Commercial Property Insurance That Is Overlooked and Considered Miscellaneous

There are some items on your commercial property checklist that is more miscellaneous in nature but still should be considered in your overall risk management thought process. Fixtures and furniture is one of those items as is mobile property.

Usually as a tenant in the building most tenants typically do some modifications of the fixtures or add their own custom built-ins to the building. Unless the fixtures are mobile in nature they typically are considered built-ins. At the end of the lease it is usually very difficult for the tenant to take the fixtures with them as it can cost more to disassemble them than to just leave it. The tenant improvements and betterments then become the property of the landlord. Most businesses tend to ensure their furniture but might not be aware of the inherent value of the fixtures and they might not be providing the appropriate coverages for the fixtures.

The premiums for contents are much higher than the premium for building coverage as a composite rate per thousand dollars of value. What that means for you as the client is that providing coverage for fixtures is very inexpensive as compared to the insurance premium for the contents portion as you can include the fixtures as part of the cheaper building premium. Fixtures and furniture's should go hand-in-hand with your commercial property checklist of miscellaneous coverages to be on the lookout for.

Mobile equipment is also another item to be cognizant of when insuring your property. Property that is mobile and transitory in nature can sometimes be elusive in your consideration for providing protection for these items. Usually for mobile and transitory contents you will need special coverages that are normally not provided in the typical commercial property insurance policy. Because the contents are mobile and transitory by nature there are unique perils and circumstances that are involved that are typically not present with fixed items that are in a building or warehouse.

Various entities can have access to this mobile property and there will be unique loss exposures but come into play that would require unique coverages in order to offer the protection that is needed. Items that are off premise can be used by the employer, the employees, clients, and a host of others that can put the property in a place of exposures to loss. Property that is in the care, custody and control of others opens up multiple liability issues by law and by contract. It is common to use what is called an inland marine policy to adequately cover these types of transitory contents. Your basic property insurance policy is not going to provide the breadth of coverage that is usually needed with regards to mobile commercial property.

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How to Match Your Insurance Policies to Your Potential for Damages

Most businesses purchase insurance policies without first considering what potential for damages they are facing. Matching insurance policies to your potential for damages is a better approach than just purchasing insurance policies.

Loss potential for damages can be better assessed by analyzing the components of the loss potential for claims or damages. You can usually classify these into 3 categories of: types of exposure, the types of causes of loss and finally the damages and results of a loss.

The first element is the type of exposure that we are dealing with. Normally a loss exposure can be damages to your employees, damages to your revenues, damages to your buildings and contents, and finally legal liability damages.

The types of damages or perils that the exposure is subject to can be quite lengthy. Some usual perils include such things as fire, theft, explosion, bodily injury, property damage, termination, death, illness, disability, embezzlement, fraud, employment practices, professional liability, to name a few. Finally the consequences of a loss need to be considered whether they are financial, reputation, or marketplace setbacks in market share.

There are some basic risk management techniques you can use in dealing with potential for damages to loss.

The first technique is that of avoiding or deleting the exposure to loss in its entirety. If you have a troublesome exposure, such as a location that is uninsurable, you can eliminate that exposure by selling or getting rid of the property. Another technique is to avoid the potential for a claim by never entering into problematic loss potential in the first place. While this is a 100% solution to eliminate your loss exposure it might not always be practicable or feasible based upon your business situation. Loss prevention is another strategy to help reduce damages. Using non-slip floor coverings, dead bolt locks, alarm systems, etc. can all help in preventing claims. Loss reduction by implementing such things as having smoke alarms, sprinklers in the building, etc. can all help reduce the potential for total loss of buildings or contents.

Loss potential for damages for any business need to be thoroughly analyzed before any purchase of insurance is contemplated. Doing your homework before you go out into the market place to buy insurance protection is more efficient and effective in the long run. Purchasing the wrong policy or not purchasing coverages that match your exposure to loss and leave huge gaps in coverage which can create enormous damages for your company.

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Getting Government Discounted Capital? Protect Your Investment With Business Insurance

It's well known among business analysts that it is the SME sector that really drives the economy, offering more jobs and eventually, becoming large enough to pay larger tax volumes for the government to hopefully reinvest in other economic initiatives.

