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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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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Business Insurance

Is your business adequately insured? Image via cancocom on Flickr

According to the Small Business Association (SBA), small home based businesses make up more than half of all businesses in the U.S.  These types of businesses are more likely to have the wrong insurance coverage for their needs.  If you are a home-based entrepreneur, here are 6 mistakes you can’t afford to make with your business insurance.

1.     Not Having Insurance Specific for the Business
One of the most common mistakes home-based business owners make with their insurance is making the assumption that their personal insurance policies cover their business.  This is almost never true.  In fact, most homeowner’s and umbrella policies specifically exclude business activities and business property.  This means that if there is a fire in your home, your homeowner’s policy will not pay to replace the computers, equipment, and supplies belonging to your business.

2.     Not Believing that the Company Can Be Sued
It doesn’t matter if you are just starting out, don’t have any real assets, or whatever other reason you are telling yourself, if you own a business, that business can be sued.  In addition, it may be possible for you to be sued personally as well.  If you have a judgment against you, the court can seize your assets, bank accounts can be frozen, and future earnings can be garnished.

3.     Not Planning for Bad Things to Happen to Them
Another big mistake home-based business owners make is not protecting their business in the event something happens to them.  Many small business owners forego disability insurance for both the short and long term without realizing that their odds of being disabled at some point, even temporarily, are much greater than the odds of them dying.  Most home-based businesses could not withstand the loss of their entire workforce, even for a few weeks.  Most small business owners would find it difficult to pay their bills and take care of their families if a disability made it impossible for them to work in the business.

4.     Not Having the Right Insurance
Small business owners are often strapped for cash and strapped for time.  This can lead to bad decision making in the area of insurance.  Business owners cannot rush through the process of identifying their insurance needs without running the risk of buying the wrong policies and being over insured in some areas and underinsured in others.

5.     Not Verifying that All Insured, Entities, and Locations are Listed on Policy Documents
Regardless of the way you have structured your business, you need to make sure that all entities, companies, LLCs, etc. are listed on your insurance policies.  The same goes for all locations that are covered by business property and commercial general liability policies.  In order to ensure they are covered, they must be listed on the policy.

6.     Not Purchasing an Umbrella Liability Policy
Business owners, just like individuals, need umbrella coverage in order to protect themselves and their business from catastrophic circumstances.  Umbrella coverage kicks in after your standard policies hit their limits and hopefully, you will never need it.  However, this is the kind of coverage that if you need it and don’t have it, it can end your business and impact you financially for the rest of your life.
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Worker's Compensation

Is your small business properly insured? Image via Flickr

For small business employers, understanding the ins and outs of Workers Compensation coverage and the accompanying legal requirements can be overwhelming.  Here are some of the most common questions asked by employers about Arizona Workers Compensation Insurance.

1.     How does Workers Compensation insurance help my employees?

This type of coverage protects employees who are injured on the job and ensures they will receive compensation for lost wages, payment of related medical expenses, and in some cases, monetary awards for disability and damages.  It is no fault insurance, which means payments are made regardless of who was responsible for causing the accident, injury, or illness.   Workers Compensation insurance also provides death benefits for the survivors of an employee who is killed on the job.

2.     What does Workers Compensation insurance do for me as a business owner?

While the primary intent of Workers Compensation coverage is to protect employees, it also offers some protection for companies and business owners.  If an employee is injured on the job, everything to do with that injury is handled under the Workers Compensation policy.  This means there is no need for litigation between the employee and the company and businesses don’t have to worry about or plan for the potential of huge legal fees associated with litigation.

3.     Who is required to carry Workers Compensation insurance in Arizona?

According to the Industrial Commission of Arizona, the agency responsible for the administration and enforcement of any state law that pertains to the health and safety of employees, all employers in the state are required to secure Workers Compensation coverage for their employees under Arizona Law.  The details of the law and how it is administered and enforced can be found in Article 18, Section 8 of theArizona State Constitution, Chapter 6 of Title 23 of the Arizona Revised Statutes, and the Workers’ Compensation Practice and Procedurerules outlined in the Arizona Administrative Code.

4.     If I am the only person who works for my company, do I need Workers Compensation coverage?

Sole proprietors are not required to carry Workers Compensation coverage for themselves.  However, it may not be a bad idea to cover yourself if you have an occupation that is inherently dangerous or carries a higher than normal probability of injury.

5.     What happens if I don’t have Workers Compensation coverage and an employee is injured on the job?

If one of your employees is injured on the job and you do not have the required Workers Compensation coverage, what happens next is up to the employee.  The employee can file a claim with the Industrial Commission of Arizona (ICA).  If the claim is accepted by the ICA, the state will process the claim and pay for the medical expenses and lost wages that would normally have been covered by the Workers Compensation insurance policy.  The state will then charge your company the full amount of benefits paid out to the employee plus a penalty that is equal to 10% of the amount paid out or $1,000, whichever is greater.  The other option is a civil suit.  Because you don’t have the protections provided by a Workers Compensation policy, the employee can choose to file a civil suit against the company to recover damages.  The employee’s injury is the only requirement in this type of filing to prove the negligence of the employer.

6.     Are there any penalties for not having Workers Compensation insurance if none of my employees ever file a claim with the state?

