Liability insurance will protect business assets in the event the business is sued. These days, with lawsuits clogging the courts, a business owner should maintain a proper amount of liability insurance to protect the business he or she has worked so hard to build. Any company can be sued for something it did — or even didn’t do — that resulted in injury or property damage to someone else.

The expenses of defending yourself or your business against a lawsuit without insurance can be a substantial cost to you, regardless of whether or not the lawsuit has merit. Liability insurance will cover the cost of damages along with the legal fees and other costs associated with your defense in a lawsuit. In addition, many customers will demand that their vendors hold liability insurance.

“We require our vendors to carry general product liability insurance,” noted Taras Szmagala, attorney for Eaton Corporation. “Like most large companies, Eaton expects that its vendors will stand behind their products, and insurance is an important way to do that.”

Liability insurance will not protect you against claims arising from nonperformance of a contract, wrongful termination of employees, sexual harassment, or race and gender lawsuits. Usually a surety bond is taken out as performance insurance. Employment practices liability insurance (EPLI) protects your business against employment-related claims, such as sexual harassment.

Many small businesses have difficulty figuring out how much liability insurance they need. There are some guidelines to consider, but no standard formula. Determining the amount of liability insurance to buy is an important task, since the sky’s the limit on lawsuits. A business owner can use a recent liability settlement in a related business as a guide, or the amount could be based on the total assets of the business.

Some occupational licenses might require a set amount of liability insurance. If a business owner rents a business property, a set amount of liability is often required and is stated within the lease. The business owner should purchase an amount which they can reasonably afford, because the cost of insurance will be far less than the cost of a lawsuit.

Business owners policies

Many insurance companies have bundled property and liability coverage into what’s commonly called a business owners policy (BOP). It allows the business owner to obtain broad coverage with affordable premiums.

Business owners who have a BOP will also want to consider adding additional coverage that may not otherwise be included. Property insurance can be tailored to fit the needs of a certain business since no two businesses are the same.

For example, a restaurant has different needs than a furniture store while a retail business with a lot of customer interaction and builders who are contractually obligated to erect an office building may face a greater amount of liability than a two-person accounting office. Therefore, liability above and beyond a BOP package should be considered.

The above article is meant to give a general overview of insurance policies; exact coverage and terminology could vary by insurance company. Please refer to your policy for exact coverage details and terminology.

Few things in life are riskier than launching and running a business. Neglecting business insurance needs can compound those risks. Protecting a business from financial disaster will not only preserve all the hard work and long hours that was put into it, but will also give the business owner some peace of mind.

A business owner has three types of small business insurance to consider, including one that is mandatory. Business owners who have employees must provide state-mandated coverage for injuries and illnesses that are job related through workers compensation insurance. While it is not mandated by law, business owners should also purchase business property insurance and liability insurance. Business property insurance will cover property, equipment and inventory while liability insurance will protect the business against potential liabilities in this litigious society.

Cleveland attorney Oleh Mahlay warns, “In this day and age of liability and lawsuits, a business owner can ill-afford to ignore insurance relative to their business.”

Small business property insurance

Property insurance can be purchased on the basis of the property’s actual value (the replacement cost minus depreciation), its replacement value (the cost of replacing an item without deducting for depreciation), or on an agreed-upon amount (commonly used for art objects and other unique items).

Basic property insurance will generally cover a business owners’ losses in the event of a fire or a lightning strike, and will pay the cost of removing property to protect it from further loss. Additionally, a standard small business policy will usually cover losses from windstorm, hail, explosion, riot and civil commotion, and damage caused by aircraft, automobiles, or vandalism.

Optional coverage can insure against earthquakes, floods, building collapse, and glass breakage. Property insurance can be categorized by what is insured and by the events leading to a loss.