To help the SME sector out and to hopefully fuel further growth, the government as backed a scheme to promote cheaper lending to SMEs. This is now known as the National Loan Guarantee Scheme; where the banks are encouraged to reduce the cost of their loans to smaller businesses in exchange for a government guarantee on the loan amount; often resulting in a decrease of 1% on standard bank lending rates.

The UK government has already fronted £5 billion for the scheme, with a view to offer a further £20 billion over the next two years. Whilst useful for giving SMEs the capital required to stay afloat in these turbulent times, or even to expand, a loan is still a business risk.

The result has been a surge in Business Insurance policy buying; where business owners are doing their best to protect their company and their investment. The problem here however is that many of these business owners have little expertise in choosing a business insurance policy; much of their time is dedicated to running their business, understanding the industry and dealing with day-to-day management, so their understanding of the business insurance industry and the kinds of cover available is likely to be limited.

As with any service that is outsourced, it is good to consult with an expert in the field who's working hours are dedicated to understanding and sourcing exactly what it is that you want. Whilst a business owner can wear many hats, they cannot be an expert in everything. So in the case of those businesses that manage to secure government backed capital, consulting with a specialist Business Insurance Broker would be a good way to ascertain precisely what cover the business needs, whilst identifying activities the business can undertake to further reduce their risks.

Unlike with off-the-shelf insurance policies, a Commercial Insurance Broker can tailor your insurance policy so that you only pay for the cover that you need. An off-the-shelf policy however may cover some of the bases to excess whilst wholly neglecting other parts that may be vital to your business. The problem is that you may not know what cover you truly need, until you need it; by which point it's too late if the policy you bought online can't help you.

So, if you want to manage your business risks effectively, get some outside help and speak to an experienced commercial insurance broker to find out how you can cover yourself and your business against catastrophe.

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What Are The Different Types Of Fleet Insurance?

Fleet insurance is basically a type of commercial insurance that gives coverage for all vehicles owned by a company. This way, the policy holder can have the same coverage for all the vehicles, or if they choose to, they can customize coverage based on specific needs. The vehicles covered do not necessarily have to be the same in make and model in order to be insured.

The coverage policy of fleet insurance will depend on your particular business needs.

Comprehensive and basic liability insurance is the most that you can get out of any insurance offers. This insurance is inclusive of repairs and medical expenses demanded when an incident involving any of your vehicle and driver occurs. Sometimes, insurance companies will offer coverage that temporarily replaces a vehicle when one of your own cannot be used. This type of policy will obviously cost more, but nonetheless, the offer is very well worth it.

In liability coverage, the coverage only includes the other party in an accident. If an accident is found to be at the fault of your driver, insurance covers the other party's medical needs for injuries and repairs on the vehicle only. Your driver and your car will have no coverage. This is a much cheaper option for those who own the vehicle with completed payments and paperwork. However, for those who have vehicle that are still being loaned, the lender will usually require the comprehensive type of insurance.

No matter what type of coverage your vehicle gets, it is important to purchase a roadside assistance policy. This is useful in the event of accident or vehicle breakdown in the middle of the road. The service includes mechanical help and towing when needed.

Driver Requirements

Fleet insurance companies will only provide coverage when an individual with proper license is driving the vehicle. Aside form a standard driver's license, a commercial driver's license is also required. To further keep your insurance cost down, let your drivers attend driving seminars and drivers education classes. The insurance company will look into this and can see your drivers as low-risk individuals in terms of insurance claims.

Keeping Costs Low

There are many things you can do to get a discount. Aside from the previously mentioned driver education classes, you can hire drivers who have more experience in this type of job. Young, inexperienced drivers are usually seen by the insurance company to be high-risk.

You can also safeguard your car by installing an anti-theft device. It is not an alarm system, but rather it uses a coded key that allows the vehicle to shut down when the wrong key is used. Having this type of protection for your car is another way to cut down vehicle costs.

The most common discount you can avail is the multi-car discount. This is offered by insurance companies to businesses who want to insure a large number of vehicles.

The vehicle's size and the type of activities it performs are factors that influence the cost of the policy. Ask a licensed insurance agent how to get further discounts to cut your costs.

Fleet insurance is an important part of owning company cars. Covering all your vehicles will save you a considerable amount of time and money.