According to the ICA, the state can fine your company the same $1,000 penalty for failing to carry the required coverage regardless of whether or not a claim is filed.  If your company is found not to have insurance again within the same 5 year timeframe, the fine increases to $5,000 for the second finding and $10,000 for the third.

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Small Business

Is your small business adequately insured? image via aboutTime on Flickr

One of the unfortunate realities of our world is that the threat of a lawsuit is around every corner and inherent with every employee you hire, customer you serve, or client you sign.  No matter how small your business is, what products you sell, or services you offer, there is some part of your business that is leaving you exposed to a lawsuit that could bankrupt both you and the company.

Here are 7 reasons every business needs to protect itself with the proper types of insurance.

1.     It Only Takes One

It only takes one accident, one broken contract, or one disgruntled worker to put your entire business at risk.  If your company is sued fornegligence, even winning can easily put you out of business because of the amount of money it will cost to mount your defense.

2.    Things Happen

If you own property where customers come to do business, you are open to a personal injury liability claim every minute of every day.  People fall and accidents happen but if they happen on your business premises and you don’t have insurance, you will have to pay for medical bills, lost wages, pain and suffering, and other expenses out of your own pocket.

3.   Your Corporate Shield May be Flimsier Than You Think

Many small business owners believe they have protected their personal assets from any business liability claims or judgments by using a “corporate shield”.  However, there are circumstances where that protection doesn’t stand up in court and without business insurance, you could literally lose everything you own.

4.     Exclusions Apply

If you have a general liability policy, any employment liability claims may be excluded from that policy.  If you have a commercial liability policy, property loss may be excluded.  If you are a home-based business owner with homeowner’s insurance, it is unlikely that your business assets are covered under that policy.

5.   Losses are Often Out of Your Control

If you walked in tomorrow to find your office had been robbed and every computer was gone, would you be able to replace them today and get back to business?  Losses from theft, natural disaster, and other accidents could bankrupt your business if you don’t have insurance to help replace what is lost.

6.     Accidents Happen

You may be thinking that your auto insurance policy that covers your personal auto will cover you if you are driving your car on company business.  This may or may not be true. If it isn’t true and you are in an accident where you’re at fault, you could find yourself paying for someone else’s pain and suffering out of your own pocket for the rest of your life.

7.   Other People’s Insurance Isn’t Enough

Let’s pretend you have a storefront on Main Street in your town and another person causes an accident which ends with a car coming through the front window and destroying your merchandise.  Their auto policy, if they have one, might cover the damage to the shop and for replacement products, but it may not cover or have enough coverage to compensate you for the income you lost in the four months the shop had to be closed for repairs.

Don’t wait until something happens or procrastinate at least doing something while you figure out whether or not you can afford to purchase the insurance your business needs.  The question you need to focus on is how can you afford not to insure your business.
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Business Insurance

Is your business properly insured?

Whether you are a new business owner just starting out or an established entrepreneur looking to hire your first employee, it is important to understand what insurance coverage you need to protect your business.  However, wading through the all the available information to decide what policies and coverages are right for you can easily end with you being over or under insured.

Insurance for businesses comes in many different forms. What you need often depends on several factors including what type of business you are in, whether or not you have employees, and what state you live in.  Many business owners believe that the way the structured their business, as a corporation or LLC, provides them with the protection they need and eliminates the need for business insurance.  This simply isn’t true.  Company structure can protect your personal assets but they do not provide protection for the business itself.

The first step in deciding what kind of insurance you need for your business is to understand the different types of business insurance and the protection each kind offers.  According to the Small Business Association, these are the different kinds of insurance small business owners may need to fully protect their business.

1.    General Liability Insurance

This type of coverage offers broad protection against most legal actions resulting from negligence claims, accidents, or injuries.

2.     Product Liability Insurance

This type of coverage is important for businesses that manufacture, distribute, or sell products including both wholesale and retail sales.  It protects against legal actions resulting from injuries caused by product defect.

3.     Professional Liability Insurance

Similar to product liability insurance, this type of coverage protects businesses that provide services to customers.  It covers things like malpractice, errors and omissions, and negligence that results in harm to your client.  Depending on your profession, the state you live in may require that you carry this kind of insurance.

4.     Commercial Property Insurance

This kind of coverage protects the property and assets that belong to the company against loss or theft.  While it covers real property like buildings and office equipment, it may also cover things like loss of income and business interruption.

5.     Home Based Business Insurance

This type of coverage is specific to businesses run out of your home which are not covered by most homeowner’s policies.  You may be able to cover your home-based business with a few riders on your homeowner’s policy but you may have to purchase other business specific policies as well.

6.     Workers Compensation Insurance

This kind of coverage provides protection for your employees in the event they are injured on the job.  If you have employees, all states require that you carry this kind of coverage.

7.     Unemployment Insurance

This type of coverage is assessed in the form of a tax and is required by all states if you have employees.  It provides funds for the payment of unemployment benefits in the event one of your employees is let go and qualifies for benefits.

8.    Disability Insurance

This type of coverage provides employees with a portion of their pay if they suffer a qualified disability.  It is required for companies with employees in some states.

Now that you understand what each kind of coverage protects, you need to assess the businesses’ potential exposure for loss.  This exposure will help guide the types and amounts of coverage you need to safeguard your business.

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