Cover Your Assets— The Benefits of Business Insurance

By Esmeralda C. Geddes, CAPAX Marry Me Insurance Program, Modesto, Calif.Business today takes place in a challenging legal environment and is full of intense competitive pressures. Most business owners do not prepare fully for the unpredictable. Wedding industry entrepreneurs are no exception. Many do not have the correct insurance coverage. In fact, most business owners do not like to discuss insurance coverage and become upset that they have to acquire any type of business insurance protection. It’s not until the time comes when they incur a loss that they become aware of the benefits of choosing the correct business insurance coverage. Think about your business. Take the time to understand the different types of business insurance coverage available. The following are some of the business insurance options available for the wedding industry.Business Owners Policy (BOP) The Business Owners Policy covers two essential services: building and business personal liability. • Building and Business Personal Liability: This protects to pay for repairs or replace the building, equipment, and inventory you own, rent, or lease. This includes property of others, consignment, property off premises, and peak-season adjustments. • Business Liability: This feature protects your premises and operations, products and completed operations, as well as personal and advertising injury. • Property Liability: • Non-delivery/extra expense: This protects you against any extra expenses if a product does not arrive at its destination and is in need of replacement with the customer. • Transit: This protects against liability of products leaving your store and never arriving at its destination. Workers’ CompensationThis type of insurance covers your employees for work-related injuries. When an employee is injured, your priority is to get the injured worker immediate and proper medical care. Your second priority should be to report the accident immediately rather than waiting for the smaller incident to become a much larger problem. Many business owners are concerned about spiraling workers’ compensation rates, yet they do not have a risk management strategy in place. Check your business frequently to determine if the proper safety procedures are being implemented. Creating a hazard-free workplace is important, while complying with OSHA is a way to avoid fines and unnecessary claims. Holding periodic group meetings raises awareness on safety. Providing proper training on risk management is another way to lower your risk. The Year-end AuditThe year-end audit, handled by an external source of the insurance carrier before an insurer’s renewal, is an evaluation of a company’s payroll and employee classification codes. The purpose of auditing payroll books is to assess whether proper payroll levels are being reported. Proper reporting of payroll and classification of employees is essential in saving the burden of addressing an inconsistency with the insurance carrier. When payroll is underreported, the effect is insurance premium back pay to the insurance carrier. In contrast, if payroll for the end of year is over-reported, a refund from the insurance carrier will be issued to the insured. To limit the risk of wrongful reporting during renewal of insurance policies, it is vital to plan ahead for the external audit by creating internal checklists and organizing essential documentation throughout the year. Automobile LiabilityThis protects your company automobiles and your business when personal autos are used for business purposes. Data Breach and Cyber RiskBusinesses increasingly rely on computer networks to transmit and store confidential business and customer information and manage relationships with customers and vendors.  The increased dependence on computer networks, along with state and federal statutes governing data privacy, has created additional risks that businesses need to manage. Peak-season AdjustmentThis coverage eliminates the anxiety of not being fully covered as peak season inventory rises. If you have a smaller business, this coverage is suited best for fluctuations in your inventory. It provides special amounts of insurance limits for certain times during your policy year. For example, during wedding season, most carriers provide you with a standard coverage of 25 percent of fluctuating inventory. This amount can be endorsed for higher limits if needed. Cancelled for Non-Pay?While businesses can thrive one second and slowdown the next, paying your insurance premiums on time is vital. What happens when your policy is cancelled for non-pay? Any gap in your insurance policy can be problematic and costly. Sole-proprietors risk losing all their assets if they are cancelled for non-pay. Overall, non-pay means:• A poor credit score.• Risking non-renewal with your insurance carrier.• Insurance carriers may hesitate to write your business insurance.• A higher down payment will be required when seeking coverage.• You will likely pay higher premiums.Don’t wait another day. Find out what your business insurance options are today—and cover your assets. ••