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Important Considerations While Choosing Business Insurance

Business insurance is a comprehensive package of individual insurance policies intended to safeguard the property, people, and operations of a business from unforeseen losses or damages. Business insurance is not static for every business and hence the policies included are subjected to change based on the size, type and the risks involved in the business. Hence, every business owner needs to look at different aspects of the business before taking insurance.

This article gives a basic idea on what all a business owner needs to consider while insuring his business, which aids in choosing a better policy that perfectly covers major risks associated with his business.

Policies that are required by state laws: To protect the rights of the employee/employer/public many state governments have made some mandatory business insurance policies for different businesses. So, while looking for business insurance, the buyer has to start with the policies that are required as per his state's statute. For instance in UK, policies such as employers' liability insurance, motor vehicle insurance, professional indemnity, etc., are mandatory. However, the laws may vary based on the state and the business type. So, business owner needs to check the state laws and the policies which are applicable to his business before taking the policy.

Protection of the business property: After considering the compelled policies, the buyer now needs to look at the possible risks/dangers/hazards/accidents that might cause significant harm to his business property. Building, vehicles, goods, stock, machinery and all other office equipment are different things which enable the business to perform various operations. Any damage to them not only causes significant financial loss, but also results in business interruption. Hence, they should be insured properly. Insuring the property which is vulnerable to risks that are specific to business type is very important.

Liability claims: The present society is highly litigation prone - if any injury happens to a person due to the negligence of the other party, the first phone call goes to a lawyer, instead of a doctor. So, any case filed against the business either by the public or the employee claiming for the compensation for the damage creates additional burden and also affects the reputation of the firm. Hence, in order to avoid such cases, including liability policies like public liability, workers' compensation, auto liability may help the business to survive.

Personal risk coverage: While assuring protection to the business operations, public and employees, it is also necessary for business owner/partner/director to take personal protection cover. An executive coverage which protects the directors and the officers from any personal litigation or any other harm caused while managing the business should also be considered as a part of business insurance policy.

Now that we are clear on what are all the major aspects we need to consider while taking business insurance, the next step would be to approach a company which can suggest a best possible policy that extends its cover to all the major risks that might affect your business.

Instead of directly approaching an insurance company, it is advised to approach a reputed insurance broker as he may help you in assessing the risks and assist you in choosing the amount of cover required, besides directing you to the best insurance company.

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Insurance Terms and Phrases

Many insurance terms and phrases are unique to the insurance industry. There are a myriad of definitions within insurance policy defining what the words and terms mean within insurance policy. Terms and words that are not defined within the contract usually take on their ordinary meaning within society. That means the everyday common language; it's ordinary and culturally relevant meaning. Any phrases or terms that are of a technical nature would be defined within that industry, such as technology, legal, or the medical field. Sometimes words have been defined within the community, court cases, and common law. Some words have even been established by law. Insurance carriers that are regional in nature tend to have regional nomenclature within their definitions terms and words in order to be culturally relevant to their geographical areas that they're providing coverage for.

Most of the terms and verbiage within insurance policies throughout the nation is usually designed by the nonprofit company called Insurance Services Office. That way we do not have 2,000 different insurance companies defining the same word for accident. Most of the insurance companies subscribe to the Insurance Services Office in order to obtain their forms and contracts and definitions of insurance terminology.

The most important definition within the insurance contract is what is called the insuring agreement. Usually this is a broad statement whereby the insurance company agrees to pay claims for the insured and the insured agrees to pay the premium when due. There can be multiple insuring agreements within the contract if there are multiple coverages within the policy that are being purchased. Typically the insuring agreement clause states that the insurable pays the premium and insurance company pays claims based upon the coverages they have purchased. If it is a workers compensation policy, then you would have to go to that particular states insurance codes and regulations which could be hundreds of pages long to see what kind coverages are being provided by law.

Over the past 25+ years changes to the most common terms of all risk and comprehensive coverage have been redefined primarily based upon case law. Since technically it is really an oxymoron to say that a policy is all risk because there are always exclusions and limitations. There is never has been a policy that covers everything. Usually in today's insurance policies the three basic terms that are used to defined property coverages are basic, broad, and special. We will define these terms in a later article.

