UK Business Insurance: What Types Do You Really Need?

Generally speaking, in the UK there are three types of business insurance; Public liability, Product Liability and Employers Liability Insurance.

Of the three, only Employers Liability Insurance is required by law; and this only applies if you have any 'employees' working under your direction. Although you may not consider yourself to have any employees, you would do well to check as the definition of an 'employee' to insurers is very, very wide. Some individual cases where successful claims were made were highly tenuous and can include family members or friends working under you for very short periods of time. So consider freelancers, contractors, sub-contractors, interns or anyone doing paid work, even if it's only as a favour. To be more certain of your own position, contact your accountant or HMRC.

By law, the minimum legal coverage your business should have should be up to £5,000,000; although many business insurers will provide up to £10,000,000 in cover and others will combine both employers liability cover with both public and product liability into one comprehensive policy.

The slightly less essential public and product liability covers protect you from more general incidents. If you offer products or services, such insurance cover should protect you from any claims that result from illness, injury or damage caused by your products or services, such as a customer injuring themselves whilst using your product or perhaps someone claiming food poisoning as a result of your catering services. Some authorities and committees will require that you have some form of cover when working with them to protect themselves, this is common for businesses that use a tender process as part of their supplier selection process. This is perhaps a problem to service providers; those who sell an isolated product usually have a fair idea of the risks involved, services however are often tailored to particular circumstances and clients, and they have a tendency to change over time. So if you design websites for example, a client could misuse the solution you put in place, ruin their site and their brand, and later blame you for a lack of training.

Although these cases are rare, they do occur. It's because of this rarity that many businesses neglect to insure themselves, but the problem is that when they do get sued, the costs are never small when the claim is successful. It's like playing on a monopoly board where Mayfair has three hotels, it's unlikely that you'll land there... But when you do the costs can lose you the game, or bankrupt you in real terms.

The same applies to Public Liability. This protects you from the public at large, should they fall down some stairs in your premises, scald themselves using a tap or should they trip over your doormat, you're covered. Many businesses believe that they shouldn't have to pay out for their customer's stupidity or lack of bodily coordination, but the simple fact is that if they injure themselves on your premises and make a claim, you stand to lose a lot of money if you're not insured; relying on their goodwill and their acceptance of their own clumsiness and lack of awareness is unlikely to get you very far.

That said, it is prudent to take out this cover anyway. Many smaller businesses could never afford to pay the damages resulting from a claim, but they may well find a commercial business insurance policy to be within their grasp. As the English proverb goes, it's better to have it and not need it, that to need it and not have it.

For a quote or advice, contact a specialist Business Insurance Broker.

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Business Insurance - The Mistakes You Should Avoid at All Costs

It's funny that while authorities advise people to practise safety measures, business lessons encourage the opposite. Entrepreneurship always advances risk-taking measures because enterprise development is partly about gambling a person's future and finances on trade. The result is many business owners are willing to throw out all precautions out the window and end up without business insurance. If you employ the happy go lucky stance in your restaurant business, it's time to look closely why you need coverage.

Myth #1 - My business does not need it

Many restaurant owners believe they could get by without restaurant insurance. These individuals often think that as long as they are careful in handling equipment, nothing will ever go wrong. If you believe in the same thing, you are taking in too much risk.

While you can be very cautious on cooking equipment and other kitchen systems, you cannot guarantee others will follow your lead. One careless mistake and you can have a fire-damaged dining place. If someone forgets to close the place properly, thieves would end up stealing your cash and other valuables. Once this happens, you end up with more losses than you can imagine. Worse, such losses are preventable only if you have restaurant insurance.

Myth #2 - Insurance premium is the same for all

If you believe that business insurance coverage is the same as all others, think again. Different industries have specific coverage guidelines assigned to it. This difference matters when it comes to cost.

Other factors such as business insurance history and precautionary measures also count. For instance, if a business has many claims due to incidents it got involved in, premiums set for this company could be higher. The insurance firm will be meticulous in approving the business as a client because of its poor records.

If a company, however, employs various safety devices and mandate safety training for all employees, insurance firms may see this as a positive move. The situation becomes even more favourable if the business does not have any untoward incident.

A high deductible also plays an important role in business insurance. If you pay a high deductible, you pay a lower monthly premium. Paying low deductible means getting higher monthly premium to balance things.

Myth #3 - I can buy policies from anywhere

While some companies expand their business scope, you should still buy some things from specific merchants. For instance, it's wiser to buy travel insurance from insurance companies rather than buy it from travel agencies. If the travel provider suddenly closes, your policy disappears with it.

If you're buying business insurance, why buy it from an organization that only does it on the side? The risk-return trade-off can be great, but remember if something goes wrong, you may end up with nothing. You could end up losing the money you paid and your business if you do not receive compensation.

