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Best In-Class Business Insurance for Technology Firms & IT Consultants
You see the signs on the sides of contractor’s trucks “Licensed and Insured.” This is supposed to give the person or business that hires the contractor a sense of security.
Contractors and small business owners are required to obtain insurance by some regulation or contract. For example, state law requires businesses (depending on the industry) to hold a bond in order to get a license. When you rent office space, a landlord will have insurance requirements in the lease that you need to meet. If you have employees, then by law you are required to maintain a workers’ compensation policy to protect them from an injury on the job.
I sit with these small business owners all the time and they usually have no idea of the coverage they have or what the policy covers. They do not know the difference between liability coverage and property. When I ask what perils need to be covered or what is their deduction or retention I am meet with blank looks on their faces.
An insurance policy is a legal document spelling out all the coverage’s and exceptions written in such “legalize” that the layman cannot easily understand all the coverage’s and exclusions unless they have had some training in contract law.
You know your business, you know what you do, what tools or supplies you have and what issues you might encounter on a daily basis. You need to determine how much of that you are willing to take responsibility for and how much are you willing to pay out of your pocket if something happens. This will give you an idea of what risks of injury or property damage you may have. Once you understand the risks your business has you will want to transfer a portion of that risk to an insurance carrier.
Going to your insurance agent and obtaining a policy is fine, most agents use “package policy” specifically for your industry and occupation. To make sure that you are covered for the risks you have you will need to ASK QUESTIONS and find out if YOUR concerns and needs are met.
Is there coverage for you tools on the jobsite?
What if you are at a client site?
What if your clients come to you?
Questions like these will ensure that you and your business are insured properly. So when you look at “Licensed and Insured” on your vehicle or store you can feel confident that your business has what it needs to succeed.
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The phrase “1099 employee” is spoken many times during our conversations with Human Resources Managers and owners of information technology companies. It seems to be difficult for businesses to determine the status of workers for tax purposes. Knowing the steps to take will make the process easier and will help you avoid any penalties for wrongly classifying contract employees. Here are some highlighted points on what the Internal Revenue Service says about 1099 workers.
The IRS refer to common laws that define how to classify workers:
Differences between Employee and 1099
Employees are paid on a w-2. Taxes and Social security are taken out of their salary. Anyone who performs services for you is your employee if you can control what will be done and how it will be done.
Independent Contractors (1099) are self-employed and are responsible for understanding the tax obligation check out this site to help. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center
1099 ARE NOT EMPLOYEES
The definition of a 1099 is that of an INDEPENDENT CONTRACTOR. They can be a separate entity, LLC or Corporation; they can also be an individual or Sole Proprietor.
If you are still confused on how to classify your workers the IRS will help you determine the proper way to classify your employees. The website gives you an interactive page to submit the request. Properly classifying your workers will enable you as the employer to avoid costly fines and penalties.
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Commercial General Liability (CGL) is a form of property and casualty insurance that business should have to protect them against liability claims. It mitigates the risks and costs associated with a business being sued. Instead of liability claims resulting in expensive and timely litigation, the risk is transferred to the insurance carrier that the policy is in place through.
Whether at fault for a claim or not, a business may still be held liable for damages that occur. The insurance carrier will cover the costs, up to the policy limit, that are associated with a claim made against a business having a Commercial General Liability policy.
A company’s exposure to a risk of liability can vary depending upon the different activities involved in conducting business. Specifically, a general liability policy is recommended if your business:
Businesses are likely to face financial setbacks that are difficult to overcome without adequate coverage in place. Liability insurance could make the difference between having a successful and predictable business environment or an unpredictable one subjected to unforeseen expenses.
Liability claims for bodily injury, property damage, and personal injury are all covered under a standard commercial general liability policy with adequate coverage. These damages and injuries can occur:
Advertising and personal injury can occur if another company feels as though it has been slandered verbally, in writing, or while marketing and advertising . When paying out of pocket, even a false accusation against a business nearly always results in some form of negative financial consequences. A Commercial General Liability policy serves as protection for businesses against these associated costs by diverting law suit expenses to insurance claims.
