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BUSINESS INSURANCE

Every business owner knows business problems rarely have simple solutions. At The David Agency, you are getting much more than insurance for your business. You are getting an independent and objective insurance analyst – not just at renewal time but throughout the year.

What is your goal to protect your business?

Is it to keep copying what insurance you have had year after year? Or to be advised of the changes in the industry, laws, and jury awards and modify your policies to keep up with the changing marketplace? Our problem solving assists your business to keep going in the face of disaster, accidents, loss of key employees, along with providing an employee benefits package for attracting and maintaining the best employees you can find.

Whether your business properties are real or intellectual, they need to be protected. Whether you are working toward ISO certification, environmental compliance or employment practices liability, you need the right coverage. The David Agency provides in-house Commercial Lines underwriting that guarantees a complete and thorough analysis of your insurance needs and a custom-designed program specifically for your business.

Financial Planning is an extremely important part of protecting your business. Life insurance, disability, long term care, and business overhead, are the different elements that need to be chosen wisely for insuring the viability of your business. In addition, 401k’s and pension and profit sharing programs should be implemented in order to meet the goals of the owners of a business.

Our Team will take the time to assess the needs of your business, now, and on a continuing basis as your business changes, showing you the policies to consider that are tailored to your needs.

Coverage includes damage to the hull on the ground or in-flight, plus bodily injury, property damage to others, or passenger liability from accidents. Available to private, business, flying club or fixed base operator owned. General liability (Airline General Third Party) for premises, hangar keepers and products liability can be added based on your needs. When flying internationally, consider removing the standard “war and confiscation exclusion.”

A bond is not insurance, but a financial instrument guaranteeing your performance or fiduciary responsibility. Underwriting is all based on your finances and your ability to repay the bonding company quickly when a bond is called. A bond allows you to engage in an activity that has a bonding requirement whether it is Surety, Customs, Notary, Wage & Welfare, License & Permit, Performance, Contractor, Court, Appeals, or any other.

On the first day of a project there is nothing, on the last day of a project there is an expensive finished structure. From beginning to end, the value of the structure increases day by day. Rather than charging you premium for the whole value on the first day, the value on the policy starts at zero and ramps up to the full value limit you determine before the policy is issued. This is a fair way to insure and pay for the premium of the property portion of a build. Theft is the most frequent type of claim, and securing each day’s deliveries work towards your interest of keeping your premium low.

Your business plan for the year included profits which you had expectations. When the business is shut down due to an insured loss, your profits can continue with this insurance, plus it can provide your continued payroll too. It can pay any ongoing expenses (bank mortgage, property taxes, lease obligations, etc). And if you have to move to a temporary location while yours is being rebuilt, it can pay for the rental cost and pay for overnight packages to get you back to business quicker. Coinsurance is the phrase that determines how many months these payments will be spread over until this coverage ends.

If your business qualifies for a BOP, we recommend that you get it. A BOP has built-in coverages that large businesses must pay for individually. A BOP can encompass property, liability, automobile liability and possibly some employment practices liability insurance as well as a broad spectrum of good solid coverages.

Shipping or importing goods when yours to insure (check the FOB), is not covered under your property policy. A cargo policy can be set up for a one-time shipment or for regular ongoing shipments. There are many ways to arrange coverage such as just the onboard ship portion, or most commonly “your warehouse to your client’s warehouse” coverage. These policies use old world English i.e. the Inchmaree Clause (Machinery); Particular Average (your insurance pays for your loss); General Average (all shipments on board the vessel share and pay for your loss), etc. A recommended option is to remove the standard war and confiscation exclusion to have these additional risks covered. If purchasing a new piece of machinery, adding Business Income for lost profits expected in the event the machinery is lost is advised.

Commercial Auto covers your acts or those of your employees or other drivers for Liability for injuries or property damage to others. Commercial auto also covers physical damage to company autos including Comprehensive and Collision. When physical damage pays for a total loss, Lease-Gap coverage can pay for the remaining payments on a lease. If an employee does not own a personal automobile, they gain personal liability through DOC – Drive Other Car coverage. For vehicles not owned by the business Non-Owned Liability or Hired Liability for injuries or property damage to others is also typically available. Comprehensive and Collision coverage can also be extended to rental cars. Other standard coverage includes Medical Payments, Uninsured, Underinsured, Rental Reimbursement, Towing and Labor. For those States with Personal Injury Protection, it adds no-fault benefits payable to those in the auto (most States provide bodily injury, few include property damage). Studies have shown that the number one cause of employee fatalities in the U.S. is vehicular accidents.