Business insurance is a big step towards protecting your company. Doing it the right way can get you assurances, while doing the opposite will have repercussions. To make sure everything will run smoothly, examine your needs and look at possible offers today. The earlier you make these steps, the sooner you get your coverage.

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Fleet Coverage: A Cost Saving Option for Small Businesses

During these challenging economic times, small business owners constantly look for ways to cut overhead costs. If the business owns and uses more than four vehicles, the cost of fleet coverage tends to be less expensive than purchasing individual policies for each vehicle. Additionally, by having all the company's vehicles covered by one policy, there is less administrate time and cost consumed by managing the premium payments and insurance policy.

Types of Fleet Coverage Available

Comprehensive and Collision Insurance: Similar to standard single vehicle personal car insurance policies, fleet comprehensive and collision insurance covers damage to the coverage to the insured vehicle in the event of an accident, vandalism, weather or theft. Most finance companies require this type of insurance for vehicles for which they have provided financing and specify the minimum limits of liability coverage required for the policy. Some of these policies also cover medical expenses for the driver and passengers in the event they are injured in an accident while in the covered vehicle.

Some insurance companies offer roadside assistance riders in the event the covered vehicle has a breakdown while in use. It is important to determine if this type is need because many times the warranty on new cars, trucks, and vans provides this coverage. Additionally, some policy riders are available to provide a temporary replacement vehicle in the event a covered vehicle is out of service due to an accident or mechanical breakdown.

Liability Only Coverage: Liability only coverage, mandated in every state, covers damage to another vehicle and the medical expenses of the passengers in the vehicle in the event that the driver of the covered vehicle is found to be at fault in an accident. It is important to check to see what the minimum limits of liability coverage are required by the state.

Considerations for Fleet Coverage Insurance

When looking to purchase fleet insurance, it is important to check the reputation of the insurance agent from which the coverage is purchased. Other areas to investigate are the amount of time the insurer has been in business and their customer service policies. Many discount insurance companies offer extremely low rates, but are nowhere to be found in the event a claim is filed. If the cost of the policy is an issue, it is much better to go with a fleet insurance coverage company with a higher rate and then take advantage of the available discounts.

Many insurance companies offer discounts for alarm systems, housing the vehicles in a garage overnight and for continuing driver safety education. Additionally, it is important to check driving records of those who are going to drive the vehicles to ensure the drivers do not have multiple tickets and accidents on their record as these incidents on the person's Department of Motor Vehicle Records will result in higher premiums. Limiting the number of people who are driving the insured vehicles will also help to keep premiums lower.

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Reported Trends in Cargo Theft: How Not to Get Caught Out This Holiday Season

Statistics compiled from CargoNet and its associated partners as part of a larger survey in America show that consumer electronics, food and clothing are the three most stolen types of cargo; whilst truck stops and rest areas are among the locations that are most frequently targeted as part of organized cargo theft. During the Christmas period, more cargo of these types is being shipped, giving organized cargo thieves greater opportunity.

Theft from these locations accounts for almost a third of all cargo theft incidents, according to statistics published by Chubb. These are then followed by modal yards and unsecured locations such as drop lots and parking areas near hotels, motels and restaurants. This adds weight to the advice that Marine Cargo Insurance Brokers have been giving to shippers and business people all season. You you should always know where your cargo is and you must ensure that if any part of the transportation of your goods is subcontracted to another party, that your security requirements are signed off upon.

The reason for this is that once part of the transportation process is sub contracted, this area of work can then be sub contracted further until you have no idea as to who is responsible for your cargo and neither will you be aware of the security standards and safeguards that they have in place.

One such example was cargo container 307703 which arrived on the western edge of Genoa. It was found to contain a cylinder housing a slowly alchemizing pellet of Cobalt-60, which irradiated everything in the vicinity up to over 25 meters away. The history held for the movement of this container was sketchy and the records show that it had gone missing for a period in Saudi Arabia.

In signing off on your security requirements, the companies that are contracted to transport your cargo accept all liability if their security standards are found to deviate from your requirements. So in the event of theft or cargo loss due to their negligence, you will be covered by them. If their own security standards meet the requirements of both you and your Cargo Insurance Policy, then in the unlikely event that something untoward should happen to your goods, you should be able to make a successful claim.

For goods that are travelling over long distances, a more comprehensive insurance policy should be in place. Marine Cargo Insurance provides cover for cargo moved by air and sea, whilst Goods in Transit Insurance covers those goods moved over land. So for those shipments that travel over land, by sea and by air, a combination of both policies ought to be in effect.

