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Are You Covered?
  • Your Building in Winter
    Winter brings the threat of freezing temperatures and harsh conditions to much of the U.S. Some places are well beyond the threat; it’s going to freeze—there’s no way around it. Such conditions pose unique hazards to commercial building owners. Following is some information on common winter threats and how they are addressed by commercial property insurance.
  • D&O Insurance:  Protection from Boardroom Liability
    Many people will celebrate the holiday by giving back to their community. Volunteering time or services to a company or non-profit organization may be a selfless act of generosity, but these acts of goodwill can also expose volunteers to possible lawsuits if they are making decisions on behalf of the organizations or company. Fortunately, there is a way to mitigate the exposure to lawsuits and continue lending a hand.
  • How much building insurance is enough?
    As a small business owner, you know the importance of preserving your assets. For many business owners, the largest single asset they possess is their building. Whether you occupy the building or operate as a landlord (or both), consider key exposures in your risk-management and insurance planning.
  • Don't Get Robbed Twice!
    One of the often confusing attributes of crime insurance coverages is that the terms used in the insurance policies reflect legal definitions, not the meanings we assume in everyday conversation.
  • Insuring Income: The Lifeblood of Your Business
    If someone asks you if your firm has a catastrophe plan, how would you respond? Would your answer sound something like this: “There’s nothing in writing, however, if something happened that compromised our ability to earn we have a good idea what we would do.”
  • Business interruption insurance
    Would you believe that there is an insurance product specifically designed to help insure a solid, sustainable profit? In fact, without this coverage, hitting your profit targets may become impossible.
  • Where medical fits into liability coverage
    There are two extremely valuable provisions in a solid business insurance policy designed specifically to respond to incidents such as this. The goal of the provisions is twofold:  protect your business from the financial risk of such accidents—legal fees for defense, the potential for large lawsuit awards against you; and try to quickly respond to the pain of the victim in ways that help to avoid lawsuits in the first place.

  • Don’t Let the "Gottas" Determine Your Risk
    As the owner of a small business, you understand better than anyone the meaning of “risk.” The key is to know understand how much risk you can afford, and when or where is the right place to take risk.
  • Don’t Let Your Income Slip When You Do
    Chances are you started your small business with long days and longer nights.  You are fully aware of the truth of the old saying:  'When you are self-employed you work for the toughest boss in the world!"
  • Boom: Understanding Discontinued Operations Coverage
    As a homebuilder, you spent your life making sure the work you did was safe and sufficient. Every year you purchased a commercial general liability (CGL) policy just in case. You made it many years with no claims and want to reward your good work with a much deserved and overdue retirement in where else? Florida.
  • Protecting Your In-Home Business
    Today more than 43 million Americans are operating full- or part-time businesses from the comfort of their homes, and these numbers continue to grow every year. One of the secrets to running a successful home-based business is being able to separate your business activity from your home activity.
  • Landlords, Beware
    Experienced landlords will agree that there is nothing quite as comforting as a good tenant; especially if the tenant spends his own money making improvements to your building during the lease term. 
  • Managing Your Mod
    Employers are told by the states in which they do business how to provide adequate workers compensation insurance for employees. As in other forms of insurance, fair pricing is determined using historical loss data. In the workers comp world, this data is assigned to specific job-types; hence a roofer who hasn’t had a claim in 25 years may still pay a very high rate for his coverage.
  • Insuring the Theft of Your Business Data
    The stories of breached data security have become almost too familiar: An employee takes home a laptop against regulations. A hard drive is sent out for repair, but disappears. A disc with sensitive data is stolen from an office. For business owners and managers, the threat is real, and there is a need to protect against such violations of data security.
  • Triple Net Lease Caveats
    In recent years, more and more building owners are becoming fascinated with the concept of the “triple net lease.” A primary reason for the interest is that the terms of such a lease require the tenant of the building purchase and maintain adequate insurance on the building itself. This is in contrast with traditional lease agreements, which generally state that a tenant is responsible for insuring what’s his and the building owner handles the rest.
Insuring Income: The Lifeblood of Your Business
If someone asks you if your firm has a catastrophe plan, how would you respond? Would your answer sound something like this: “There’s nothing in writing, however, if something happened that compromised our ability to earn we have a good idea what we would do.”

Maybe your plan is to contact a competitor to help you set up shop for a while. Maybe it’s to rent space and negotiate new service contracts with vendors. Maybe it’s nothing at all.

Without a defined plan, the continuity of your firm after a serious loss damages your property—such as a fire or windstorm—is questionable. So, a damaging loss brings your operations to a screeching halt, consider business income insurance. If this insurance policy is designed to supplement the resulting lost income as well as provide much needed dollars to pay continuing expenses.

While commercial property insurance protects your real estate and contents, business income insurance protects your firm against loss to your firm’s profit-and-loss statement by covering continuing expenses, helping your firm preserve contractual obligations and retaining personnel.

Excuses, Excuses
There are several reasons often cited by business owners for not purchasing business income insurance—and the most common one is cost. Because this insurance is not typically required to secure and retain a loan for a piece of property, many business owners forgo this important coverage to keep costs down.

Another common reason is the nature of the insurance itself. Quite simply, business income coverage is different from standard property insurance in that it is designed to cover indirect losses. Many owners incorrectly assume all costs resulting from the loss are covered by the commercial property policy, when in fact that policy is only designed to cover direct losses to property such as a damaged roof or broken windows.

Another reason is that many business owners show reluctance when asked to furnish complex and sensitive financial data during the underwriting process.

Some Alternatives
Owners that forgo business income coverage are left with few options to protect the firm’s income after a loss. Examples include:

Cash. Even if the firm is in a position to continue funding necessary costs with cash, wouldn’t you prefer to use the firm’s cash for expansion or growth rather then using up this valuable resource funding a catastrophe plan?

Borrow. Your firm could collateralize the loan with the firm and/or its resources. However, keep in mind that a severe loss has just occurred and therefore lending institutions may be skeptical in handing out funds when it appears the firm’s ability to generate revenue has been compromised.

Determining Adequate Coverage
This can be tricky. The good news is that your Trusted Choice® independnet insurance agent can help guide you through the process. Examples of questions that must be addressed include:

• How long will it take to rebuild? Could you relocate to an alternate location?

• Do you have any reciprocal agreements with competitors that could help your firm stay afloat by sharing resources?

• Does your firm have contracts with vendors or suppliers that could be jeopardized by your indefinite absence from the marketplace?

• What is your firm’s anticipated loss of Business income? Business income includes net income (net profit or loss before income taxes) and continuing normal operating expenses, including payroll. This should include total profits and all expenses that will continue during the interruption.

• How much extra expense coverage is needed? Extra expense insurance typically is sold along with business income insurance. This insurance provides dollars to pay expenses that exceed the normal operating expenses you would have incurred had the loss never happened, such as the cost of leasing a temporary space. It also is designed to cover necessary expenses that reduce the business income loss such as overtime payments to laborers that expedite repairs.

• What is your firm’s projected net income and operating expenses for the next 12 months?

• Would sales continue to suffer for an extended period of time after your firm reopened for business?

The truth is that many businesses go under after a catastrophic loss not because the building can’t be repaired, but because of the firm’s inability to earn. Business income insurance is designed to remedy this situation; this is why it is often referred to as disability insurance for your business. For more information on securing valuable Business income insurance for your firm call your Trusted Choice® independent insurance agent today.

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Alexandria, VA 22314
Phone: 800.221.7917
Fax: 703.683.7556
Email: Trusted.Choice@iiaba.net