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Insurance

What SMBs Need to Know About the NFIP

June 13, 2019


  • Congress created the National Flood Insurance Program in 1968.
  • The NFIP helps provide federally backed insurance to individuals and businesses through third-party insurance agents.
  • Determining the cost of a flood insurance policy requires a conversation with an insurance agent and careful analysis of your geographic location and building structure.
  • Small businesses close at an alarming rate following natural disasters, so your business should have an insurance policy even if its flood risk is minimal.

According to the Federal Emergency Management Agency (FEMA), more than 20% of flood claims come from properties outside high-risk flood zones. Regardless of where your business is located, there’s likely a risk of flooding.

Recent events in the southern U.S. show just how devastating flooding can be. The most recent 12-month output of average precipitation in the contiguous U.S. reached a 125-year high, and more flooding is expected across the U.S. as we enter the summer months and approach hurricane season.

Disaster preparedness is often overlooked by small businesses, but preparing for disaster and having an emergency plan can keep your business alive in the event of a natural disaster. According to FloodSmart.gov, a website run by FEMA, 40% of small businesses fail to reopen after a natural disaster, and the Small Business Administration says that more than 90% of business fail within two years of a natural disaster. No one likes to assume they’ll be hit by a natural disaster, but your business needs to prepare for the worst.

When it comes to flooding, there are a few options for insuring your property. To understand how to best cover your business from flooding damages, it’s important to learn about the National Flood Insurance Program. We spoke with a couple experts and researched the program to better understand what small businesses need to know about the …

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Business Insurance: How to Safeguard Your Livelihood

June 12, 2019


These business owners say they can’t afford the coverage they need. If you’re among those who have no insurance or are underinsured, you’re playing Russian roulette with your assets, because not having insurance can cost much more than the annual premiums if adversity strikes.

Whether you have some insurance or no insurance, it’s time to talk with a trusted insurance broker about your current business needs. They may be able to design a plan you can afford. Of course, your needs depend on the type of business you run. However, for general-purpose insurance, we talked with James Nevers, CFP and senior advisor at Soundmark Wealth Management, to find out what the different types of business insurance are and what they can do to cast a safety net around your business.

Home-based businesses

You may think you’re protected against claims with your personal home and auto policies. Nevers said this is a common misconception. According to the Insurance Information Institute, most homeowners policies specifically exclude business liabilities. The same holds true for your personal auto coverage.

Your business and personal life must be separate, Nevers said. “If a customer visits your home office and slips and falls on your driveway, your personal homeowners might not pay the claim. If you use your car for work and while you’re driving to a supplier’s warehouse to pick up parts, you get into an accident, your personal auto policy might not cover you either. It’s best practice to have separate business, auto, property and liability policies as well as your personal home and auto coverages.”

Coverage essential for all businesses

Whether you sell goods or services, consider investing in the following types of insurance to shield your enterprise from disaster:

  • Professional liability, also known as errors and omissions, protects
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6 Things You Need to Know About Workers' Compensation Insurance

June 5, 2019


Workers’ compensation, or workers’ comp, is an insurance program that provides benefits to workers who were injured or became ill on the job to make up for medical costs and lost wages while they were out of work.

Workers’ comp insurance generally covers injury or loss of limb, illness caused by the job environment (like emphysema), repetitive motion injuries, permanent impairment, medical treatment, rehabilitation, lost wages, death, and liability insurance. Workers’ comp will provide coverage regardless of who is at fault – the employee, the employer, co-workers or even customers.

While it might seem like just another business expense, workers’ compensation insurance can actually protect you from litigation should an employee become injured or sick as a result of the job.

“Workers’ compensation insurance exists primarily to protect the employer,” said Chane Steiner, CEO of Crediful. “It is much better to pay for insurance to protect your business in case you are hit with a major claim and don’t have the funds to pay it directly.”

 

Editor’s note: Looking for workers’ compensation insurance for your business? Fill out the below questionnaire to have our vendor partners contact you with free information.

 

 

Except for Texas, every state legally requires companies to carry workers’ compensation insurance either through a private insurer or the state, or the business can elect to be self-insured. Each state has different rules regarding what is covered, how issues are evaluated, how medical care is delivered and the amount of benefits an employee can receive, so be sure to check your state’s regulations. Failure to carry the required insurance will result in your business paying for the benefits out of pocket as well as penalties levied by the state.

The cost for workers’ compensation insurance varies by provider and industry (high-risk jobs like roofing and …

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The Small Business Owner’s Guide to Insurance Coverage

May 2, 2019


But what if you overcome these hurdles only to watch as a customer slips and falls in your store and sues you for the resulting medical bills? What if a cybercriminal steals customer credit card information – a crime that could result in lawsuits from angry patrons? These incidents, and a host of other crises, could wipe out your savings and shut down your business.

This is why it’s essential that small business owners invest in the right insurance protection. At a minimum, it must include general business liability and property insurance to protect you financially and help keep your business open.

But that is just the start. Depending on your business, you might need everything from a commercial auto insurance policy to business income insurance to an overall umbrella policy that will protect you from the most expensive lawsuits. If you’re worried that your business isn’t adequately protected, call your insurance agent. He or she can study your business and determine just how much insurance you need.

Here’s a brief look at some of the coverage options small business owners might need to keep their doors open, should the unexpected happen.

Business general liability insurance

All small businesses must invest in general liability insurance. This policy covers any financial damages you suffer if someone is injured while visiting your business and sues you for the resulting medical treatment. It also protects you if your business’s products or services injure customers or make them ill.

For instance, say you are using a ladder to stock cans of paint on a shelf at your business. If a can falls and injures a customer, and the customer sues you and wins, liability insurance would pay for the costs of any medical treatments that customer receives. Or, as another example, consider what …

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Preparing for the Worst: How to Make Sure you Are Ready for Unforeseen Bumps in the Road

April 17, 2019


“Hope for the best and prepare for the worst” — wiser words were never spoken when it comes to maintaining a sustainable business.

As a small business owner, being your own boss has many benefits; you get to call the shots and make all the decisions. But it also comes with a lot of responsibility, and risk management is one of the most important responsibilities you’ll be shouldering.

As you probably know, running a business always involves a certain level of risk. That’s what makes entrepreneurship such a leap of faith. With a little foresight and smart planning, though, you can reduce those risks — or at least create a solid plan for dealing with them in order to minimize the negative effects they may have on your business or your income. Small business risk assessment is an essential part of setting up and running your business, and you should make sure to give it some consideration.

Possible Risks

Some of the risks involved in running a small business include:

Financial risk

No matter how well you plan, there is always a risk that the business won’t run as well as you hoped. You may not be able to find as many clients as you anticipated, or your return on investment may not be as high as you predicted. You might encounter an unforeseen expense that depletes your budget or face issues with cash flow. According to a U.S. Bank study, 82 percent of businesses fail because of cash flow mismanagement

Property loss or damage

Many entrepreneurs need specialized equipment for the work they do, and that equipment can be expensive or hard to replace. No matter how carefully your guard your property, there’s always a chance something will break or get stolen. Another type of property that may …

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