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Best In-Class Business Insurance for Technology Firms & IT Consultants
Inflation is a rising price level of goods and services. In the United States, the Consumer Price Index(CPI) measures inflation. The CPI measures the average changes in prices paid by consumers for a basket of goods and services.
The CPI basket includes food, housing, transportation, and medical care. In the previous five decades, consumer prices in the United States have been steadily increasing.
The only time prices dropped was during the financial crisis of 2009, when they did so for the first time since 1955. Between 1984 and 2020, the price level in the United States more than doubled.
In recent years, particularly in 2020, there has been an increase in health insurance and housing prices. These increases have been due to inflation and the COVID-19 pandemic.
That’s because businesses had to pay more for health insurance and rent. The pandemic also caused a decrease in demand for some goods and services. This decrease in sales led to a decline in prices for some items, such as travel and entertainment.
Inflation has different effects on different sectors of the economy, but one sector that is particularly affected by inflation is the insurance industry.
During periods of high inflation, insurance companies face rising costs for claims payouts and increased operating costs. For insurers to offset these rising costs, they typically raise premiums, impacting consumers negatively.
In some cases, consumers may be forced to drop their coverage altogether due to the increased cost. In addition, inflation can also reduce the value of investments held by insurance companies, impacting the insurer’s solvency.
However, there are several ways insurers can try to protect themselves from the impact of inflation. For example, they may increase the length of time policies are in effect or raise the deductible amount a customer must pay before coverage begins. They may also reduce benefits or exclude specific perils from policies altogether.
Inflation is one of the significant uncertainties of life. No one knows exactly how much prices will rise in the future or how those price increases will affect their ability to pay for things like insurance.
Nevertheless, inflation influences insurance in a few different ways. Here are the most notable effects:
Ultimately, however, how much inflation impacts your insurance costs depends on many factors, including the type of policy you have and the insurer you’re with.
Inflation in the insurance industry is something that happens from time to time. It’s natural for companies to reassess their costs and make adjustments based on the current market conditions.
That said, there are a few reasons why inflation might be happening more now than it has in the past.
For one, the cost of healthcare continues to rise. That means insurance companies have to pay more for claims, which eventually get passed down to consumers through higher premiums.
Secondly, we’re seeing an increase in natural disasters, which are also costly for insurance companies. Thirdly, the number of people covered by health insurance has increased thanks to the Affordable Care Act. It means that more people are using insurance, leading to higher prices.
Lastly, the insurance industry is becoming more competitive, leading to price hikes.
So, while it’s difficult to say exactly how much inflation will affect your insurance premiums, it’s essential to be aware of the potential impact and take action as needed. Contact us today for more insights and learn more about how we can help you secure the right insurance for your business.
This article is for general information purposes only. It is not insurance, tax, legal, business, or other advice. For specific insurance questions related to you or your business, please contact our office.
In the modern business environment, every business needs complete multi-department functionality. You need legal and financial compliance oversight, a full-stack IT team to set up your secure business network, a digital marketing presence, and the core team that actually operates your business’ core function. So it’s no surprise that keeping overhead how for small business startups has become a serious challenge.
For small businesses across all sectors including retail, service, healthcare, and software-as-a-service companies, you don’t have to go over budget to cover all your bases. Let’s explore eight of the best ways to keep your overhead low as a small business team.
You don’t need to hire every person you need on-staff. This is good because the number of specialist services a business needs has multiplied in the last few decades. Instead, small businesses in all sectors are now outsourcing entire departments that they don’t keep on staff – at a much lower price for custom-scaled and as-needed services.
In IT, you might hire an MSP or Managed IT service. In finance, you might hire a “fractional CFO”. In marketing, you can hire a digital marketing agency. Or you can choose a platform that provides these functions as-a-Service. Prioritize the team your small business needs and outsource the rest of your departmental needs at a discount.
Use software and automation to multiply the efforts of your onboard and outsourced teams. Your marketing team can be empowered by email and social media automation. Your HR department can streamline using the right management software to make their diverse duties routine. Backed by timed routines, AI-powered algorithms, and even chatbots, your team can do a lot more with their limited hours in a day.
You don’t have to handle every expense directly out of your revenue. Smooth your finances and reduce the risk of unnecessary operational costs with a floating business line of credit. Like a credit card, this is a line you can pull from and pay off as-needed instead of a finite small-business loan.
Ergonomics is the study of efficiency in the workplace. An ergonomic chair holds the body in a position that reduces stress points and maximizes time someone can spend sitting and working. In a floorplan, ergonomics facilitates easy movement and smooth traffic. But in business operations, applied ergonomics can help you identify inefficiencies, pain points, bottle-necks, and then find the best way to empower, streamline, or equip your team at each point.
One very popular option for reducing office overhead is to “go green”. Once thought a costly gimmick, the digital tools are now available to truly cut disposable products and resupply expenses from your overhead costs.
You don’t have to buy your first office, or even the large equipment you need to operate your business. Many startups begin by renting their biggest expenses. If you have revenue turning over but don’t have the deep wells of investment capital to buy your own location or equipment yet, don’t worry about it. Instead, focus on business growth beyond the costs of leasing until you are ready to buy.