The problem when shipping cargo, is that over longer distances, many transport types may intervene and it is when cargo changes hands that it is at its most vulnerable. Recently, a shipment of televisions was stolen in California; but because the shipper had taken the necessary precautions and knew where their cargo should have been, the local police were then able to limit their surveillance to 140 suitable storage locations. Combined with information received from CargoNet, the investigation led to the recovery of the goods valued at over $1million, as well as the recovery of items from seven other thefts including clothing, electronics and household items.

It just goes to show that taking these preventative measures really does make a difference. With the advent of CargoNet back in 2010, more actionable information can now be handed to the authorities when incidents like this arise, making it harder for organized cargo thieves. Unfortunately, CargoNet is primarily an American initiative and so for those shippers that do not regularly ship to the US, it is still highly important that pre-emptive action is taken. Securing confidential cargo information, conducting employee background checks and ensuring that you are covered with comprehensive Marine Liability Insurance and Goods in Transit Insurance is key. If you are unsure of what sort of cover is best suited to you, you need to speak to a specialist Marine Insurance Broker

Maintaining cargo security continues to be a focus, particularly with the threat of terror attacks being ever present. Yet, as the industry progresses its work with the authorities and shippers better educate themselves on their own cargo security, the industry can expect future reductions in their own cargo losses.

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Small Business Insurance: Covering Your Mobile Devices

The way we do business and communicate with one another has changed drastically over the past decade.

Once, where a simple Filofax would have sufficed, we have seen an evolution in the way we work; field agents began to adopt the PDA, the first laptops began to appear... and then we saw an explosion in mobile technology that has resulted in ever more advanced and expensive devices gracing the messenger bags and briefcases of business people across the country, from Notebooks, to tablet devices all the way through to smart phones.

What many business people forget however, is just how much all these devices are worth. For the better equipped employee, we might see a notebook or laptop, an iPad and a Smartphone of some sort... and already we're looking at a total cost of between £1000 and £1500. What's more, is that these devices are carried around every day, bouncing around inside bags, used on the trains, carried through the wet British weather in less than waterproof cases and covers.

There are few businesses that could lose a number of these devices and chalk it up as an insignificant loss. For smaller businesses, equipping just one employee in this fashion may cost at a significant proportion of their profits. As such, it is important to have these devices covered against the usual consequences of ownership, potential theft, loss, accidental damage... All of these things can, and do happen.

To make things even more difficult, many insurers will have complex clauses that define 'accidental damage' and other such mishaps in such a way, that if you were to damage your beloved iPad you may find you are still not covered, because of insufficient device protection for example or because of the nature of the accident.

It is important therefore to shop around for the business insurance that best covers you, your field agents and your costly mobile devices. Take the time to understand the level of protection you have to avoid any unexpected expenses and bother. Talking to an expert business insurance broker can help, where they will trawl the market to find you exactly the kind of cover you need to ensure that your employees can continue to work, whatever happens. Failing that, you could always pay the full amount for continual replacements if you choose not to take out an insurance policy, if you can afford to do so you're doing remarkably well in such tough economic times!

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Intellectual Property - A Growing Concern for Many Types of Businesses

A few weeks ago, a prospective client approached our company seeking Intellectual Property Coverage. He did not fully understand the coverage but was adamant that a policy be issued as quickly as possible. Of course this raised some red flags. Upon further discussions, it was noted that his software company was being sued for copyright infringement from a US based company. Since there was a pending litigation in place, we were unable to assist in providing coverage and suggested he contact law firms that specialize in Intellectual property disputes. This unfortunate incident could have been avoided if his current insurance broker and the client took the necessary time to fully understand the business model and possible exposures. The policy issued to this client was a standard CGL policy covering premises liability and specifically excluded trademark, patent and copyright infringement. In today's fast paced & uncertain economic environment, intellectual property suits involving infringement of trademark, copyright and patents are being filed and litigated at alarming rates with crippling costs to both parties involved.

So what exactly is Intellectual Property? It can be broken down as follows:

Industrial property - includes inventions (patents), trademarks & industrial designs Copyright - includes literary & artistic works such as articles, novels, drawings, paintings, designs.

These exclusive legal rights allow the owners of intellectual property to prosper from the property they have created, thus allowing a financial incentive for the creation and investment in their intellectual property. However, many new start-ups in addition to small and medium sized companies do not fully understand their benefits or potential implications. These organizations may have very valuable rights but are unable to use them effectively while others are unintentionally violating intellectual property rights of others without being aware of costly legal ramifications.

Some important terminology was used above and should be explained further.

Patents - Cover new inventions including process, machine, manufacture or any new and useful improvement of an existing invention.

Trade-marks- Provide exclusive rights to word(s), symbols and designs to distinguish goods or services from others in similar marketplace.

Copyright - Only the copyright owner, often the creator of the work, can produce, reproduce, or grant permission to others to do so.

