Commercial Auto and Inland Marine

Where does the grey area exist?  

If you own a business and that business owns and operates vehicles, you need some form of Commercial Auto Insurance. If you rent vehicles or have employees use their personal vehicles for work purposes, you need to secure a hired and non-owned auto policy. If you have a trailer where you move specialized equipment to third party locations’ than you need an inland marine insurance policy. When you have a claim that involves a vehicle there becomes an issue of which policy kicks in to cover what is damaged. This is a time when partnering with an experienced independent insurance agent and purchasing all policies from one carrier can benefit your business immensely.  Here are several tips to help you make sure all of your vehicles and equipment are properly insured.

First you need to know what exactly is covered under each policy.

Commercial Auto

A Commercial Auto Insurance Policy will cover vehicles your business owns that are used for business purposes. If you have a personal vehicle that you also use for business purposes, you still need to buy separate personal and commercial auto insurance policies for that vehicle. If you only have a personal policy and you use the vehicle for business purposes, the liability is taken on by the business. The personal auto policy will not cover the damage to third party vehicles that are damaged in an accident you cause. If you do use your personal vehicle for business purposes, it is important to speak long and honestly with your independent insurance agent about what exactly you use the vehicle for and how best to insure it.

Hired and Non-owned Auto

If you have employees who drive rented vehicles when they travel or who use their personal vehicle for business purposes, you have a need for a Hired and Non-Owned Auto Policy. This policy may be in place of a Commercial Auto Policy or in addition to it. When an accident occurs that is the fault of your employee, if they are in their personal car, the personal insurance policy will cover the damages to the employees vehicle.  Now the property and bodily injury liability to third parties is the liability of the business. This is why you need to strongly consider this policy for your business. One accident that causes a car to be totaled and a third party to spend a week in the hospital can easily result in your business being responsible for tens of thousands of dollars. If you do not have the ability to cover these costs you need an insurance policy to protect your business.

Inland Marine

An Inland Marine Insurance Policy is a policy you would purchase in addition to a Commercial Auto Policy in order to protect specialized equipment that is commonly in transit. A common business who needs this coverage is a landscaping company.  A Commercial Auto Policy will coverage the vehicle your business owns and operates. It will also cover your business for any liability you face to third parties damaged by an accident caused by your business. If you have specialized equipment that is transported on either a trailer connected to your vehicles or in the back of a truck, you need to purchase an Inland Marine Policy.

What can you do as a Business Owner?

Partner with an independent insurance agent

Partnering with an independent insurance agent is always the best place to start when you are considering purchasing commercial insurance for your business. This is best for you because an independent agent is not restricted to one or a select few carriers. Typically an independent agent partners with anywhere from 10 to 40 carriers. They can use these relationships to force carriers to compete for your business. This will allow you to get better coverage at the lowest possible rate.

Talk with your agent extensively

No matter if you decide to partner with an independent or captive agent, you need to take the quoting process seriously. If you fail to disclose something to your agent or carrier during the quoting process, it can create an enormous headache for you at a later date. The work case scenario would be that your carrier drops you from coverage because of the failure to disclose something about your business. This can cause you and your agent to have to find a new carrier to cover your business mid term. If this process does not go smoothly it can cause you to have a lapse in coverage. Many carriers will not cover a business who has had a lapse in coverage and this may force you to have to buy some coverage’s from the state provider. The state provider is almost always more expensive than buying coverage out on the open market.

Express your comfort with risk to your agent

Insurance agents talk to many business owners throughout each work day. If they are a nationwide agency, they may speak with a restaurant owner from Los Angeles, a dairy farmer in Wisconsin and a commercial fisherman from New Orleans all before lunch. Each of these businesses faces enormously different risks and the people who own these businesses may have dramatically different expectations from their insurance agent. The only way to be for certain that your agent is looking for what is most important to you is to directly tell them. If you value price above all else, let them know. If you want to insure your business to the teeth, let them know this as well. The more you tell your insurance agent, the less likely you are to have problems with that agent.

Listen to your agents recommendations

Listening is a skill most people could do much better. Business owners especially are confident people. They would not have branched out on their own to start a business without confidence, but that confidence can be a hinderance if you think you know more about every aspect of your business than the experts you partner with.  If you find an independent agent with whom you trust and you have a detailed conversation with them, they should be able to find the best package of coverages to fit the needs of your business. If you go through this process listen to the insurance professionals. They interact with business owners not only when selling them a policy, but also when they have to use that policy because something bad has happened to them.  If you trust your agent, they should only offer a policy that you absolutely need. If they recommend it, it is more than likely in your best interest to listen to them.

Residential Cleaning

How a Residential Cleaning Company Can Benefit From Pay as You Go Workers Comp

A Woman Working at a Residential Cleaning Company. Workers’ Compensation Insurance is required by law for businesses in most states. So is General Liability in most industries. For that reason, these two policies are the bare minimum coverage a business needs to be in business. Now for a cash-strapped, seasonal, or start-up business; coming up with the initial payment to get coverage in place can be difficult. Because of this issue, many carriers have come up with alternative payment options for these necessary coverages. The most popular alternative payment option is Pay as You Go Workers’ Compensation. One industry in particular that benefits from this option is the residential cleaning industry. Here are four ways residential cleaning companies benefit from choosing the Pay as You Go Option for Workers Comp Coverage.