The Independent Insurance Agents of America offers a checklist:

• Buildings and other structures, leased or owned
• Furniture, equipment, and supplies
• Leased equipment
• Inventory
• Money and securities
• Records of accounts receivable
• Improvements and betterments you made to the premises
• Machinery
• Boilers
• Data processing equipment and media, including computers
• Valuable papers, books, and documents
• Mobile property, such as automobiles, trucks, and construction equipment
• Satellite dishes
• Signs, fences, and other outdoor property not attached to a building
• Intangible property (goodwill, trademarks, etc.)

(NAPS)—If, like many Americans, your family car is also used for purposes that could be considered commercial use, you may want to steer yourself into a chair and look over your insurance policy.

You’ll need to consider buying a commercial policy or making sure that your existing personal auto policy covers the vehicle for business use. Whether or not you need a commercial policy depends on how you use your vehicle and what company you have it insured with. Every company has different guidelines and may surcharge for business-use coverage on a personal auto policy.

If you’re not sure whether business use is covered on your personal policy, it’s important to call your insurance company or agent. The Progressive Group of Insurance Companies has put together these four questions you may want to ask:

• How do companies determine commercial use? One definition could include “engaging in transporting goods for compensation or a fee,” which includes pizza or newspaper delivery, catering, door-to-door consulting services, landscaping or snowplowing services, logging business, day care/church van services or farm-to-market delivery. People who do these kinds of work should consider purchasing a commercial vehicle policy.
• Do you need more liability coverage than a personal auto policy provides? Generally, a commercial auto policy offers higher limits of liability, but less or no coverage in areas that are typically not associated with commercial auto risks.
• Do you need special coverage for situations encountered while conducting business? Commercial auto policies usually offer these coverages, and they’re normally not available with personal auto policies. These include hired and nonowned auto coverage and coverage for towing a trailer for business use.
• Do you need to list any employees as drivers? Commercial auto policies allow you to list anyone that you employ. You don’t have that option with a personal auto policy. In general, you’ll need commercial auto coverage if the vehicle you use is owned by a corporate partnership or driven by employees, or if it’s used to haul tools or equipment weighing more than 500 pounds, make deliveries or heavy enough to require state or federal filings.

For more information about commercial auto insurance, visit progressiveagent.com.

Did You Know?

If, like many Americans, your family car is also used for purposes that could be considered commercial use, you may want to steer yourself into a chair and look over your insurance policy. For more information about commercial auto insurance, visit progressiveagent.com.

(NAPS)—For many business owners, the road to success cannot be driven without vehicles. They are component of the continued operations and are essential to the company’s livelihood.

And just as you’d never consider going on a job without all the necessary tools of your trade, you should never consider driving your business vehicle without the right insurance coverage. But finding the right commercial auto insurance company can be a tricky proposition. There are lots of companies offering commercial auto coverage, so it’s important that you select one that meets the needs of your business.
Of all the factors you’ll want to take into account, the company’s experience with commercial auto insurance and claims service will have the biggest impact on you and your business. Here are some questions to ask yourself as you consider different commercial auto insurance companies:

Do they have experience with your business type? How long has the company offered commercial auto coverages? Do they understand the insurance needs that are unique to your line of work? A carrier with commercial auto expertise ensures that you’ll get the right coverage for your business.

Do they excel in customer service? You need 24/7 service
that is fast, accurate and focused on your bottom line. You also need the convenience of being able to handle your insurance business on nights and weekends, because you can’t count on having the time to deal with such matters during regular business hours.

Do they offer flexible, competitive products? Payment options? Insurance rates can vary a great deal from company to company, so you’ll want to compare. You want flexibility in the types of coverages—and also payment options. Monthly bill plans can help small-business owners maintain necessary cash flow.

Do they have a demon- strated record of claims experience? Keeping vehicle down-time to a minimum is vital to any business. Each minute a vehicle is out of commission affects your bot- tom line. Look for a company that’s known for efficient claims service and fast, fair resolution.