As technology moves ahead at lightning speed, it has made it increasingly easy to reproduce countless types of materials that are subject to copyright. Companies must be very careful not to infringe on the rights of others. Penalties for trademark, patent and copyright infringement have become very costly and will damage the reputation of these companies on a world wide scale. Up until the mid 1990's, the primary assets of most companies was their building, equipment, stock etc. Not anymore. Although these items still are very valuable, intellectual property, computer data, customer information are just as valuable and could lead to financial hardship if they are not protected with proper security measures and specific insurance coverage's.

When dealing with the various forms of IP, it is advisable to seek out a lawyer/law firm that specializes in copyright, patents, trademarks, or trade secrets. They should fully understand your business model and your technology as well as you do while being able to explain the legal issues in this complex field in clear, practical language that you can understand.

Another important way to protect IP is to obtain Intellectual Property Insurance. This coverage protects companies for copyright, trademark or patent infringement claims arising out of the company's operation. An Intellectual Property policy will pay the costs to defend you if someone tries to claim the rights to the same business model, process, or application. As long as the company is not aware of any pending litigation, infringements or violations, one can apply for insurance to protect your trademark or patent. Very few standard insurance policies protect businesses from loss or damage to their intellectual property. Similar to seeking out a prudent lawyer, it is just as important to seek out a company that specializes in this type of insurance. Make sure the policy is not limited to your specific province or state but rather on a worldwide basis. With more and more insurance companies entering this market, it should be rather easy to obtain a policy that fits your exposure.

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The Importance of HGV Insurance for All Parties Involved With Hauling Heavy Loads

HGV insurance is specifically designed to protect the owner of the Heavy Goods Vehicle and/or business, the driver and the contents - contents that often belong to a third party.

Understanding which vehicles need HGV insurance and why, can save you or your business from encountering an unaffordable lawsuit should an unfortunate incident occur involving the truck.

What is classed as a HGV vehicle?

Any vehicle that weighs more than four tons is officially a HGV. Hauliers carrying large goods on pallets are usually operating in a HGV. In some cases HGVs are used to transport livestock or other 'unusual' goods which may require a special HGV insurance policy.

What is the extent of the cover provided?

All HGV insurance policies will cover the vehicle for damaged caused to others in the event of an accident as standard. Additional extras can be added to provide cover for damage to truck, damage to the contents and theft of either the truck or the contents. Some policies include Goods in Transit insurance but this is a separate policy to HGV insurance and is not adequate enough to cover truckers on its own.

Are Heavy Goods Vehicles at risk?

Trucks hauling large amounts of valuable goods are big targets for hijackers and thieves. Recently in the UK there has been a growing concern regarding fuel theft from HGVs too. The correct HGV insurance policy can be found through a broker to cover your truck(s) for all types of theft.

Purely as a matter of size, HGVs are at more risk than the standard car or van. The wind can effect these high-sided trucks on the motorway, they require exceptional skill and concentration to control and a lot of roadsters are unaware of the dangers of driving alongside a HGV - if a collision was to occur, it could cause serious damage to the other driver and the compensation payout could be huge.

Is HGV insurance expensive?

Basically, you want a HGV insurance policy to cover your trucks, staff and contents - a lot of additional extras may not apply to you and these are what make some quotes so expensive. Utilising the expertise of a qualified insurance broker is the best way to matching your business circumstances to the exact amount of cover you need, saving a lot of money.

Equally, you may be operating a HGV business involving the transportation of chemical or hazardous materials. You can also benefit from using a broker to find a truck insurance policy that covers you adequately and inexpensively for this type of cargo.

HGV insurance can cover your business for a lot of different issues that are unique to the trucking industry. It can also reassure your clients that their freight company is insured and their products should be covered while in transit.

Speak to an expert insurance broker to find the right policy and you can save a lot of money by only expending on additional extras that are specific to your particular business.

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Hired and Non Owned Coverage For Truckers

It is easy to find an explanation of Hired and Non Owned coverage from a business auto perspective, but there are not many good examples of this coverage from a trucking stand point. If you are in the trucking business you will often broker a load to another trucker, whether it is because you are too busy, or you don't have the right equipment, brokering is everywhere in the trucking business. What you may not know, is that when you broker that load out to "John's Trucking" you are liable for an accident as well. Furthermore, most truck insurance policies don't have coverage for this exposure. Let's go into more detail.

It is the busy season and you are having to broker loads in order to keep your customer happy, whether it be dirt, sand, gravel, freight, reefer goods, general freight, cars, boats, it doesn't really matter; you are opening yourself up to a big liability exposure that most truck insurance policies don't cover unless requested. The exposure I want to discuss doesn't come into play frequently, but when it does come into play it is always a significant sum of money that would put most companies out of business.

