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Best In-Class Business Insurance for Technology Firms & IT Consultants
According to the U.S. Bureau of Labor Statistics (BLS), more than one third of the workforce in the United States is made up of those over the age of 65, also known as Baby Boomers. While this may be the traditional retirement age, most people plan to keep working—some up until their mid-seventies.
For many business owners, this growing trend means that employee benefit needs for a multi-generational workforce have to be addressed.
In fact, the latest statistics show that by 2018:
Let’s not forget the other growing workforce trend: Millennials. While the actual age of Millennials is often questioned, generally this group of individuals has a birth age ranging from the early 1980s to around 2000, according to most commentators and researchers.
Of course, there are still the Generation X workforce members, but Baby Boomers and Millennials are the most prevalent due to their growing numbers.
When it comes to providing benefits for a company workforce, flexibility is key since not every benefits package will fit all three generations of employees.
For instance, many Baby Boomers will be attracted to a benefits package that focuses on retirement, extended benefits, and healthcare plans. Millennials will be more concentrated on student loan debt and Generation X workers may want a package that will aid in caring for their parents or even starting a family of their own. Flexible working options are an excellent idea for those employees of any age.
Flexible working options include offering benefits such as:
For example, wellness programs work for all generations, offering access to on-site health screenings, wellness experts, gym memberships, and benefits that enrich the lifestyle of the employee. These are ideal to the employee as their quality of life will be increased along with helping prevent injury.
There are challenges when it comes to providing employee benefits for a multi-generation workforce simply because of diverse needs. It is not just the end result like paying off loans or looking forward to retirement—this also includes varied work and life philosophies.
There is a way, however, of providing benefits that fits the ideals all generations. These include:
These benefits work well for all generations. Here is a breakdown of those benefits that cater specifically to Baby Boomers, Generation Xers, and Millennials.
As you can see, the wants and needs of a multi-generational workforce are diverse, but not impossible to overcome. Establishing the proper plan that implements benefits that cover a little of everything will lead to a successful plan as many of the needs overlap throughout varying generations.
By the time a new business is ready to open its doors to the public, its owners have typically invested substantial time and money into the effort. From purchasing or renting real estate to scouring the Internet for the very best deals on the best equipment to launching a website and an advertising campaign, those starting a new business stand to lose a lot if that business is not properly protected.
The best way to protect a new business is to make sure you have the right coverage from the start. Here are 7 types of insurance for new businesses that every new businessowner should look into obtaining.
Liability insurance is a must for every business, even those that are run out of one’s home. This will provide protection against any claims that the business owner, employees, or products/services have caused any bodily injury or property damage to another party.
Property insurance is appropriate for those who own the building in which the business is run, as well as for every business that owns any property at all, including equipment such as computers, inventory, or tools of the trade. This coverage will protect a business from property loss that may occur as a result of fire, vandalism, theft, smoke, and more.
It is worth considering adding business interruption or loss of earning insurance to this policy as well to protect the earnings that would have occurred during any time that the business is unable to operate as a result of any of the aforementioned causes.
A business owner’s policy, also known as a BOP, is actually a package that includes all of the coverage a particular business owner is required to have. It can be tailored to an individual business to include such coverage as business interruption insurance, liability insurance, crime insurance, property insurance, and vehicle insurance.
This option is worth considering because it often saves money over purchasing each of the included types of coverage individually.
This type of insurance will protect any vehicles used by the company. These include vehicles used to transport employees, equipment, or inventory, and protects said vehicles from collisions and damage.
Alternately, if the company does not own any of its own vehicles but instead has employees use personal vehicles for company business, a non-owned auto liability policy should be purchased to protect the company against loss in the event that the employee’s auto insurance is insufficient. This coverage can often be added to a BOP.
Worker’s compensation insurance provides coverage for injuries sustained by employees while on the job, including wage replacement and medical benefits to those employees. When an employee receives these benefits, he or she waives the right to sue the company for the incident that resulted in injury, making it well worth its cost.
While each state has its own laws regarding worker’s compensation insurance, every state requires businesses with W-2 employees to carry the insurance, and many carry severe penalties for non-compliance.
This insurance is especially appropriate for businesses that provide professional services, as it provides both damages and defense for improperly rendering, or failure to render, professional services. Businesses that may benefit from this type of insurance include lawyers, accountants, consultants, real estate agents, and notaries among other professional firms.
This protection, which is sometimes called errors and omissions insurance, is not included in general liability insurance, so do not make the mistake of believing one to be in lieu of the other.
Businesses that store sensitive, private information on either customers or employees would do well to purchase cyber liability insurance, as skilled hackers, both domestic and international, make data breaches every day news.
Such businesses are responsible for keeping that information safe, and a data breach from paper files or electronic files can lead to expensive lawsuits. The cost of such a breach can be mitigated by carrying cyber liability insurance.