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Tech Talk - Learn the Lingo of Technology Insurance

Every company should have some form of Technology Insurance as a part of their risk management strategy. Even companies that need comprehensive Technology insurance coverage are not limited to those dealing specifically with the design, manufacturing, or serving of business or consumer technology. Practically every business employs technology on some level, and thus is susceptible to "Cyber Risk". It is important to note that "Cyber Risk" is not covered under your General Liability Insurance Coverage. (G.L.I. is for bodily injury or property damage to others.) Since much of technology involves "intangibles" like data, designs, etc. you need Professional Liability Coverage to cover these risks. Technology Insurance is basically Professional Liability Insurance that is customized for Technology companies. In order to get a better idea of how cyber risk can affect your business refer to the common technology insurance terms below.

Because of the rapidly changing field of technology and technology itself, insurance terms and definitions may vary from carrier to carrier. Always consult a knowledgeable technology insurance agent before purchasing any technology insurance coverages.

GENERAL TERMS:

Cyber Risk - Umbrella term for various instances of possible loss faced by any company utilizing technology.

Cyber Liability Coverage - coverage for liability and expenses to your company because of a cyber risk loss

Electronic Data Processing Property Coverage - blanket term usually referring to electronic data, edp equipment, mobile communication property, and communication property. ​ It is very important to have this coverage and to be clear about what this coverage does and does not mean to your individual carrier.

Intellectual Property Coverage - coverage for intellectual property or patent infringements including trademark, copyright, or patent violations. This coverage is usually available in two parts, one part in the case where you are responsible for intellectual property infringement and one part in the case where someone has violated your own intellectual property rights.

Common Types of Losses as a Result of Cyber Risk

Errors & Omissions - Umbrella term for any loss caused by an error or omission on the part of your company.

Data Breach / Data Loss Unfulfilled Contract or Warranty

Data Breach / Data Loss - Loss or corruption of company or client data. This includes, but is not limited to:

Stolen/misplaced hardware (laptop or flash drive) Malicious software (intentionally/unintentionally introduced to company's or client's system) Software Glitch (malfunction causes loss or misplacement of data)

Personal Injury (Digital) - Defamation caused to an individual or company through digital media including:

Company Website E-mail Social Media This is just the tip of the iceberg. When you're looking to keep your business & technology secure, make sure to speak to an insurance agent who specializes in Technology Insurance! Policy Declaration Page Address   Tradesman Tools And Equipment Risks And Insurance Cover   Carpet Cleaner Business Insurance   A Basic Overview Of A Builders Risk Policy   

Commercial Insurance Helps Pay For The Catastrophe Clean Up

Commercial insurance policies provide cover for buildings and property against all kinds of perils, but it is important to consider what it would cost to get your buildings reinstated following a total loss catastrophe such as a fire or major flood, and to ensure that your business insurance policy contains provisions to cover all the costs of reinstatement expenses.

If you under-estimate the total rebuilding costs of your commercial premises when initially applying for cover, then following any future claim, any payouts agreed will be subject to reductions by what is called 'average'.

Average will reduce the claim payout proportionally by the amount of under-insurance of the declared value from the actual current rebuilding costs. For example if your premises costs 150,000 to rebuild and you have declared the sum insured at 120,000, your claim will be reduced by a fifth.

If allowances are not made for all the costs of rebuilding, including those that may not at first be apparent, when applying for a commercial property insurance quote, then it is more than likely that the premises will be under-insured.

Commercial buildings cover may or may not include cover for fees for architects, surveyors or consultant engineers that may be required before rebuilding work can be commenced. These will usually work alongside any loss adjusters appointed by the insurer to minimise costs and agree any rebuilding proposals. Insurance companies will not pay rates for fees above those set by the governing professional trade bodies.

It is important to establish whether professional fees are included in the policy cover and if not, add an amount to cover these to the declared sum insured. When doing so be aware that these professions usually charge a very high hourly rate, and inflation should be allowed for.

Another area that can often cause disagreement between an insured and an insurance company following total loss of the premises, is that of debris removal and clearance of the site in preparation to rebuild.

Most commercial policies will include a section outlining the insurance companies responsibility as regards the insured premises site clearance and debris removal. This typically includes cover for dismantling and demolishing buildings, shoring and propping up dangerous or adjacent buildings and site clearance. More often than not the amount for this is included in the sum insured, in which case this should be calculated and also added in to the rebuilding cost at proposal.