To learn more about commercial auto insurance or to find an independent agent, visit the Web site at www.progressiveagent.com.

Bob, the owner of a small flower shop, answers the phone prepared to take an order. Instead, he learns his only delivery van was involved in an accident. Questions flood his mind. Is anyone hurt? Is the van damaged? How will I make my deliveries?

Without commercial auto insurance, a business like Bob’s could take a big hit when a crash happens. Standard auto insurance doesn’t always offer the protection most businesses need.

Ask these questions today to avoid insurance headaches tomorrow:

• Do you use your personal vehicle for business? This includes services that you might not think qualify. Pizza and newspaper delivery, catering, door-to-door consulting, and day care/church retreat van service are good examples of uses that are often excluded from personal policies.
• How high are your liability limits? Commercial auto policies offer higher liability limits than personal auto policies. Larger vehicles, like delivery vans, can cause more damage than passenger cars.
• Are you covered in day-to-day business situations? Commercial auto policies usually offer more coverage options than personal auto policies. These include coverage for towing a trailer for business use. Landscapers are ideal candidates for this.
• Do employees drive your vehicles? If the answer is yes, you probably need commercial auto insurance.

To learn more about commercial auto coverage, talk to your local independent insurance agent. Find an agent at www.progressiveagent.com. Go to www.progressivecommercial.com for more information on commercial auto insurance.

It is important for a business owner to take a complete inventory of all business property, determine its value, and decide what’s worth insuring. If the items that need insuring are not covered within the basic policy, adding more coverage may be necessary.

For example, a business owner will want to make sure the building is covered, as well as inventory, furniture, equipment, and supplies. Even if the business rents space, the lease may require certain types of insurance coverage. When renting property, it is important to note that while a building owner may carry all the necessary insurance on the building, the business owner’s equipment, furniture and other business possessions will not likely be covered.

“As for home-based businesses,” adds Oleh Mahlay, “You should be careful in making sure your business work area and business property is identifiable from home and leisure use. This is important not only for business purposes but also for tax purposes if you take home-based business tax deductions.”

Named-peril policies will cover certain losses resulting only from those perils that the policy names; all-risk policies offer coverage for all perils except those specifically named in the policy. An all-risk policy is usually sufficient for the average small business, but keep in mind that all businesses, and thus their insurance needs, are different.

Find a company specializing in small-business insurance

Some insurance companies specialize in small-business insurance coverage. While shopping for business insurance, a business owner should keep in mind that coverage are not always standard between companies.

A common breakdown of a small business insurance policy would include: accounts receivable coverage up to $25,000 (higher limits are available); coverage for contractors’ equipment that is both at the job site and that is in transit; building materials that will become a permanent part of the structure, plus the labor involved with completing the installation; and peak-season coverage that automatically increases limits by 25 percent during peak inventory periods.

Deductibles for property insurance can be calculated on a per- claim or on an aggregate basis. The out-of-pocket cost for per- claim deductibles is often lower, so if a business owner is in a business that has a relatively low chance of filing a claim, he or she may consider this. Companies with a lot of claims would do well to consider calculations on an aggregate basis.

A business owner should make sure the full value of an item is insured and check the terms for reimbursement. Just because a $1 million in coverage was purchased doesn’t necessarily mean the whole amount is going to be applied in a given category of property. If a company has a variable growth pattern, the business owner may want to adjust coverage annually.

People who think they don’t have to buy auto insurance in Ohio

Some drivers feel that they can be careful about driving and not get any kind of coverage at all, thus “saving money” on insurance, but as Attorney Oleh Mahlay points out “Regrettably, we still have drivers in Ohio that believe that insurance is not needed at all. If you are an uninsured driver in Ohio, you may lose your driving privileges between 90 days and up to 2 years, have your license plate and vehicle registration suspended, and incur fees upon trying to reinstate your privileges. The Bureau of Motor Vehicles does random inspections even if one is not in an automobile accident. Not only does the law require this insurance, but your failure to have insurance and proof of financial responsibility can be very costly in the future.”