Although the sub hauler has coverage of let's say $1 Mil liability limits, what happens when the attorneys and the courts want to go after more money than is available on your sub hauler's limit. Bingo, they name you (the broker) on the lawsuit as well. They can do this because their truck was in that location at that time because you dispatched the load to them. The courts have proven over and over now that, if you broker the load and if that sub hauler's limits are exceeded you are liable and your company will pay. Most people would say no big deal, my insurance should cover that, right? The only way your company will cover you for this exposure is if you have "Hired & Non Owned" coverage in force at the time of the loss. This coverage is usually equal to your liability limits.

Most trucking insurance companies will add this coverage when requested by the insured, but many insured's do not add the coverage when they find out how much it costs. Like anything else in the insurance world, if the possibility of paying out large sums of money is high the coverage will be expensive, and Hired & Non Owned coverage is no exception for large scale brokers. If you are just a Mom and Pop trucking company with an occasional load being brokered this coverage averages around $500 per year. If you are a large broker with 1099 going to sub haulers exceeding $500,000 per year, it is usually based on a percentage of the gross sub haul expense. Cost for this coverage will vary from 1% all the way up to 5% of the cost of the sub haulers, pretty steep especially if you are not getting a percentage for a trailer lease. Although many companies broker large amounts of business with no coverage for this exposure, sooner or later most large broker's will directly or indirectly have an experience with this coverage which causes them to factor this insurance expense into the cost of brokering loads.

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How Universal Life Insurances Work

One can easily be confused when searching information on life policies, as there are various types and subtypes, each with its own name and characteristics. For a start, let us clarify where universal life insurances stand: they belong to the category of permanent life policies. Permanent insurances pay off at the death of the policyholder and they require relatively higher premiums than term insurances, but the benefit is also more consistent. What makes universal life insurances more flexible and more profitable than the other types is the fact that they have cash value. They are deemed to be even more affordable than whole life insurances, another subtype of permanent insurances.

Universal life policies are also divided into two types: variable universal life insurances and indexed universal life insurances. Practically, these policies work on the basis of cash accounts where real money is deposited. A portion of the premiums paid every month is delivered to this account, thus making it increase value perpetually. When the policy comes into effect (in the event of death), a part of this money helps to cover mortality charges and other administrative taxes. After all the above mentioned expenses are paid, the remaining amount in the account is the actual "cash value".

Though universal life policyholders benefit from flexible premiums, the success of these insurances depends largely upon interest rates. If the interest rates are high, the premiums are reduced by the dividends. If they are low, then higher premiums are required in order to maintain the cash account. Unlike other types of life policies, where a fixed premium is paid monthly without the client knowing what the company actually does with the invested money, universal life policies have another element of surprise: transparency. Apart from the investment element, the policyholder is allowed to see what the expenses covered by the cash account are for. Since one can grasp the meaning of these expenses, it is also easier to readjust the policy options if necessary.

With all this freedom, what purpose do these insurances serve? Generally, they are suitable for protecting a business or an estate, but they can also help fund a retirement plan. Compared to whole life policies, the lower costs also add to the appealing character of universal life policies. However, there is also a drawback to be considered, namely that flexibility can determine one to pay less and thus receive a payout sum of a lower value than expected. Whatever your situation, it is your duty to look for the best offer and, when found, to keep a constant rhythm of your payments in order to benefit from a consistent profit.

Save Up to 60% on Life insurance Policy.

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It's a Broker's Job to Select the Right Type of Truck Insurance for You

Any business that uses a lorry (or fleet of lorries) for distribution will need to find the right type of protection in order to optimise protection and minimise price. Insurance brokers have the contacts and skill to negotiate for the cheapest quotes with no sacrifice in indemnity, on behalf of trucking companies.

Firstly, all vehicles that travel on public roads are mandatorily required to be insured by law, at least for third-party liability. The two standard forms of truck insurance are as follows:

Fully comprehensive - This covers the truck(s) for all damage or injury sustained as a result of an accident involving the truck(s). It covers all parties involved in the accident.

Liability Coverage - This covers only the third-parties involved in an accident with the truck(s). Quotes for liability coverage are usually much cheaper than those for fully comprehensive insurance.

Note: If a business does not own the trucks entirely and is lending vehicles instead - they must have fully comprehensive insurance.

It is up to the business owner to determine which of the two options is best suited to their needs and budget. However, a lot of insurance applicants can struggle or be caught out when it comes to the optional extras insurers include in certain packages:

- Umbrella package for fleets - Most insurers will offer their fleet quote as one standard quote to cover all vehicles. This is usually a discounted price but may be buffered up initially to cover trucks of different ages and values.

- Singular truck insurance for fleets - Some insurers will cover the individual trucks within a fleet separately though they may still offer a discount for acquiring the business of the whole fleet.