  • Pay-as-You-Go has lower up-front costs.
  • Pay-as-You-Go frees up cash for more pressing business needs.
  • Pay-as-You-Go allows businesses to pay premium monthly.
  • Pay-as-You-Go prevents most audits

Residential Cleaning Companies depend upon their employees to keep their customers happy.

Lower Up Front Costs

When a cleaning company decides to go with a traditional workers compensation policy, they are required to make a large lump sum payment just to get coverage in place. They later have to make nine monthly payments at the end of the term. These payments are based upon an estimate of payroll from last year. If your business has plenty of cash on hand and your employee hours are regular from year to year this may not be much of a problem. Most residential cleaning companies do not have regular payroll or mounds of cash on hand. If this sounds like your business than the Pay as You Go Option is a great way to get coverage in place without tying up too much cash.

Frees Up Cash

Now if you are a business that is not rolling in cash, you may need to consider the Pay as You Go Option.  This type of alternative payment method for workers comp coverage allows you to not only lower your up front costs, but it allows you to free up cash throughout the year by paying your premium in real-time each month based upon the accurate payroll from the previous month. This is instead of paying premium based upon an estimate of payroll from last year or the three previous years. This estimate can cause you to severely over or under-pay on premium.

Allows Monthly Payments

Allowing payments of premium each month can help your business in many ways. One of the best ways it helps is by keeping your payments accurate from paying them in real-time. When workers comp premiums are paid on an estimate basis, it can cause you to severely under or over-pay throughout the year. This gets cleared up whenever an audit takes place and an audit takes place at the end of each term, but if you under pay throughout the year it can cause your business to have a surprise payment at the end of the term. Even if you are one of the lucky businesses who over-pays and gets a refund at the end of the term, you still have had additional cash tied up in premium payments throughout the year. This is cash that could have been spent on more pressing needs.

Buying the proper chemicals is an essential part of any successful residential cleaning company.

Prevent Audits

An additional benefit your residential cleaning business can gain from choosing the Pay as You Go Option is to prevent audits mid-term. Because the payroll is calculated monthly by a payroll company it is accurate. This eliminates the need for a mid term audit because the payroll company is auditing the premium payment each month. The Pay as You Go Option also makes the end of term audit much more smooth because the payments have been done based on actual payroll each month. Your staff will spend less time gathering data to compare your actual payroll with the estimated payroll and premium payments based on that estimate. If you have ever underpaid premium and owed a significant amount at the end of the term, you appreciate the accuracy this program provides.

5 Industries who can benefit from Pay as You Go Workers Comp

Pay as You Go Workers Comp is a great program that many insurance carriers offer to help businesses get insurance in place without the burden of a large lump sum payment. For many businesses, it is not in their best interest to tie up cash in a large payment just to get a workers comp policy in place.

pay-as-you-go-workers-comp-insurance

Landscaping

Landscaping can benefit from a Pay as You Go Workers Comp Policy because of the seasonal nature of the work involved in landscaping. No matter where you operate, there are more than likely certain times of the year when a majority of the work is done. For most businesses, this is in the Summer when grass and other plants are growing like crazy. Even if you offer Winter Snow Removal Services, that time of year will more than likely be less busy than other times of the year. Pay as You Go will allow you to pay your premium each month based upon the previous months payroll.

Hospitality

The Hospitality Industry includes all businesses that cater to people who are travelling. This can include hotels, motels, bed & breakfasts, bars, and restaurants.  The nature of this business is dependent upon the weather and the Summer Break from school. Because children are free from the daily routine of school, many parents decide to take them on vacations. While these people are on vacations they typically have lots of disposable income. Because of the seasonal nature of this industry, Pay as You Go Workers Comp can allow business owners to pay their premium during the busy time when they have cash on hand and pay less during the slower time of the year.

Construction

Construction is another business that because of the weather and the outdoor nature of the job, it has slow times. If these slow times are causing your business to have less cash coming in, Pay as You Go might just be a great option to help construction businesses keep coverage in place while keeping premium payments to a minimum.

Food Trucks

Food Trucks are booming in popularity all over the country. Most cities now have numerous Food Truck Friday Events and sporting events are beginning to see more and more trucks compared to just a few years ago. Because this business is located outside, it is somewhat dependent upon the weather. If the truck is located in a sports town, it can even be based upon the success of the professional teams in your area. With the Pay as You Go Option, you can pay a higher premium during the months when you have cash on hand and less when the business traffic is slow.

Farming

Farming is another industry that can be both seasonal and cash-strapped for several different reasons. Some family owned farms depend on government programs for part of their revenue. Those payments are usually sent out at one or a few times per year. During those times in between, some farmers may lack cash on hand to make large lump sum payments for things like commercial insurance. A Pay as You Go Option can help these family farms by allowing them to pay their premium monthly depending upon the work they do each month.