Each of our blogs are going to be covering specific types of insurance that a business owner needs to consider.  In some cases we will breakdown the “Anatomy of” a policy.  These sections of the blog will be intended to describe the policies in a layman’s way and help the business owner understand his or her own policies and exposures to a loss.  Policies are dissected so the reader will be able to see at-a-glance how the policy is put together. The sections containing “Anatomy of….” will include but not limited to Builders Risk (property insurance for a structure under construction), Property, General Liability, Business Automobile, and Workers Compensation & Employers Liability.  We will periodically delve into emerging coverages such as Cyber Liability as well.

The “Anatomy” sections are paraphrased, intentionally leaving out “wordy” portions– or the “legal ease.”  The reader MUST review and rely on his own individual policy. There are hundreds of insurance companies and each may have policies that are different in format and content.  This summarizing technique of breaking down these policies is not the gospel—it is simply an outline designed to assist in an understanding of the insurance policies.

One of my instructors told a story where he asked how to avoid “coverage misunderstandings.” One agent spoke up and said “R.T.D.P.!”  Puzzled, the instructor asked, “What is R.T.D.P.?” the agent replied “I tell my clients to Read The Dang Policy…”  Smart advice, but there is one problem and that is that insurance policies are often hard to understand.  This is why at our agency, it is important for policyholders to understand what they are buying, why they are buying it, and we offer to help them read their policy with them or their representative if they need the assistance.

Coverage Check

At the end of some of our blog posts, there will be a Coverage Checklist to go over with your insurance agent.  The purpose of the Coverage Checklist is to get a firm idea of how your coverage works.  Many of these examples are situations that business owners have experienced.  These questions are not designed to put your agent “on the spot,” but to help create a dialogue with your agent, and to purely make sure that you understand the coverage intent.  It is simply a matter of being serious about your protection before it may be too late.

Insurance Cost

Insurance is one of the major expenses of a business.  Business owners must understand this expense and budget for it.  Our blogs will contain a complete guide on how to set up accounting and budget for these expenses.  For example, business owner’s bookkeeping system should reflect insurance cost figures.  You will learn how to establish a system that tracks insurance cost to avoid dreaded problems at audit—turning your profits into losses.  The cost of insurance may eat up all profit if not properly considered, monitored, and accounted for.

For example, for a contractor, insurance costs vary greatly, depending on the type of construction or trade. Take a roofing contractor, for example, will pay a considerable amount more for Workers Compensation insurance then a fire and burglar alarm contractor for the same amount of labor cost.  There are a number of different carpentry classifications, three different concrete construction classifications, etc. Some states have added even additional classifications for emerging trades.  You will learn to research your own classification to receive the most accurate and favorable rate reflected in the section titled Insurance Construction Classifications.  Should you need expert guidance on this topic, call us and we can help you!

If you’d like to review your business or personal insurance, please call us at 423-763-1111.  We hope to answer your questions and serve you!