Debris clearance can be extremely expensive, especially if for example hazardous building materials such as asbestos have to be removed, or if the site was storing chemicals or dangerous machinery that have to be treated and removed by specialist clean-up teams.

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Buy a Business Car That Will Lower Your Insurance Costs

The cost of your business vehicle insurance premiums depends on several factors, some of which you have no control over. There are some simple ways to save money when it comes time to buying insurance for your business vehicle. One of these is to choose a car, new or used, that will not be expensive to deliver. These tips will help you determine what type of car/van/truck you should buy to reduce your insurance premiums. Sounds dumb, but think about it. The vehicle merchant will have to charge delivery based on what they are paying for insurance, so if the delivery is high, then you can assume that insurance will also be high.

The first two of the factors that influence the cost of business vehicle insurance are the risks of accidents and theft. If your vehicle is more likely to be involved in an accident and cause damage to others, yourself or your staff in a collision, the more your insurance company will increase the cost of your insurance. Following this logic, sports cars and all high performance vehicles, built for speed, will be more expensive to insure, so unless your business involves impressing clients with fast cars then give it a miss. It's the same for some very small cars, which will not protect the owner in case of crash (except for smart cars). It is best to avoid these types of vehicles.

You must also consider the fact that some business vehicles are more popular with thieves than others. White vans are often a target for thief's to steal or more likely to break into. Check your country records, for the most stolen vehicles records, and then give that vehicle a miss. The vehicles most at risk of being stolen will inevitably cost more in business car/van/truck insurance costs.

Consider an immobilizer as this is an effective way to prevent theft of your company vehicles, just like alarms and steering wheel locking devices. Some models are already equipped with such systems. If the vehicle you choose does not have one, you can pay extra to have them installed. This purchase will be a very good long term investment, since you will save by reducing your insurance premiums.

A lot of business vehicles are also having "tracker" integrated into their machines. These help police locate your vehicles when stolen. This will help bring down your business vehicle insurance costs. You may also have cameras installed that record footage around accidents to help determine costs. This has lowered American insurance costs considerably, as it allows the insurance firms to more easily determine who is to blame for accidents.

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Uninsured Plant Thefts Can Cost Twice the Original Price Tag

As smaller plant items are designed to be easily transported or carried by hand, it makes them much easier to steal and so strimmers, mini-diggers and other portable pieces tend to make up the bulk of plant insurance claims in the UK.

The extent of the problem is widely disputed, but many agree that it is commonplace. According to statistics published by IMIA, plant theft costs contractors and insurers around £1.5 million every week.

Of course the best way to prevent such thefts is to secure compounds and storage facilities to put off opportunists; but construction sites can be huge and contractors often find themselves working with staff from other companies who have been contracted in to fulfill other parts of the project. Managing site security then, can become difficult and with so many unknown persons on-site, the risk of inside jobs occurring can be much greater.

This then presents other problems. Many contractors hire their plant for specific tasks, and so in the event of theft it is down to the contractor to replace the equipment as well as paying every day for the hire of their stolen vehicle until the replacement is delivered to hire company. This in itself is expensive, but this can also cause deadlines to be missed which in turn can push project timelines back; in some agreements this can incur fines for the contractor, or result in them being paid a discounted rate for the inconvenience.

When additional costs of hire, replacement, staffing and contractual fines are taken in to account, uninsured plant theft often costs double the price originally paid for the equipment in the first place.

Luckily, where security prevention measures fail, contractors who manage their business risks can make a claim against their Hired Plant Insurance policy. With tailored wording, a contractor may be able to recoup the costs associated with plant theft in addition to the costs of the stolen goods. In the event of a successful claim, an insurer may be able to provide temporary resources so that the contractor in question can make amends quickly, so that the disruption to the project is minimal.

Due to the speed with which Commercial Insurance Brokers and Insurance Companies can react, in some cases a contractor may already be using a replacement by the time the authorities have found the missing items.

It is therefore vital that contractors asses their risks and manage them appropriately to minimize business interruption.

There are a number of qualified Commercial Insurance Brokers who can help; by auditing your business activity and advising you on how to improve your security procedures, whilst also advising you on the level of cover most appropriate to you.

As the daylight hours increase in summer, the number of outdoor thefts increases dramatically; so if you feel that your plant and equipment is at risk, speak to a Commercial Insurance Broker about your options.