To talk more about the insurance that is right for your new company, contact us for a free new business assessment. Our team can help you determine the best types of coverage that are right for your specific needs when starting a new business.
The Affordable Care Act, known colloquially as Obamacare, provides the infrastructure through which individuals and businesses in the US can buy health insurance. Since its implementation in 2014, the law has allowed over 10 million people to access health insurance that they might not have otherwise been able to afford. It has also helped thousands of small businesses to provide health insurance to their employees.
In addition to providing access to health coverage, the ACA imposes new obligations on both individuals and businesses. These new obligations and opportunities are relevant to start-ups at every stage of their development.
Start-ups affected by the ACA are split into four categories: single-person startups, businesses with fewer than 25 employees, businesses with between 25 and 50 employees, and businesses with over 50 employees. A fast-growing start-up may go through all of these stages rather quickly.
Many start-ups begin their lives as a single person with special skills. Individual business owners can purchase health insurance through the individual healthcare marketplace, regardless of whether they operate as sole proprietors or have incorporated into a LLC. Individuals who live in the US and do not meet any of the individual mandate exceptions must have health insurance or pay a fee.
Self-employed people can receive tax credits to pay for some or all of their health insurance premiums. The federal government targets tax credits towards people with a Modified Adjusted Gross Income (MAGI) that fall between 138% and 400% of the Federal Poverty Guideline. For an individual in 2016, this range is $16,242 to $47,080. Individuals can decrease their MAGIs by contributing to a tax-deductible retirement plan. Individuals whose income falls below the minimum can use Medicaid if they live in a Medicaid-expansion state.
Businesses with more than one employee can use the Small Business Health Options Program (SHOP) to buy coverage for their workers. SHOP provides small employers with increased purchasing power to help them provide better coverage. The SHOP marketplace eliminates the need for businesses to negotiate with health insurers in order to get a plan.
In addition to having access to SHOP, some employers with fewer than 25 employees can claim the Small Business Healthcare Tax Credit. The tax credit provides businesses with a refund of 50% of their contribution to their employees’ health care premiums. In order to qualify, a company’s average salary must be less than $50,000 and the employer must pay at least 50% of its employees’ premiums. Employers do not have to offer coverage to dependents or to employees who work fewer than 30 hours per week to get this tax credit.
Start-ups with between 25 and 50 employees are not thought to be as much in need as those with fewer than 25 employees. Much like companies with an average annual salary of $50,000 or more, these larger businesses cannot claim the small business tax credit. They do retain access to the Small Business Health Options Program and can continue to benefit from SHOP’s negotiating power.
Larger employers, specifically those with at least 50 employees, do not have access to the Small Business Health Options Program. However, they do have responsibility to provide health insurance to their employees. These larger start-ups are subject to the Employer Shared Responsibility Provisions of the ACA. If these employers do not offer affordable coverage to those employees who work at least 30 hours per week, they may be required to pay a fee if one or more of their employees purchases individual health insurance from the marketplace and gets a premium tax credit.
The Affordable Care Act provides start-ups with access to affordable health insurance for their employees. It also imposes some requirements on employers. The types of tax credits and marketplace access available can change as a start-up grows.
Of course, there are exceptions to these general rules, and the requirements can vary depending on the circumstances of each individual business. For more information about providing health insurance to your employees, please contact us.
When it comes to workers’ compensation, are you required to carry the insurance for people who are not your full-time employees? For many business owners, this is not an easily answered question.
While state law does not require you to carry the coverage for independent contractors, and a number of employers do not classify those who work for them as full-time employees, there is a catch.
You may think a person doing work for you is not a full-time employee, and that you can save money on payroll taxes, state taxes, and federal taxes, and workers’ compensation premiums by classifying him or her as a contractor. But the government may disagree with your classification, which could cost you a lot of money down the line.
Another catch is that some state laws require you to provide the coverage if the contractors don’t provide it themselves.
An employer could face tax fines and a variety of serious penalties if someone classified as an “independent contractor” is later classified as a full-time employee.
The IRS used to make it simple for employers to figure the issue out. If withholdings were deducted from a check, the person was an employee. If not, the person was an independent contractor.
That was before the IRS realized it was losing $30 billion in tax revenue annually because of people being misclassified as independent contractors. As a result, every IRS audit considers whether those who work for an employer were correctly classified as employees or independent contractors.
There is another danger of those who work for you being misclassified. Your general liability insurance may cover you if an independent contractor is injured on the job, but if someone working for you is later classified as an employee, it will not cover damages. Legal damages can sometimes exceed $1 million.
There are some distinctions between employees and independent contractors:
Some insurance carriers require employers to deduct payments for independent contractors for workers’ compensation, unless the contractors have their own insurance. Some employers have found if their contracts specifically state that the purchaser of services does not provide the insurance and is not liable, their carrier cannot do this.
Some employers protect themselves on this issue in a few different ways ways:
If you have any additional questions about workers’ compensation and the independent contractor, feel free to contact us.