Many of the expenses of a small business like marketing and even supply chains can be lessened when you team up with other small businesses. Form an alliance with other local businesses and practical brand partnerships to share costs wherever possible.
For the financial resources, your small business startup needs to operate and grow, contact us today.
A Limited Liability Company (LLC) is a type of business structure that protects the owners from liabilities that the company may face. In other words, financial obligations and other problems faced by the company won’t be extended to the owners’ assets. Therefore, the owners, commonly known as members, are not personally liable for the actions of the company.
Such a kind of business structure is beneficial to you as an owner since it is relatively easy to set up. Not to mention, it offers flexibility in management as the members can take part in decision-making, or hire professionals to run the business on their behalf.
Running any kind of business is a risk, and at any given point in time, your business is exposed to a plethora of risks that may be known or unknown to you. A fire could blaze your shoe store to the ground, or burglars could break into your jewelry store and make away with your precious diamonds. For this reason, you need to insure your business.
The main reason why you should insure your LLC is to ensure continuity in the face of unforeseen perils. Insurance does this by indemnifying your business back to the financial position it was in before incurring the covered loss. Apart from this, insurance is a legal requirement in some states. For instance, many states require employers to take out Workmans’ Compensation for their employees.
Now, let us have a look at some of the insurance policies that your LLC needs.
This type of insurance protects your business assets from loss or damage due to some covered perils. The building in which you carry out your business operations, whether leased or owned, is prone to damage from accidental fires, floods, or even hurricanes. These are risk events that are out of your control and you can never be fully prepared for them. Also, the assets that you use in your business like your laptops, office stationery, or merchandise could be robbed by burglars. Such risks can lead to the paralysis of your business operations.
Commercial property insurance ensures that you get reimbursed for the losses that your business incurs through accidental damages. This enables your LLC to continue its day-to-day operations as usual. In addition, the policy can also be extended to cover loss of profits. This means that your business can continue receiving its usual revenue from the insurance company during the time it takes to rebuild or repair the business premises following damage from an insured peril. Therefore, commercial property insurance is essential for any LLC.
If your business uses motor vehicles as a part of its business activities, then your LLC needs commercial auto insurance. Vehicles used by your business could be the trucks that do deliveries, pickups, or even vans with which you run errands. Not to mention, auto insurance is legally required in most states.
The commercial auto insurance policy covers your business vehicles as well as drivers from accidental damage. It also covers legal expenses that result from third-party damage caused by your business vehicles. When buying this policy, it is important to disclose whether the vehicles are owned by your LLC or leased.
Employees of your LLC may suffer injuries or illnesses arising from the job they do for you. For instance, a drugstore attendant may slip and fall while working in your place of business. They may break a leg in the process. The employee has a right to sue you since this injury arose from the course of their employment with you.
In many states, including New Jersey, it is a legal requirement to purchase Workers’ Compensation if you have any employees. This type of insurance covers you against liability that arises from illnesses or injuries of your employees as a direct consequence of their employment with you. This way, your LLC will be protected from the legal expenses and settlements associated with such kinds of claims. For this reason, Workers’ Compensation is not only a necessity but a requirement for your business.
In the current day and age, technology is a necessity for most, if not all, businesses. Your LLC may hold electronic data on clients, or even some digital assets like apps and other software. This data can be breached by hackers who may introduce malware and ransomware into your company’s digital database. They may then proceed to extort you or use your clients’ personal data to commit crimes like identity theft.
Such an occurrence could be detrimental to your LLC. There will be costs associated with the extortion, recovery, and clean-up of the corrupted data. You may also need to inform your clients of the breach and this will be costly, not to mention the lawsuits that your company may be slapped with.
However, cyber liability is here just for you. This policy will take care of the costs of ransom, expenses involved with informing clients, as well as associated legal fees, should any of your clients decide to take legal action against your company. Therefore, if your company holds any client information, or relies upon digital assets in its operations, then you should strongly consider cyber liability.
Your LLC can get sued at any time for causing injury to third parties or damaging third-party properties. For instance, a client visiting your coffee shop may trip and fall on the stairs. This client may proceed to pursue legal action against your business, and this will force you to incur some legal expenses. Also, a water pipe may burst on your business premises and damage someone’s vehicle.
The general liability policy will come in to cover the legal expenses associated with such charges, whether they are legitimate or fraudulent. In addition, this policy will also cover the settlement amounts on behalf of your LLC.
It is also important to buy professional indemnity since the general liability policy excludes claims arising from professional errors made in the course of business. For instance, if you run a healthcare organization and one of your doctors erroneously misdiagnoses a patient, the professional indemnity policy will respond to legal claims arising from this. Therefore, your LLC needs general liability insurance.
Businesses that are structured as Limited Liability Companies are increasingly becoming popular. However, the risks they face are ever-changing and that is why they need insurance. At insureyourcompany, we are enthusiastic about the success of your business. With over 15 years of experience working with small companies, our insurance professionals are sure to get your LLC the insurance policies it needs. We are passionate about customizing our insurance products to suit your business needs.
Your business has its own insurance needs that may have not been captured above. To find out more about how we can help you insure your company, contact us today.
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