Depending on the policy in place, an insurance claim through a Commercial General Liability policy can either be covered by occurrence or on a claims-made basis. An occurrence policy handles injury or damage claims that occur while a policy is effective or in force, regardless of when the claim is submitted. A claims-made policy handles only claims that occur and are reported during the policy period. Typically, policies purchased on an occurrence basis have higher premiums than those purchased on a claims-made basis.
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Deductible is a term we all relate to insurance. If you have ever had health insurance, car insurance, or property insurance, then you have most likely dealt with a deductible. So why is it there? Almost every type of insurance incorporates a deductible into the policy. The deductible is the portion of out-of-pocket expense that the insured is responsible for before coverage kicks in.
Insurance companies find that by giving the insured responsibility for the first portion of the coverage they avoid large numbers of trivial claims. Reducing the amount of payout and claims results in higher savings. The insurance carriers use those savings to lower premiums for their customers. Insurance is all about risk and when the insurance companies are able to transfer a portion of the risk to the policy holder premiums go down. You can see this effect when you shop for quotes on car insurance, raising or lowering the deductible changes the premium up or down.
Health insurance companies include deductibles and co-pays to share part of the expense of medical benefits with you. A co-pay is a fixed amount that you pay at the time you receive a medical service. The details are laid out in your benefit summary and are included on your medial id card. The deductible is the insured’s out-of-pocket responsibility before medical benefits kick in.
We hear the question “why do I have to pay a deductible if I’m already paying a premium?” quite often and the answer is simple. The deductible and co-pay help get the insured involved. If you didn’t have a deductible you would just run to your doctor or hospital where test are conducted, professional’s asses you and medication is prescribed just for a common cold. With a deductible in place, the insured has to think twice before running to the doctor or hospital for minor issues. This helps reduce the cost of claims saving the insurance carriers money and lowering premium. A common deductible in today’s health insurance plans are about $1,500-$3,000 it encourages the policy holder to be smarter and conscious about the medical decisions we make. If we become a smarter healthier consumer the insurance premiums will go down by saving the insurance carrier money. We have also seen an adverse effect to high deductibles and co-pays. We find that people will avoid going to the doctor or buying prescriptions to avoid co-pays and deductibles.
For your auto and property insurance the deductible is pretty straight forward. The deductible applies on claims arising from damage to or loss of the policy holders’ vehicle or property. If your auto is involved in an accident, regardless of whose fault it is your policies deductible will have to be paid first before your insurance coverage kicks in. The same with your property, before it can be repaired or replaced a specified deductible that was agreed on must be met.
The deductible is an integral part of insurance and helps maintain the lowest cost possible. Though not poplar when it comes time for a policyholder to pay it, you will think healthier and drive safer before having to pay your deductible.
Believe it or not, most businesses rarely have to ever submit a claim to their insurance company. But, when property is damaged or liability issues arise you will need to file a claim with your insurance company. This is the way in which insurance carriers determine if a policyholder’s claim is covered under their business insurance policy. Filing an insurance claim is likely a result of negative business issue so it’s stressful before you even get started. Understanding the steps you need to take to file a claim and protect your business will make an already stressful situation much easier.
Here are some helpful tips when filing an insurance claim:
Insurance claims are never a fun process but with these tips you can better educate and prepare yourself to get a fair settlement.
The new Federal Health Care Reform Law requires all employers to notify their employees about the availability of public health insurance exchanges before October 1, 2013.
On Wednesday, May 8, 2013, model notices were released for employers to provide to their employees. By providing your employees with these notices, it satisfies the law’s requirement so it is extremely important you comply with the law and distribute to them.
The notices are slightly different depending on whether you offer a health insurance plan or not. Below are links to the notices.
I offer a health insurance plan for my employees I don’t offer health insurance for my employees
Both notices explain how the exchanges will operate and the conditions that need to be satisfied for employees to obtain federal premium subsidies to purchase exchange-provided coverage.
Additional information about the health care insurance exchanges can be found on www.healthcare.gov or through the Department of Health and Human Services.
If you are a business owner or employee who has any questions about the new health insurance exchanges, please don’t hesitate to contact us today. We’re here to help.
