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Q: What is a Sound
Insurance Plan?
A: A sound insurance plan protects you and your business
by shifting risk and by reducing the financial
uncertainties of your business.
An independent agency such as 1 Preferred Place represents
numerous companies who can handle all the insurance needs
of your business. Our agents will become familiar with
your business situation and be able to recommend alternate
plans when purchasing and updating insurance.
Commercial package policies, which combine several
coverage in one policy, are available to business owners
by most insurance companies. Your insurance plan should be
tailored to fit the needs of your particular business.
Several major factors should be considered when choosing
an insurance plan, such as: identifying the risks,
determining appropriate values for those risks, obtaining
coverage for the largest potential loss, and avoiding
duplicate coverage.
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Q: Types
of Insurance?
A: There are a wide variety of coverage available from
underwriting companies, with different premiums and
deductibles. Four major types of property/casualty
coverage are considered to be essential for most
businesses: general liability, property, workers'
compensation and automobile.
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Q: What
is Liability Insurance?
A: Liability insurance protects your business from
financial loss due to bodily injury or property damage
caused acts of the owner, acts of employees, business
conditions or products of the business. A few examples of
liability coverage available include products and
completed operations liability, personal injury,
professional liability, employment practices liability and
pollution liability.
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Q: What
is Property Insurance?
A: Property insurance provides protection from damage to
or loss of property. A few examples of property which can
be covered include buildings, contents, inventory,
computers and electrical equipment and contractors
equipment. Insured perils can be widely inclusive, as in
the "special" form covering all risks of direct loss
subject to a few standard exclusions; or limited to such
perils as fire, windstorm, theft, vandalism, explosions,
hail and smoke as in the "broad form."
Rates are determined by factors concerning the property
and building such as location of the property and
building, building size and height, construction type,
smoke, sprinkler and burglar alarm systems, age, updates
to the building systems, usage, and prior losses.
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Q: What
is Workers' Compensation Insurance?
A: Workers' compensation is a state-mandated, no-fault
insurance system for workplace injuries and illnesses
which covers medical expenses, death benefits, partial
recovery of lost wages, and vocational rehabilitation. By
providing workers' compensation coverage, employers are
shielded from liability lawsuits filed by employees who
suffer job related injuries or illnesses. Workers'
compensation insurance is available from the state as well
as private insurance companies. Rates are determined by
worker code, payroll expense and prior losses.
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Q: What
is Commercial Automobile Insurance?
A: Automobile insurance provides both property and
liability coverage for vehicles owned by the business or
non-owned vehicles used for business purposes. Some types
of coverage include collision, theft and glass breakage.
Automobile liability insurance protects the employers from
losses resulting from an employee injuring people or
damaging other people's property. Non-owned auto insurance
is available to employers for employees driving their own
vehicles on company business. Rates are determined by the
type and usage of the vehicle, as well as the driving
record of the person(s) driving the vehicle.
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Q: What other types of insurance are
there?
A: Other special insurance coverage include professional
liability, identity theft, employment practices, special
events, surety and fidelity bonds, employee health and
life insurance, key-person and credit insurance.
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Q:
Commercial Property Insurance Tips
A: Your business may not possess all the following types
of property, but you can use this reference list to make
sure you have thought of all property categories and any
insurance coverage that may be warranted for your
business.
* Buildings and other structures (owned or leased);
* Furniture, equipment and supplies;
* Money and securities;
* Accounts receivable records;
* Improvements and betterments you made to the premise;
* Boilers and machinery;
* Data processing equipment and media (including
computers);
* Valuable papers, books and documents;
* Mobile property such as automobiles, trucks and
construction equipment;
* Satellite dishes;
* Signs, fences and other outdoor property not attached
to a building
* Intangible property (good will, trademark, etc.);
* Leased equipment.
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Q: Tips
to Lower Premiums
A: An insurance company bases insurance premiums on the
risks involved. They evaluate the situation to determine
the risks, or potential for losses. The steps you take to
lower your risks can help safeguard your business and may
make you eligible for lower insurance rates. According to
the Independent Insurance Agents of America, business
owners should consider these steps:
* Maintain adequate lighting throughout your business
premises;
* Keep electrical wiring, stairways, carpeting,
flooring, elevators and escalators in good repair;
* Install a sprinkler system, smoke and fire alarms
and adequate security devices;
* Keep only a small amount of cash in the cash
register;
* Keep good records of inventory, accounts receivable
and equipment purchases;
* Consider keeping a second set of records off-site,
such as with your accountant, insurance agent or at home;
* Make sure your employees have good driving records;
* Make sure your employees know how to lift properly
and use all necessary safety equipment such as goggles,
gloves and respirators as needed;
* Consider using the services of a risk manager who
can advise you of any safety or environmental regulations
you may have overlooked;
* Talk to your employees about safety practices.
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Q: The
Do's and Don'ts of Smart Insurance Buying
A: Make sure you get the most for your money in buying
insurance for your business.
The Do's
* DO make sure
your chosen agency and insurance company have experience
in your industry.
* DO make sure
your insurance covers all your basic risk exposure, as
well as any specialized insurance necessary for your
specific business.
* DO keep an
inventory of all your property in a separate location from
your business, including photographs when possible.
* DO check on
the financial stability of the insurance company, as well
as the reputation of the agency with whom you are dealing.
* DO consider
insurance that will pay the replacement cost of any
insured property versus actual cash value, which replaces
damaged property at replacement cost minus depreciation.
* DO obtain
insurance for liability for damage to space you rent, even
if your lease doesn't require it, protecting you from
property damages and liability risks.
* DO check on
the insurer's claims services to determine responsiveness
to claims reports.
* DO update
your workers' compensation insurance to reflect changes in
your payroll.
* DO confirm
that your sub-contractors carry their own workers'
compensation and liability insurance.
* DO protect
your business with more than just general liability
insurance.
* DO consider
buying all your business insurance policies through one
reputable insurer to ensure seamless coverage and filings.
* DO work with
a qualified, professional licensed insurance agent with a
reputation for delivering quality service.
* DO inform
your agent of changes to your business, so that your
business information is accurate and your policies provide
adequate coverage.
The Don'ts
* DON'T
underinsure to get a reduced premium at the expense of
financial protection when a loss occurs.
* DON'T hide or
misrepresent unusual risks from your agent, thereby
risking denial to cover a loss.
* DON'T assume
your business' theft coverage will extend to the personal
property, tools or equipment used by your employees. Make
sure your policy includes provisions for theft of
employee's tools.
* DON'T assume
that "malpractice insurance" is only for doctors and
lawyers. Almost any professional can be sued for errors
and omissions.
* DON'T scrimp
on errors and omissions coverage. One professional
liability lawsuit can wipe out an entire business.
* DON'T
overlook the policy's "exclusions." It's just as important
to know what you're not covered for as what you are.
* DON'T just
focus on reducing the cost of your insurance. Look for
ways to reduce the likelihood of losses, and practice loss
control measures company-wide.
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