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Errors and Omissions Liability Types

E & O insurance, Errors & Omissions insurance, Malpractice insurance, Technology insurance, are all types of professional liability policies. Professional liability policies come into play when any business is providing professional services that are beyond and above the norm for a particular industry or business practice. Providing technical or unique functions that require a license, special training or membership within a profession usually describes professional services versus normal services. Nowadays there's a blurred line for what is professional services as many industries have a consulting, advisory component to their products and services.

All negligent claims in United States require that four basic elements be met before there is a legitimate negligent claim. That doesn't mean that somebody can't sue and bring a lawsuit but in order to prevail in their claim all four elements must usually be met in a court of law.

The first element is that there must be some sort of legal duty that is owed to a person or entity. Secondly, there must be a breach of that duty that was owed. Thirdly, there must be some sort of injury or damage that is suffered by the person or entity that was owed the duty. Finally, there must be causality that the breach of the duty was the proximate cause of the damage or injury.

If there is no legal duty that is owed then there is no negligence claim by law and the case is usually dismissed. If somebody says that they promised to do something and that type of promise by law is required to be in writing and it is not then there is no legal duty that is owed. Another example would be if somebody promises to do a transaction that is illegal by its nature that is not a legal duty that is owed.

If there is no breach of that duty, legal duty, then there is no negligent claim. If the contract is not finished or the terms have not been completed there is a possibly of a breach. 

The third element, if there has been a legal duty that is owed and there has been a breach of that duty but if there is no injury or damage the chances are the negligent claim will not succeed in court. 

Finally that has to be causality, a connection. The breach of the duty has to be the approximate cause of the damage or injury or again there is no negligent claim. Professional liability protects the insured from claims and losses that are alleged due to an error or omission of professional services. Typically we think of doctors and physicians, accountants, engineers, and attorneys as needing professional liability insurance. Real estate agents, insurance agents, title insurance agents, inspectors, real estate property appraisers, construction management companies, professional property managers, etc. can all have professional liability exposures. 

The general liability policy excludes professional services for almost all types of businesses. Businesses that offer professional services as part of their marketing strategy needs to include professional liability coverage as part of their insurance portfolio. Not all professional liability policies and insurance carriers are the same. It is important to seek out a professional liability policy that is tailor-made to your specific industry. A doctor's malpractice policy is not going to suffice for a structural engineer and the exposures that he or she has. Including professional liability coverage should be a part of your risk management strategies for almost all service industries.

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Automobile Liability and Risk Control

It is usually very hard to avoid the risk of auto liability exposure. You can sometimes outsource this exposure by having other companies do your deliveries on your behalf. Even with that strategy, attorneys can sometimes connect you to your delivery system. So if the delivery system is faulty, it might come back to haunt you. So whether you are providing internally for your deliveries or if you have outsourced it to a third-party, you still need to apply sound automobile risk control principles to limit your exposures to loss.

One of the first steps has to do with the drivers. Driver selection is the primary key to reducing your overall liability exposure. Making sure that you only select drivers that meet the carrier's minimum underwriting requirements will help ensure better success controlling your claims and losses. Checking motor vehicle reports and past claim history of the drivers is an important part of the underwriting. It is important that you train the drivers to make sure that the operations they perform are well within the insurance company's guidelines and your company's guidelines for performance. Training your drivers will only be successful if you have proper supervision of your drivers.

Next on the list of risk control has to do with the vehicles. Selecting your vehicles should be at the top of the list when it comes to risk control for auto liability. Selecting poor quality vehicles or vehicles that are not appropriate for your type of business can lead to unnecessary auto liability claims and losses. Once you've selected the appropriate vehicles for your company, you must have in place a routine and comprehensive inspection and maintenance program for all vehicles.

The last and final step has to do with the routing and scheduling of your vehicles. The times of day that your vehicles are on the road and the length of time your vehicles are on the road during any one delivery can have substantial impacts on the maintenance of your vehicles. This can also but undue stress on your drivers. The logistics of the delivery times and the delivery process of your goods and services can go a long way in making happy clients and happy employees. Unrealistic time restraints and demands upon your drivers and vehicles will in the long run cost you more. The risk management tip of the day is to apply risk controls for your auto liability with a risk control system for drivers, vehicles, and logistics.

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Commercial Insurance - What Is the Purpose of the Coinsurance Clause?