- Roadside assistance - This product will provide help for stranded drivers and broken down vehicles. On-site repairs and towing is included to minimise productivity which would otherwise be halted should a breakdown occur. Though roadside assistance can be acquired through other sources than the insurer, it may be a good idea to opt for this product as part of a package to encourage a potential discount.

- Goods in Transit - This product is available to all types of transporter but when it comes to trucks, the goods are likely to be heavy and potentially more expensive. The product covers goods up to a certain value but can include several different clauses to be aware of within the contract.

There are many more unique products which different insurers like to up-sell to applicants and it's a lot to take in, especially when starting up a new trucking venture. Insurance brokers specialise in negotiating with insurance firms to skew package deals to suit the needs and budget of the client.

Certain products can cover legal costs and even down-time profit loss but such additions may not be necessary for different businesses. Without the assistance of a qualified lorry insurance broker, businesses could end up paying inflated premiums for a package full of products they may never need.

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Excess and Umbrella Liability Insurance

These two types of policies provide additional liability limits over and above the underlying General Liability policy, Auto Liability policy, and Worker's Compensation policy. Sometimes these policies can be endorsed to extend above other policies but these are the three main policies.

The marketplace tends to be very confusing when it comes to Excess Liability and Umbrella Liability contracts as many times the words are used interchangeably and technically these two coverages while very similar, but can be very different. Both the umbrella and excess form may or may not have self-insured retention limits. This is basically a deductible, usually referred to as SIR, self-insured retention. If the policy has this deductible usually it is $10,000.

All things being equal, if that is even possible, the umbrella policy is normally always broader in coverage in scope than the excess policy. The excess policy usually states that it is a following form. That means that the excess policy has the exact same coverage as the primary general liability policy. So, if the primary liability policy has coverages and exclusions and limitations the excess contracts will have those same coverages, exclusions and limitations within the excess limits that are being offered. Sometimes the excess policy can be written so that it is a self-contained policy. This means that the excess policy contains with in its own policy contract provision for its own limitations, coverages and exclusions. That can be very confusing for the consumer to try to meld together a primary liability policy and excess liability policy that has inherent different exclusions, coverages and limitations. Sorting all that out at claim time can be extremely dangerous and resulting in gaps of coverages. A true umbrella policy can sometimes drop down to the self-insured retention limit to pick up some liability claims that might not be covered in the primary liability coverages.

Most policies in the marketplace today are written on an excess basis and not on the true umbrella bases. As a consumer, it would be wise to make the assumption that even if the verbiage says umbrella policy that it probably is more likely to be an Excess policy that follows the underlying primary liability policies coverage, limits, and exclusions.

Usually these umbrella and excess policies having an insuring agreement that promises to pay the "ultimate net loss" that exceeds the underlying limits for the primary liability policy. It is important to identify within the policy for verbiage as to how the carrier defines ultimate net loss. Usually it is the insured's legal liability in totality for a claim that is covered and it may or may not include defense cost within the limits. Excess and Umbrella policies are typically written on and an occurrence type bases which means it is triggered from an accident that includes the continuous or route repeated exposure to basically the same harmful conditions or events. Sometimes the coverage might be exhausted on the primary policy with regards to the defense cost. The umbrella and/or excess policy might drop down provide more defense coverage limits but not necessarily pay for damages.

It is very important that the umbrella and excess policies are concurrent with the primary liability policy. This means they both should have the same effective and expiration date. This can cause gaps in coverage if they have different start and finish dates. All policies have coverage territory limits and exclusions. It's important to reconcile that the primary liability policy and the umbrella/excess policies have the same coverage territory provisions.

As the insured, it would be prudent to know in advance whether you have an excess policy or an umbrella policy in your portfolio. Making sure that your underlying and excess/umbrella policies are concurrent on the policy dates is also of extreme importance. Finally, making sure that both the primary and the excess/umbrella policies have complementary coverages, exclusions, and limitations will prevent gaps in coverage.

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Nature's Havoc Points Up Necessity Of Reviewing Insurance Coverage

The first five years of the 21st century have been marred by enormous amounts of property damage from natural causes - tornadoes in the Midwest; hurricanes in the Southeast; fires, landslides and earthquake rumblings in the West; and drenching rain and flooding in the Northeast.

A U.S. Department of Commerce estimate of damage caused solely by Hurricane Katrina underscored the magnitude of these financial losses. The report stated that insurance payments would be in many billions of dollars; property losses not covered by insurance were estimated to be more than those insured.

Underinsurance has been confirmed as a major problem for owners of both commercial buildings and dwellings in the wake of recent hurricanes, tornadoes, earthquakes, out-of-control fires in dry areas, and flooding. Although coverage requirements by banks and other lenders assure the existence of property coverage, it does not always assure replacement cost limits. When a mortgage is paid off, the need for ongoing attention to appropriate insurance becomes even more significant.