In the case of an employee theft (money or business property), an Employee Fidelity Bond would replenish the businesses financial loss up to the policy limit. The Employee Retirement Income Security Act (ERISA) requires that any retirement plan be bonded from an employee theft at 10% of the plans assets up to $500,000 maximum. Be wary, if you know an employee stole from you or someone else previously, a new theft by those employees are automatically excluded and you can not recoup your financial loss in this instance.

Cyber Liability As one of the newest fields in insurance, the variables in coverage and triggers of coverage are different from insurer to insurer, nothing is even close to standardized in coverage. What triggers coverage by Cyber Liability? Third party access to your data, breaches from lost cell phones, tablets, flash drives, laptops. From your website: publishing liability including copyright infringement, defamation, invasion of privacy, and intellectual property laws. Employees posting on blogs, social media sites, or discussion forums that violates copyrighted material. A hacker gaining access to your client data causing identity theft, or an employee forwarding an email that has an unintentional virus that hacks your client’s information. What expenses are covered by Cyber Liability? Cost of network downtime in the form of business interruption and loss of revenue, legal fees, forensic investigation, breach notification services, expenses from a class action lawsuit, regulatory fines and penalties, some States require you to pay for Credit Monitoring to those affected by a breach in your system, hire a PR Team to rebuild your image, electronic data restoration expenses, cyber extortion by receiving threats to damage or disrupt a network or release of private information to the public. Cyber Liability takes into account that you use antivirus, anti-spyware, firewall, and some encryption, which does not make anyone’s system avoid a breach.”

These policies apply to ‘Members’ of Limited Liability Companies, ‘Partners’ of Partnerships, ‘Sole Proprietors’ as well as ‘Directors’ and ‘Officers’ of corporations. It is easier to describe what these policies do not do – they do not protect anyone from the liability of bodily injury or property damage. What it does is protect for group decisions where someone else can question the decision and sue based on that decision. We have not ever seen two claims alike, they’re all different and all amazing.

Property insurance always excludes the peril of Earthquake for loss to your building(s), Business Personal Property and Business Interruption coverage. This coverage can be added either through the existing property policy or through a separate Earthquake policy. Midwesterners assume that this coverage is not needed, however The New Madrid Fault in Southern Illinois and Missouri shook violently in 1811 and 1812 producing the largest earthquake in U.S. history. This was prior to the Richter Scale and was felt in New York City, rang church bells in Boston, MA, and toppled chimneys in Maine. According to the United States Geological Survey, “Strong earthquakes in the New Madrid seismic zone are certain to occur in the future.” Most buildings in the Midwest are not required and not built to any earthquake standard.

Breaking this out of your Business Personal Property policy and placing on an EDP policy adds electrical surge and mechanical breakdown coverage not provided in a property policy. We recommend including not only computers, but printers, fax machines, scanners, copiers, phone systems, or any other computer operated equipment that are susceptible to electrical surge or mechanical breakdown. Also consider adding software (if you keep copies on premises), data (if you do not back-up frequently and maintain those copies off premises), and business interruption. One lightning strike with no visual damage could wreak havoc to your business without this coverage.

Ex-Employees, New Hires, Existing Employees and even those applicants who were not hired are eligible to sue your business for a variety of causes. Lawsuits against your business is a two-step process. First, the Plaintiff’s attorney files a complaint with the Equal Employment Opportunity Commission (EEOC), the EEOC is a screening step to help reduce the number of lawsuits clogging the court system. If the EEOC certifies the complaint believing there is cause, the second step has the Plaintiff’s attorney file a lawsuit in court. It is normal that your company will need lawyers in both actions for the same complaint.

There are many types of Professional Liability policies including Accountants, Advertising Industry, Architects, Chiropractors, Computer Programmers, Consultants, Dentists, Doctors, Engineers, Graphic Arts Industry, Insurance Agents, Lawyers, Meeting Planners, Web Designers, Wedding Planners, or any other professional field. Errors and omissions is the insurance that covers your company or you individually, in the event that a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results. If you are in the business of providing a service to your client for a fee, you have an E&O exposure.

Some businesses have events with considerable income potential that could become an instant financial liability if the event were cancelled, or large additional costs if postponed. Refunding entrance fees and demands from the venue to fulfill payment for the space could cripple the business. Causes of loss that can trigger this coverage are: weather; earthquake; flood; tsunami; power outage; terrorist act; venue deemed unusable; non-appearance and other causes of loss can be negotiated on your behalf.