In today’s unpredictable, finger pointing world, people can sue you for just about anything so it is important to protect yourself and your money. Without umbrella coverage you may not have enough insurance to protect your assets. Our environment is volatile and random so don’t be caught in the rain without an umbrella. Here are five things everyone should know about Personal Umbrella Liability Insurance.
If you are injured on the job you will require compensation for lost wages and medical bills. But who do you go to for compensation? Before workers compensation laws were enacted employees would have to sue the employer and prove that they were at fault or negligent. This did not help either party and would leave someone with a huge financial loss. After many years of passing laws and countless court cases each state in the union now has some form of compulsory workers compensation law requiring every business with employees to have a worker’s compensation insurance policy in force. This gives every employee the right to medical benefits and wage replacement in case of injury, while relinquishing their right to sue the employer.
How does workers compensation work? When a business purchases workers compensation insurance they are paying an annual premium for a injury or illness benefit. Workers Comp provides payments for medic bills and lost wages to employees who are hurt on the job and may not return. To receive medical payments and wage replacement a claim must be filed. After treatment is administered the employee needs to contact the employer and file a claim with the insurance carrier. This is the only way benefits can be given out to the employees. A claim will trigger the insurance carrier to review the claim and determine if the policy benefits apply. The insurance carrier will do a thorough investigation reviewing the injury, talking to witnesses and contacting the employer. They are trying to determine if the injury was work related and covered by the insurance. They will investigate the seriousness of the injury the ability of the employee to continue to work. These factors will decide the amount of wage replacement the employee can receive. Please refer to your states workers compensation laws for more details.
For the Employee The employee is guaranteed the right to medical payments and wage replacement if they are injured or become ill on the job. If injured, workers’ compensation has medical benefits to pay for reasonable medical treatment, prescriptions and hospitalization services related to the work injury. There are different medical benefits for different types of injury. There are temporary total disability benefits, permanent partial benefits, permanent total benefit, and death benefits. These benefits are to help the employee while out of work for an extended period of time usually more than 7 days. Providing wage replacement (generally two-thirds of their wages are paid) and medical payments.
For the Employer Workers compensation protects the employer from law suit by their employees, with an active workers compensation policy, employees relinquishing their right to sue the employer. This gives the employee confidence that the employer is taking care of them if an injury occurs. Every state has workers compensation laws that the employers need to follow. Compulsory workers compensation law makes it mandatory to provide workers comp or face a penalty from the state. These penalties can be expensive so avoid them and contact your local agent to find out more about the state specific workers compensation law.
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Professional liability insurance has many names. You can call it professional indemnity insurance, errors and omissions or malpractice insurance. The name depends on the profession you are in. For instance if you are a physician, hospital, clinic or healthcare provider you will call it malpractice insurance. If you are in a non-medical profession such as an IT consultant, lawyer, accountant or insurance broker you would call it errors and omissions. The name is unimportant but what is important is how and why professional liability insurance exists.
A profession is defined as an occupation requiring considerable training and specialized study. Special education and ethical conduct usually accompany the duties of a professional and because of this professional liability addresses the liability that general liability misses. General liability is a great for bodily injury claims or property damage for professionals who provide advice or a service need protection from bearing the full cost of defending your legal liability.
In the business world there a several factors that influence the legal liability of professionals, the professional/client relationship, expectations regarding professional services, standard of care, legal environment such as laws/regulations, prior court decisions, and the litigious nature of society. When you enter in to a contract with a client your legal liability is to meet those requirements. Professional liability is designed to handle claims of alleged failure to perform such as negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.
If you work leads to a financial loss for your client your business could be responsible for damages and court fees. Professional liability coverage is focused to protect your business and the work you do. A client can allege that you failed to perform your part, made an error or omission in the service or product sold. For example a software product fails to perform properly, it may directly cause financial losses which could potentially be attributed to the software developer’s misrepresentation of the product capabilities or a custom-designed product fails without causing damage to person or property other than to the subject product itself, the cost to redesign, repair or replace the failed product itself can fall on to the manufacturer.. These are potential cause for legal action and with professional liability insurance (errors and omission) you can protect your business.
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If you are in the IT industry InsureYourCompany.com is the insurance agent you want to work with, we are technology insurance experts and have changed the way you do business. See below a list of professionals who we help today.
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