Add-on features

Several supplemental auto coverage policies are available, either as separate premium items or included in augmented policies.

Rental reimbursement, a common add-on, covers vehicle rentals required because your car is damaged or stolen.

Coverage for towing and labor charges in case of a road breakdown is also common.

Gap coverage for your new car will pay the difference between the actual cash value you receive for the car and the amount left on your car loan if your vehicle is totaled in an accident.

What to do when involved in an accident

Attorney Oleh Mahlay feels that “No matter the situation, if you do get into an accident, make sure to do the following things. First, call the police and get a copy of the accident report. Look for any witnesses that may have seen the accident, and get their contact information. If you have a camera-phone or digital camera, take a picture of your vehicle and the other vehicle. Also, try to write down any information you can right away since our memories are not reliable even 24 hours after an event. If you have any physical injury at all, seek medical attention immediately. Contact your insurance company in order to notify them of the motor vehicle accident.”

Buy Umbrella coverage for your home and car

If you own a home, Attorney Michael Dobronos strongly recommends you purchase an umbrella policy that covers (like an umbrella) your home and cars. He further goes on to explain that this insurance also covers other unique situations, like sports related injuries, and items on your property, such as trampolines, dirt bikes, all terrain vehicles (ATVs), hot tubs, and swimming pools. Again, an umbrella policy is maximum amount of coverage to protect your personal assets from being exposed to litigation. More important, this coverage would pay your attorney fees and court costs, if you are sued. If you own a home, you should not be without this coverage.

The above article is meant to give a general overview of insurance policies; exact coverage and terminology could vary by insurance company. Please refer to your policy for exact coverage details and terminology.

In order to provide an accurate quote you should be prepared to provide your agent with the following basic information:

• Full name(s), dates of birth, social security number(s) and drivers license number(s) of all drivers in the household
• Year, make, model & vehicle identification number(s) for all vehicles
• Your auto insurance policy / declarations page listing your different coverage

Medical payments (MedPay) coverage will pay for you and your passengers’ medical expenses in the event of an accident. MedPay will cover expenses from accidents whether you are driving your car, someone else’s car (with their permission), or if you or a family member incurred injuries as a pedestrian. The coverage will pay regardless of who is at fault; however, your insurer may seek to recoup the expenses if someone else is liable.

With a good health insurance plan, there may be little need to buy more than the minimum required MedPay coverage. However, MedPay coverage only adds a nominal fee to your policy dependant on the amount of coverage needed. In the event of an accident, this coverage could be of great value to you and your family and should be considered when purchasing a policy.

To protect your credit, Attorney Michael Dobronos recommends you “buy at least $5,000 and probably $25,000 of medical payment (MedPay) coverage.” He further goes on to state that “this is one of the best values of insurance. I have great health insurance and I still have $100,000 of MedPay coverage due to the high cost of medical bills.”

Uninsured/Underinsured motorists coverage

Uninsured motorists (UM) bodily injury coverage pays for your injuries if you are involved in an accident with a driver who is legally liable and does not have auto insurance. Many states require drivers to hold this coverage.

Underinsured motorists (UIM) bodily injury coverage will pay for your injuries if you are involved in an accident with a driver who is legally liable and causes more damage than his or her liability coverage can cover.

Uninsured motorist property damage (UMPD) coverage, available to you for any vehicle on your policy that does not have collision coverage, pays for damage to your vehicle caused by a driver who is legally liable and doesn’t have auto insurance.

“Motor vehicle accidents (MVAs) are the number one most common cause of death of people under 45 years of age. You should protect your family and yourself by making sure that you purchase uninsured/underinsured motorist coverage,” states Attorney Michael Dobronos. “My best legal advice is to buy as much uninsured/underinsured coverage that you can afford. I recommend at least $100,000 coverage. I personally have $2,000,000 coverage. You would be surprised that such a high limit is not as expensive as you may think.