It is recommended that the fiduciaries of employee retirement plans review and evaluate them at the longest period of every three years and document it. Employees, or retired employees can sue the fiduciaries of a retirement plan for employee’s investments coming up short, mismanagement or misuse of plan assets since the fiduciaries maintained control during the lifetime of the retirement plan. Using a plan provider still leaves the fiduciaries in position to evaluate the use of different plan providers. This is one area that the corporate veil does not exist and the fiduciary is personally liable and their estate is at risk.

Property insurance always excludes the peril of Flood for loss to your building(s), Business Personal Property and Business Interruption coverage. This coverage can be added either through the existing policy or through a separate policy. The insurance definition of flood is rising waters outside of the building entering through windows, doors or openings. Localized heavy downpours, a broken dam, dike or levee can cause most buildings to have a flood even with flood control in the region. If your building is not accessible for 2 weeks due to civil authority decision though is high and dry and undamaged, you may have a large Business Interruption loss that this policy could offer.

If your business is entrusted with other people’s or company’s vehicles, damage to those vehicles or the liability of moving them could be your responsibility. Repair shops, dealerships, regular valet service or a special event using valets, parking garages, and many others need this coverage. Deductibles apply to damage to the cars in your care, custody and control just like if they were your own auto’s.

This policy has many parts: General Liability is very broad including such things as slips and falls by guests on your premises or your ladder falling on someone’s car: Products Liability for things you make and sell that could cause injury or property damage to someone; Complete Operations if an installation you made (using someone else’s products) caused injury or property damage; Personal Injury involves libel, slander, invasion of privacy or false arrest; Damage to Rented premises covers the portion of the building you rent if your business causes damage to it (and the General Liability would pick up damage to the remainder of the building if caused by you); Medical Expense does not require legal liability for payment and is a goodwill gesture to a guest on your premises if they are injured; and, Employee Benefits Liability protects you should a promised benefit not be delivered to an employee.

When your Business Personal Property is away from your premises (coming or going), it is not covered by your Business Personal Property policy. A variety of policies cover your Business Personal Property away from your premises, such as a Transit, Contractor’s Equipment Floater, Valuable Papers, Builder’s Risk / Installation policies. Instrumentalities of communication and transportation also fall into Inland Marine, such as radio and television equipment, bridges, roads, tunnels, pipelines and piers. Long ago Property underwriters could not figure out how to rate property away from a client’s premises, so who did they turn to who had experience? Ocean Marine underwriters who handled traveling cargo on ships. Satisfying the ego’s of the Ocean Marine underwriters, they called this new field of underwriting “Inland Marine.”

All policies have a “territory of coverage” which most include the U.S., its possessions and territories and Canada, that’s it. When your business or employees go outside of this region, your policies no longer work. Purchasing an International policy excludes coverage in the U.S., its possessions and territories and Canada, leaving the rest of the world covered. This policy is a combination of General Liability, Automobile Liability, Workers Compensation, Repatriation Expense (an Air Ambulance to get you or your employees home in the event of injury or illness), and a service to call to learn where local English speaking doctors or lawyers are available anywhere in the world.

The following needs to be considered: The constant flow of jewelry coming and going; whether your owned jewelry; your customer’s jewelry; jewelry you or your employees wear away from your business; jewelry on memorandum; moved via travel or messenger; shipping coverage; trade show or salesperson lines; the expense of hiring qualified security guard in case there is an alarm system failure; or, if the insurance company and you agree you should hire an accountant to prepare a claim for jewelry loss can all be covered in a Jeweler’s Block policy.

When you sell, distribute, manufacturer (distill) liquor, a liquor liability policy can protect your business and its employees for a consumer who is injured or causes injury to others due to intoxication. All policies exclude coverage for Minor (underage) consumption of alcohol which is critical for your employees to check ages or consumers. Each State’s Laws are wildly different from the next. Some States give liquor businesses full immunity (no liability) and most don’t buy this insurance. Some States do not provide any protection for liquor businesses (full liability) and most buy this insurance. Other States limit the liability for sums such as $64,000 for one accident and most buy this insurance.

Property policies typically exclude or do not cover Machinery Breakdown. A Machinery Breakdown policy or endorsement to your property policy can be an important part of your coverage. If machinery breaks down suddenly and accidentally (versus wear and tear), or a pressurized vessel explodes (boilers, air compressors, etc.), repair or replacement is covered except for the part or event that caused the breakdown. Some policies provide limited coverages for the event that caused the breakdown. As an example, electrical panels are havens for spiders and their webs, sometimes electrical arcs go across the webs causing a fire. That electrical arcing and subsequent fire are covered only in the Machinery Breakdown policy. Clean up and disposal of hazardous substances from a covered loss can be covered as well. Business Interruption and Extra Expense must be considered for this peril.

