.  To understand why Umbrella coverage is so critical to small businesses, you need to first understand what it is and what it does.

Umbrella insurance is a kind of liability coverage.  These policies extend, like an umbrella, over most of your other liability policies like your business auto and your general liability.  If there is a claim that breaches the upper limit of one of your base policies, the Umbrella policy provides coverage over and above that limit.  For example, if you or one of your employees were at fault in an auto accident where your company’s car caused damage in excess of the $50,000 property damage limit on your business auto policy, your company would be responsible for paying every dollar over that limit out of pocket.  The insurance company pays $50,000, you pay the rest.   Now, if your business has a $5M Umbrella policy, the insurance company for your base policy would pay for any damages up to $50,000 and then the Umbrella carrier would pay for any damages from $50,001 to $5M.  To break this down, having that Umbrella policy in place could mean the difference between your company paying nothing and your company being responsible for millions of dollars of damages.

When looked at from this perspective, it is clear why many businesses must have an Umbrella policy in place to protect the viability of the business.  In order to determine if your business needs this type of coverage, here are some things to consider.

If your business requires you or any employee to operate a motor vehicle as part of doing business, you must have an umbrella policy over your business auto policy.  Car accidents can lead to incredibly expensive liability lawsuits and even minor accidents can result in medical bills that exceed your business auto policy limits.  Don’t take the risk; if your business has auto coverage, you need an umbrella policy.

If your business has assets, you need umbrella coverage.  It doesn’t take much these days for someone to file a lawsuit and even if you win, the cost of defending yourself can wipe out your available cash and even your businesses assets.  If you lose, the situation can quickly compromise your entire business.  Umbrella coverage protects you from the high costs associated with getting sued.

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Fire

Is your business adequately insured in the event of an unplanned event? (image via public domain image.com)

One of the mostly costly mistakes business owners make is not having the right kind or amount of insurance in place to protect their business and their income.   Thinking they understand the ins and outs of business insurance, they forge ahead without working with an expert or getting a true picture of their true needs and the insurance coverage they need to mitigate their exposure.  Unfortunately, making this kind of mistake can actually cost more than just money; it can cost you your business.

Here are 6 common mistakes businesses make with their insurance.

  1. Not Buying Insurance

This is by far the biggest mistake business owners make.  Whether it seems like the benefit doesn’t seem to justify the cost or they don’t realize they need coverage, not buying insurance is the biggest mistake any business can make.  Business owners don’t realize that it only takes one lawsuit to wipe them out.  They feel that as long as they follow the rules, operate legally, and do what they are supposed to do, they will be ok.   What they don’t realize is that even if they are sued and win, the cost of defending themselves against even an unfounded lawsuit may be enough to bankrupt their business.

  1. Buying Inadequate Coverage

Many businesses that do purchase insurance don’t actually buy enough to cover their potential losses.  Business owners don’t realize this mistake until it’s too late and they are stuck paying for attorney fees and legal settlements out of pocket.  Purchasing inadequate coverage is only slightly better than not having any coverage at all.

  1. Buying the Wrong Coverage

Alongside buying inadequate coverage is buying the wrong coverage.  Business owners who don’t work with an insurance professional to assess their risk and secure the right coverage to protect their business from losses, run the risk of having to cover costs that are not covered by the policy they purchase.

  1. Going Without Business Income Coverage

Business income coverage which is also called business interruption insurance provides financial support when something interrupts your ability to conduct business.  Going without this coverage can endanger the business as much as going without liability or property coverage.  For example, there is a fire in a retail shop that destroys or damages all the merchandise forcing the shop to close for three weeks.  The business owner’s property insurance covers the lost merchandise, but without business income coverage, the business owner has no way to recover the lost income from having the shop closed for three weeks.

  1. Misunderstanding Coverage

Business owners who buy the right amount of the right coverage can still run into problems if they don’t understand what things are specifically excluded from their policy.  Most business insurance policies are full of exclusions and business owners who don’t understand these exclusions can be left holding the bag when they thought they were covered.