Securing adequate and appropriate business insurance coverage is non-negotiable for any business owner whose endgame is to achieve financial success or, at the very least, to avoid legal catastrophe.
For most responsible business owners, this means obtaining at least one quote prior to beginning operations, usually as one of the first steps taken following incorporating and/or registering the business as applicable. For many a small business owner, this will be the first experience that he or she will have with business insurance.
Don’t leave the protection of a business and assets to chance. Improve the odds of securing the correct coverage for any business by heeding these tips for analyzing your business insurance quote.
Liability insurance limits set the maximum amount that an insurance company will pay for any incident. This includes the maximum amounts that the company will pay for bodily injury per person, bodily injury for the entire incident, and property damage. The limits can be either split limits or one single total limit.
Split limits will be shown as three numbers, divided by slashes, which represent the limit for each category. For example, split limits listed as $20,000/$40,000/$13,000 mean that the insurance company would pay a maximum of $15,000 to each person injured per incident, $40,000 total to all people injured per incident and $13,000 total for all property damaged per incident. If split limits are selected, the total coverage for property damage can not exceed the total coverage for bodily injury.
It’s also important to note that if any vehicles on the policy have liability coverage, all vehicles must be covered. Additionally, all vehicles on a policy must have the same liability limits. Finally, each state has its own requirements about the mandatory minimum amount of liability coverage required for a business, so it’s important to double-check what those numbers are and to be sure that the any quotes provided meet those minimums.
When selecting an insurance company to provide business insurance, it’s important to be sure that the carrier has the financial resources to honor the terms of the chosen policy by paying claims as necessary. To do this, the company must be both financially sound and creditworthy currently and in the long-term, for at least the life of the policy. Many businesses turn to the evaluations of a third-party to make this determination.
The most widely sought ratings are from the A.M. Best Company. Companies such as A.M. Best thoroughly review a carrier’s financial statements, business plans, credit, actuarial reporting, regulations, reinsurance and underwriting criteria before assigning a rating to a carrier.
Depending on the carrier’s ability to meet its current and long-term financial obligations, the rating can range from A++ (superior) to S (suspended). Additionally, A.M. Best gives each carrier a rating to designate its financial size. These ratings are given in the form of Roman numerals and range from I (less than $1 million) to XV (more than $2 million).
Choosing a carrier with a rating of A or better is a wise move to protect a business from the financial disaster that might follow the inability of a carrier to meet its financial obligations to the business.
Additionally, some state licensing authorities and contracts have requirements about the minimum rating that a business’s insurance carrier must have. Check the rating of any carrier before choosing to do business with that carrier in order to be sure that it can both meet its obligations to the business down the road and meet the requirements of any contracts or authorities as necessary.
When paying any covered loss, the insurance company will first deduct any deductible that has been written into the policy. A deductible, given as either a percentage of a claim or a fixed monetary amount, is the portion of a claim that must be paid by the insured business itself. Including a deductible in a policy protects the carrier from having to pay out endless small claims.
A business can generally choose to have a higher or lower deductible to some degree, although there are some set standards for deductibles. In general, it’s also the case that a policy’s deductible increases as the policy premium decreases. While it may be tempting to select a policy with a low premium and a high deductible in hopes that the likelihood of filing a claim is low, the truth is that it’s not possible to predict when a claim will need to be filed.
With that in mind, it’s important to find a balance between a premium that is compatible with the business’s cash flow and a deductible that will not financially devastate a business in the event that a claim is filed.
Finally, when settling on a deductible, it’s important to understand whether the policy provides a “cash value” basis for replacing a loss or whether it covers replacement cost. A “cash value” basis for replacement means that the carrier will pay the insured business for the value of the damage minus any depreciation. This amount may not be enough to fully replace or repair losses a business suffers. A complete replacement basis means that the carrier will pay out the full amount needed to repair or replace damages. The replacement cost will generally result in a higher premium than a policy that pays out losses on a “cash value” basis.
A policy’s payments agreement outlines how, when, what amount, and how often a premium must be paid. It’s important to make sure that the payments agreement of a quote lines up with what the business’s cash flow is able to support.
Additionally, it’s important to note what the terms of policy cancellation and suspension are regarding late payments. Failing to make a payment before a policy is cancelled can result in changes to the policy and future policies and may even result in unpaid claims if there are incidents that occur during a time that a policy is not in effect. This can put the entire business at risk.
A business insurance quote will include a classification of a business according to industry. This classification is made based on what a business’s main activity is. It can affect both the premium amount as well as what activities are covered by the policy. This makes it essential that the classification given in a quote accurately reflects the main business activities that the business seeking insurance participates in.
If there are any questions about whether this classification is accurate, it’s imperative that the business seeks clarification from the carrier who has issued the quote in question prior to contracting for the policy.
Need an insurance quote for your business? Speak with one of our experts and get your company started on the road to success with the proper coverage.
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