TThe policy can include damage to the hull & machinery, liability from the operation of the vessel, Jones Act for injuries to employees, inchmaree (machinery coverage), legal liability to cargo carried, business interruption, pollution, wreck removal, and towing (pre-contracted or salvor). You won’t find this in any marine policy as the Federal law concerning the “inherent warrantee of seaworthiness” gives all insurance companies an “out” for denying claims if the vessel was unseaworthy before it left for its voyage. Shipshape has significant meaning to Mariners.

Doctors, Medical Groups, and Medical Facilities are all subject to being sued for their acts, when an unexpected outcome occurs in a procedure. Failure to Diagnose is one of the most common claims of patients. This very important coverage has become a very large expense to practicing physicians as our society becomes more litigious. The long ‘Tail’ effect of dealing with minors contributes to the risk uncertainty for future claims. Different specialties are rated according to the risk factors involved in that specialty. Most policies are issued on a ‘Claims Made’ basis, meaning that the coverage in force at the time of the Notice, instead of at the time of the Occurrence, is the coverage answering the suit. We represent all providers including the main provider in Illinois, ISMIE.

There are many types of Professional Liability policies including Accountants, Advertising Industry, Architects, Chiropractors, Computer Programmers, Consultants, Dentists, Doctors, Engineers, Graphic Arts Industry, Insurance Agents, Lawyers, Meeting Planners, Web Designers, Wedding Planners, or any other professional field. Errors and omissions is the insurance that covers your company or you individually, in the event that a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results. If you are in the business of providing a service to your client for a fee, you have an E&O exposure.

There are many types of Professional Liability policies including Accountants, Advertising Industry, Architects, Chiropractors, Computer Programmers, Consultants, Dentists, Doctors, Engineers, Graphic Arts Industry, Insurance Agents, Lawyers, Meeting Planners, Web Designers, Wedding Planners, or any other professional field. Errors and omissions is the insurance that covers your company or you individually, in the event that a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results. If you are in the business of providing a service to your client for a fee, you have an E&O exposure.

Buildings, Business Personal Property, and Business Personal Property of Others (when added), can be covered for most calamities. Realize that these items are only covered when on the premises or within either 500′ or 1,000′ of the premises (depending on the policy). Most purchases you make are FOB your supplier’s dock. Without a transportation, floater, or inland marine policy those goods are uninsured when away from your premises. Replacing your building in the event of a loss for insurance purposes is all about materials, labor, overhead and profit of the contractor to build a new building for you. The value of the replacement cost of your building needs to be your “limit” on your policy. This number has nothing to do with the “real estate” value which includes land, and market conditions. It is critical to understand this difference to insure your building appropriately. Coinsurance is a way to lower your premium, where you share the loss with the insurance company at a pre-determined percentage. Having the inflation guard keeps your building value growing throughout the year so you don’t end up with a limit shortage if a loss occurs later in the policy year.

These policies add to the liability limits of the other policies you purchase, in an efficient way saving premium. If you have a $1M Automobile Liability limit, $1M General Liability limit, and $1M Workers Compensation limit policies, you may determine you need a higher limit. You could increase the limits of each individual Liability policy by $5M which would be expensive, the alternative is an Umbrella / Bumbershoot /Excess where you can add one of these policies with a $5M limit at a much lower cost. Either method you end up with $6M of coverage. Commonly if a claim is covered on the Auto, General Liability or Workers Compensation policy, it is covered by the Umbrella / Bumbershoot / Excess policy.

State law requires all employees to have their workplace injuries and illnesses paid for by Workers Compensation insurance. Case law expanded the definition of “employees” to include independent contractors and subcontractors of yours. You control all who work for you and the responsibility of making sure all are covered is your responsibility. We assist you in establishing procedures to assure your employees, independent contractors and subcontractors all have Workers Compensation insurance. Each policy has two independent halves, the first half is the State mandated coverage of automatically paying claims as they arise. The second half is a liability coverage in case the employee does not seek the State mandated coverage, but elects to sue you for their injuries, pain and suffering and loss of income instead. Be sure wherever your employees are, that those additional States are itemized on your policy. If in the maritime shipbuilding and maintenance trades, Longshore and Harbor Workers coverage is placed in this policy.

Consult the Chicago Insurance Agents at The David Agency today to learn how we can help develop personal insurance, business insurance and employee benefit plans that are right for you and your business.

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