The adjustment process has revealed dwelling coverage limits below the usual 80% requirement for replacement cost and commercial building limits not written to meet the applicable coinsurance limit. Rebuilding costs following future storms and other catastrophes will reflect sharp increases in the price of building materials, labor, and new construction standards required by strengthened building codes. Insurance limits must keep pace with these costs of rebuilding.

Commercial buildings and contents are subject to virtually the same exposures and coverage considerations as dwelling buildings and their contents, with several important options. Recent catastrophes have made it clear that many small businesses have not carried loss of earnings (business interruption) insurance. Without continuing income, they are unable to survive. Employees are lost when the downtime appears to have no end. Rebuilding is delayed when a small number of contractors are sought by the many who need them. A business owners policy is the answer for many eligible small businesses because it includes coverage for loss of earnings due to an insured hazard on an "actual loss sustained" basis.

Accounts receivable insurance has proved to be of great value for those who do extensive business on a credit basis. Valuable papers coverage is of equal importance. It can make a big difference to many professionals such as pharmacists, accountants, attorneys, physicians and hospitals. The protection includes the expense of reconstructing records as well as covering financial loss.

Despite continuous public advertising efforts by the National Flood Insurance Program and coverage explanation by insurers, agents and brokers, many people who needed flood insurance did not have it when their property was damaged or destroyed by flooding. Flooding caused by rising groundwater is not covered by the homeowners policies and commercial property policies carried by most insureds.

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The Importance Of Fleet Insurance

Any company that uses vehicles as part of their business will need to have the right kind of insurance. Choosing the kind of fleet insurance you need will depend on a number of different factors. Every state has their own requirements that need to be met if a vehicle is to be operated on public streets; however, additional requirements will need to be met in some circumstances.

For example, a company that provides transportation of any type to their clients or customers will likely need to have higher insurance coverage. It is essential that customers who trust a company to provide transportation are adequately protected in the event of an accident or injury. This includes companies that operate shuttle services, taxi cabs, limousine service, or any other type of service that involves operating a vehicle with customers on board.

While each state will vary according to the required insurance and minimum coverage amounts, every state will require fleet insurance of some type. The best way to find out what is needed for your particular business and location is to speak with a knowledgeable and experienced insurance provider. Insurance agents that are accustomed to writing fleet insurance policies will know how to help you maximize your coverage while keeping premium costs as low as possible.

When looking for fleet insurance for your company, be sure to speak to several different insurance providers. Just like with your personal automobile insurance, insurance rates for businesses can vary tremendously. It can be very cost-effective to spend some time comparing different policies and rates offered by various agencies. The important thing to remember is that you need to be sure that you are comparing similar policies. As deductibles go up, premiums often go down; the same is true with policy limits and coverage amounts. This makes it essential that you are looking at policies with the same deductible and limits.

Of course, comparing the different premium costs is just the beginning when trying to find the right fleet policy for your needs. It can be extremely important that the company you choose is one that offers great customer service. Check on the company's claims department and find out how long it usually takes to get a claim resolved. An insurance provider that leaves you waiting for weeks or months before a claim can be settled might end up costing your business a lot more than the minimal savings you found with a less professional provider.

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Plumbers Insurance and Liability Risks

If you are a plumber then it is essential that you have at the very least, plumbers public liability insurance in place.

This insurance offers protection for you and your plumbing business against any damage or loss that you might cause to other people during the course of your work. This includes any damage or consequential loss that may occur to your clients due to your negligence either whilst on their premises or as a result of your work.

Without public liability insurance in force a plumber is wide open to being sued for damages by members of the public for all sorts of risks that plumbers expose the public and themselves to.

Plumbing by its very nature can be hazardous with the use of two major perils, fire and water which can cause damage to clients property.

Water escapes due to faulty work can be serious and costly to repair. Similarly the use of heat with blow-torches for soldering copper pipes in confined roof spaces, has been known to cause major fires.

All plumbers insurance policies and packages in the UK will include public liability insurance as standard cover at the minimum level of 1,000,000, which can be increased to 10,000,000 for plumbers working on large projects and Government works, where the risks of doing greater damage are higher.

If your plumbing business employs any workers, even on a part-time, temporary or sub-contractor basis, it is a legal requirement that you have Employers Liability insurance cover in place. This protects your business against being sued for damages by an employee, if any of your plumbing workforce is injured or suffers a loss whilst engaged on plumbing duties for your firm.

Most standard plumbers insurance liability packages will include the option to add your plumbers tools and equipment to the policy. These can be covered on a new for old indemnity basis where you can choose the level of cover you require.

A further type of liability cover for plumbers is products liability, which protects against claims from the public and clients for any faulty products you supply that cause loss or damage.