  1. Carrying Low Deductibles

Business owners can decrease their costs while still protecting their business by increasing the deductible on their policies.  Carrying a low deductible on your policy may seem like the better business decision because it offers more protection, but it may not be the right decision for your business.  High deductibles reduce your overall operating costs while offering protecting you from the kinds of losses that could compromise your business.

The best way for business owners to ensure they have the coverage and protection they need is to work with a qualified insurance professional.  Their agent or broker can assess their needs and then help them find the best insurance package to meet them.

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Commercial Auto Policy

Does your job constitute your needing a Commercial Auto Policy? (Image via Can ‘o’ Rye on Flickr)

Do you need a Commercial Auto Policy? This is a question many small business owners ask themselves, their friends, and hopefully their insurance agents.  There is a common misconception that your personal auto policy will cover any losses incurred while driving for the business if you are driving your personal automobile which is covered under your personal auto policy.  This makes a certain kind of sense on the surface.  In essence, you are buying two insurance policies to cover the same exact circumstance, you, driving your car.

Commercial vs. Personal

The main difference between the two types of coverage is how you are using the car.  If you are only using it to drive your family around or to commute to your job, you only need a personal auto policy.  This is true in almost every case, although there are some circumstances where the type of vehicle you own may require you to purchase a commercial auto policy regardless of whether or not you are using it for commercial purposes.  If, however, you are using your vehicle for business activities, you likely need some type of commercial coverage since the majority of personal auto policies exclude losses resulting from business activity.

What Constitutes Business Activity?

This can be a complex question, especially for small business owners.  If you drive your son to school on the way to an appointment with a client, it isn’t always clear which part of the trip is business from an insurance coverage perspective.  The best way to understand what is business activity and what is not is to ask your insurance agent.  If in doubt, assume that anything related to your business requires commercial coverage.

There are some things you can ask yourself that may help you determine if the driving you do would fall under commercial or business activity.

  • Do you deliver anything to customers or clients using your car?  Things like pizza, newspapers, Avon, or any other product that you put in your car and then transport for delivery can be considered commercial activity.
  • Who is driving the vehicle?  If you allow employees or contract workers to drive the car for business purposes, this won’t usually be covered by your personal policy.  Even if you are the only driver, there is a good chance that commercial coverage will be required.
  • Who is riding in the vehicle? If you are using the vehicle to transport other people and getting paid for it, you absolutely need commercial coverage.
  • What percentage of use is personal and what percentage is commercial?  Although this doesn’t always factor into coverage determinations, some insurance companies require commercial coverage if the vehicle is being used primarily for business use.  Check with your agent to see if this applies to your coverage.

The bottom line is that most small businesses cannot afford to take the chance that they have an accident or become liable for damage caused by their car that their personal auto policy carrier refuses to cover.  If there is a question in your mind about whether or not you need to purchase a commercial auto policy, the odds are that you do and you should contact your insurance agent as soon as possible.

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Liquor

Does your business need Liquor Liability Coverage? (Image via AjDele Photography on Flickr)

Liquor liability coverage is a unique type of insurance that is only needed when a business has some involvement with alcohol.  While it is extremely important that those businesses that need liquor liability coverage have it in place, many who need it don’t have it.  Some business owners forgo coverage because of the expense, but in many cases, businesses do not have coverage because they don’t know they need it, think it is already provided as part of another policy, or don’t understand the implications of not having it.

What is Liquor Liability Coverage?

This is a type of insurance purchased by businesses that offers protection from loss or damage resulting from the actions of a customer that is intoxicated.  It covers property damage and liability claims for injuries to others and for self-inflicted injuries by the drunken customer.  It can be sold as add-on coverage to a commercial general liability policy or as a separate policy all together.