Commercial Insurance has a standard Coinsurance Clause all property insurance policies in the United States. The carriers require in the property insurance policy contract verbiage that when you choose coverage limits and dollar amounts that they be accurate. While there are a few exceptions the general rule of thumb is that you must insure your property to value. Although you can opt not to insure to value, you will be subject to coinsurance penalties if you choose to do so. The reason that the carriers require you to insurance to value is that the entire math (the rate promulgations) is based upon insuring to value. Failure to do so can create adverse underwriting losses for the insurance carrier.

The simple definition of coinsurance is that you need to insure to a specific value as determined in your insurance contract. Normally this amount is 80% to valuable before a penalty ensues. The coinsurance clauses deal with property insurance and not liability insurance. You can pick almost whatever amount you want for liability insurance with regards to limits. It is the property insurance whereby there are more requirements and limitations.

The simple formula for determining the coinsurance penalty is to take the amount that you did insure the property for divided by the amount you should have insured the property for times your loss. If there is a deductible on the policy than the deductible also needs to be considered within the formula. Most property insurance policies have an 80% insurance value clause for buildings and contents.

As an example, if you had a building that is worth $100,000 to replace it and you have an 80% coinsurance clause you need to insure your building for at least $80,000 or more. In our example let's assume that you had a $10,000 building fire loss. Let us also assume that you insured the building for $40,000. So if we take what you did insure the building for, $40,000, and divide that by what you should have ensured the building four, $80,000, that will equal 50% times the loss of $10,000. So if you have a $10,000 fire claim on your building you would be paid $5,000 minus your deductible. Because you did not insurance value you are a co-insurer of the loss alongside the insurance company.

There are some policies that do not have the coinsurance clause provision. Most of the time they tend to be more expensive policies. It is important to know that why you contractually can choose almost any general liability limits that you want without penalty, you normally cannot choose any property amount unless you insure to value without suffering a coinsurance penalty. The coinsurance clause is normally not very well described on the declarations page and if you do not know what you're looking for it can be easily missed.

If you're looking to save money on your premiums make sure you have the proper values. This means to get as close to hundred percent of the replacement value as possible. Usually this results in lower premium rate per-hundred dollars of value on the property policy. The key for you as the insured is to know the difference between choosing a general liability limit versus choosing a property limit. The property insurance limit has ramifications if you do not insure to value.

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Maximize Business Coverage By Finding The Right Provider

Having the right coverage for a business is about more than simply finding the cheapest rate available. The policy must be robust enough to protect the company fully but not so expansive as to be wasteful. Additionally, the policy must be with the right provider. The most common mistake small businesses make is that they choose a provider that isn't a proper fit for them.

Assess Your Needs

In order to find the right provider, the first step is to perform a thorough assessment of the business now along with a near-future projection. This may require the involvement of a specialist, and there are third-party experts available that can do this type of work without it being a conflict of interest. Once a business has a thorough and accurate self-assessment, it can set out to find a provider that matches those needs.

Research the Providers

After collecting a series of quotes, the next step is to research the providers. This is a paring down process, and the business should treat it as such. In other words, if a company has a dozen attractive options, the company should accomplish it in three or more increasingly intensive phases. The company should not go all out researching all twelve providers because it will be a waste of resources.

Check the Provider

At this stage, the short list should be reduced to three options or so. More is an indication that the business has not been particular enough, and less can hamper the process moving forward. Checking is the process of verifying a business' status and history with consumer organizations and other clients. Past and existing clients are a tremendous resource that should not be overlooked. Especially in the business world, satisfied and dissatisfied clients alike are eager to talk about their experiences.

Interview the Provider

The final step before choosing is to interview the providers. If the business has whittled the list down to one option, that's all right as long as the decision-maker doesn't feel pressured to choose that option. The interview process is an opportunity to ensure that these two companies are a solid fit, and it should be in-depth. If a business performs multiple interviews, then the interviews should follow a similar structure and use the same questions. This will come in handy for comparison later.

Questions that Need Answers

Before saying yes, there are a series of questions that the business must be able to answer satisfactorily with confidence: Is the provider trustworthy? Does the quote match the budget? Is there are rate guarantee going forward? Is the company too large or too small? Can the provider grow with the business? Does the provider have a comprehensive plan to protect the business?

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