Without this coverage, you are taking a big chance that a serious MVA could bankrupt you. For example, if you are involved in a MVA that is not your fault with a UM/UIM motorist, you will not collect what you are entitled to, such as medical bills, lost wages, permanent disability, and/or pain and suffering. Given these economic times, it is extremely important coverage to have, because many people drive without insurance,” adds Dobronos.

Comprehensive coverage will pay for damage to your car that was not caused by an auto accident. Damage caused by theft, fire, vandalism, natural disasters, or hitting a deer all qualify. Comprehensive coverage also comes with a deductible and your insurer will only pay as much as the car was worth when it was damaged.

Because insurance companies normally will not pay you more than your car’s book value, it’s helpful to have a rough idea of how much your car is worth. You can find this information at these websites: Kelley Blue Book (http://www.kbb.com/) or the National Automobile Dealers Association (http://www.nadaguides.com/). If you find that your car is worth less than what you’re paying for the coverage, you’re better off not purchasing this addition to your policy.

If you are at fault in an accident, collision coverage is a beneficial asset because it will cover repairs to your vehicle. Collision coverage is normally the most expensive component of auto insurance and can bring your premium costs up. You can keep your premium costs down by choosing a higher deductible, or the portion of the claim that is not covered by the insurance provider. However, keep in mind that you must pay the amount of your deductible before the insurance company’s coverage plan begins after an accident. Also, it is important to note that usually you will not be able to collect any more
than the actual cash value of your car, which is not the same as the car’s replacement cost.

Insurance companies will often render your car “totaled” if the repair costs of the vehicle exceed a certain percentage of the car’s worth. The critical damage point varies from company to company, usually from 55 percent to 90 percent.

Another way to determine if you should purchase collision and comprehensive coverage is to ascertain how much your car is worth. Then compare how much your car is worth to the annual cost of comprehensive and collision coverage plus your deductible. If the annual cost of comprehensive and collision plus your deductible equals the value of your car, you may not want to purchase these additions to your policy but you still need to ask yourself the following question(s):

1. Can you replace the vehicle if it is totaled?
2. Do you want to pay “x” amount of dollars to insure a vehicle with “y” value?

As an automobile owner and driver, most states require you to purchase car insurance. When buying a car insurance policy you are purchasing a package of coverage based on a variety of factors, including what kind of car you drive and the amount of protection you are interested in. While the law only requires minimum protection, it may be in your best interest to purchase more coverage than required. This may help protect you from a lawsuit or hefty repair bills.

To understand an auto insurance policy, it is beneficial to learn the various types of coverage that can be provided for you. Listed below is a breakdown of each type of insurance coverage.

Liability Insurance

Liability coverage is the foundation of any auto insurance policy, and is required in most states. If you are at fault in an accident, your liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills. Bodily-injury coverage pays for medical bills and lost wages. Property- damage coverage pays for the repair or replacement of property that may have been damaged aside from your own car. The other party may also decide to sue you to collect “pain and suffering” damages.

Liability insurance is the groundwork of your auto insurance puzzle. Your insurance minimum will depend on where you live. For example, in Ohio, drivers must purchase at least $12,500 in bodily injury coverage per person, $25,000 in bodily injury coverage per accident, and $7,500 in property damage coverage (also indicated as 12.5/25/7.5).

It is important to remember that if you cause a serious accident, minimum insurance may not cover you adequately. For this reason, it is a good idea to buy more coverage than what your state requires. If you are a homeowner or have a savings account, retirement fund or other nest egg, you should consider more than the minimum amount of liability insurance. In most states, drivers who are injured are allowed to sue the driver who is at fault in a car accident. If you are sued and your liability insurance does not pay for all of the damages, you are still accountable and your personal finances will be at stake to compensate for the remainder of the damages.