One of the most common misconceptions that open business owners to huge losses is that they are not responsible for the actions of their customers including those who are intoxicated.  Unfortunately, this is not the case.  Another common misconception is that this type of liability is covered under a general liability policy.  Most business liability insurance policies specifically exclude any liability resulting from this kind of loss.

Who Needs It?

Any business that is involved in the manufacture, sale, or service of alcohol or who assists in the purchase or use of alcohol generally needs this kind of coverage.  If there is a possibility that a customer, client, or patron could become intoxicated using alcohol that a business made it possible for them to obtain, that business needs this kind of coverage.  Courts have ruled time and again that purveyors of alcohol can be held liable for the actions of their intoxicated customers which means the only way to protect the business is to have the right coverage.

What Does it Cover?

A Liquor Liability policy will generally offer the following types of coverage:

  • Liability – This coverage protects the business from losses resulting from a lawsuit filed by someone injured by the intoxicated customer.  A common example is a lawsuit resulting from a drunk driving accident.  This also covers lawsuits filed by the customer for injuries or damage they caused to themselves while they were intoxicated.
  • Property – This covers property damage caused by the intoxicated customer.
  • Assault and Battery – This covers your liability to injuries and damages caused by intoxicated patrons fighting.

What to Look for in a Policy?

When purchasing this type of coverage, make sure it includes the following:

  • Defense Costs – Make sure the policy you purchase doesn’t exclude this or decrease your limit to cover legal defense costs.
  • Employees – Make sure the policy does not exclude employees.
  • Mental Damages – Make sure that mental damages like mental anguish and stress are included in your policy.

Businesses that are involved in the creation, sale, and distribution of liquor and alcohol need to take steps to protect themselves from liability claims resulting from intoxicated patrons.  Purchasing a liquor liability policy is one of the best steps a business can take to secure this kind of protection.

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Employees

Good group benefits can help you land a great employee. (Image via Inkyhack on Flickr)

There are many factors that contribute to having a happy, productive workforce.  Human resources experts could give you a list a mile long of why things like company culture, employee appreciation, and providing meaningful work for a living wage would be near the top of that list of factors.  Group benefits, the ones that are optional, not the ones required by law, would also be up near the top of the list.  Group coverage often fulfills more than one need for your employees and can be a powerful way to express the company’s gratitude and appreciation for all the work employees do.  Providing these kinds of benefits can even be the thing that sets your company apart in the eyes of potential employees.

Here are 5 reasons small business owners should consider adding group benefits for their employees.

1.     Providing Peace of Mind

Two of the most common group benefits are life insurance and disability insurance, both of which protect the financial future of the employee and/or their family.  With these kinds of group benefits, employees can feel confident in their ability to support their family in trying times.

2.     Cost Control

The group nature of the benefits helps keep the costs down which means the company can offer things like health insurance or dental coverage because they are affordable.  It is also common practice to require that employees contribute toward the cost of many group benefits so that the costs are shared.  When you add in cost savings you may achieve by reducing turnover, benefits make good financial sense for most businesses.

3.     Tailored Solutions

Most insurance companies that provide this type of coverage will allow you to tailor the type of benefits you offer to meet the specific needs of your employees.  Additionally, there are other things, like subsidized gym memberships, which can be counted under the group benefits umbrella that are not related to or provided by an insurance company.

4.     Benefits Support

Many insurance programs offer support for their group benefits product lines that can provide real benefit to the business owner or manager.  When a group benefits package comes with this kind of support, it alleviates the need for HR staff or business owners to take time away from other things in order to answer questions.

5.     Recruiting and Employee Retention

One of the best reasons to offer group benefits is because benefits make employees happy and happy employees don’t leave for other opportunities.   The cost to the company of finding, hiring, and training a new person is likely much higher than the company’s contribution to the cost of benefits for that role.  If you are looking to attract the best and brightest people, you need to offer a work environment that doesn’t just compare with the completion, but surpasses it.  Group benefits can be the thing that turns your job offer into a candidate’s best offer.

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