Other options that can be added to a plumbers policy are goods in transit cover which protects against damage to parts and materials whilst in transit to and from a site, and personal accident cover that pays out an amount if you or your staff are injured at work.

Finally all plumbers will need business van insurance. This is usually available on a separate motor insurance policy which does not include tools or goods cover.

The Internet provides a valuable resource for researching plumbers insurance quotes and covers online. Shop around and compare premiums and the time spent can be well worth the savings that can be made for a small plumbing business.

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Ways to Reduce Risk Sharing Expenses

To ensure the continuity of business operations, more companies are analyzing their risk factors that could negatively impact the business. While the field of risk management is increasing in popularity, companies are looking for ways to implement and control costs associated with risk management processes. One risk management technique is to share the risk with a third party through risk transfer. This usually occurs when companies utilize insurance carriers to transfer risk of unexpected losses or damages. Analyzing risk transfer is important to reduce the adverse financial impact a loss could have on a company. Additionally, minimizing expenses associated with risk sharing (e.g. insurance premiums, broker commissions, and administration costs) can increase profits on the income statement. A careful balance of controlling expenses, while maintaining the company's risk sharing goals, is necessary.

ANALYZE INSURANCE NEEDS:

When risk managers look to transfer risk to an insurance carrier, an in depth review of a company's operations, risks, and legal obligations is essential. A review of the vital operations generating revenue against risk exposure, frequency, and severity will help to determine the areas that a company will want to reduce or transfer the risk. With this information, a company is able to determine ways to protect its assets used for generating revenue, thereby reducing the risk of business interruptions. Potential risks include property damage, employee injury/health, product defects, damages caused by negligence, and auto collision. Insurance is a way to share the risk with a third party, usually an insurance carrier.

Common Commercial Insurance Coverages:

• Property Insurance • Business Income • Crime • Equipment Breakdown • Inland and Ocean Marine • General Liability • Automobile Insurance • Workers Compensation • Professional Liability

These coverages are usually grouped together into a business package policy. Package policies are convenient and may reduce premiums if more than one line of coverage is purchased through one company. Another area risk managers should review is the legal considerations for the municipality where they conduct business. Insurance regulation is different from state to state, and certain requirements may be needed for business operation (e.g. workers compensation insurance, auto liability minimum limits). If a company fails to meet these regulations, they may face fines, penalties, or lawsuits.

COST BENEFIT ANALYSIS:

Risk managers look at the cost and benefit of risk sharing to determine which risks a company will retain and what risks they will share with a third party. The expenses associated with risk sharing include insurance premiums, broker fees, administrative costs, and personnel costs. The main benefit of risk sharing is to protect the company's assets from risk of loss that would affect business continuity. If a company decides to retain risk exposures, the expenses from risk sharing would be retained, thereby increasing cash flow. The downside is that, if a catastrophic loss occurs and the company is not in the financial position to cover the loss, the business may fail.

Issues outside the risk manager's control may affect their cost benefit analysis and should be considered during this process. Various issues that a risk manager may encounter during their analysis include budgets set by upper management, legal requirements by jurisdiction, and the company risk financing goals.

WAYS TO REDUCE INSURANCE COSTS:

As companies look to reduce expenses, departmental budgets become tighter. Risk management departments are no exception to this trend, and risk managers are looked upon to control risks efficiently. The technique of risk sharing is beneficial, but is not without expenses that can add up if not managed properly. There are several areas to review for wasted costs within the risk sharing/transfer process.

One would start with a review of its own administrative costs for risk sharing. One may examine if an employee is educated in their position, if there are several personnel covering the same job tasks, if tasks are able to be outsourced to a more efficient company that specializes in risk transfer analysis.

A second area to review is the costs associated with insurance brokers. Commission on the sale of insurance policies usually compensates insurance brokers. For larger companies that invest a significant amount of money in risk sharing, these commissions become hefty. A risk manager should periodically review service level agreements to determine if they are being met. An analysis of the broker costs should be compared against the broker's level of service and benefit to the company.

A third approach is to analyze if there are ways to reduce insurance premiums without significantly sacrificing coverage of risk. Business insurance policies may have overlapping coverages that can be eliminated to reduce premiums. Another way to reduce costs is to increase self-retention through the increase of deductibles. Many carriers provide discounts to companies with high functioning risk management programs. It may be worth implementing risk management programs that reduce a company's risk level.

SUMMARY

Insurance provides benefits to businesses as it reduces the financial uncertainty from losses covered under the insurance contract. The role of the risk manager is to ensure business continuity by reducing risk and/or planning for risk. When company budgets are strained, efficient risk management is imperative. With the reduction of risk, a company will be able to forecast long-term budgets with more accuracy. This allows upper management to review relevant financial data to make well-informed decisions.

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