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Russell F. Porter Insurance Services

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Business Owner Policy Or General Liability:

Small Business

Procuring Business Insurance for my clients is the hardest job there is to me. It is a slow, hostile and uncaring environment. Many Insurers have a take it or leave it attitude. To some extent I cannot blame them because there are so many fraudulent claims. The cost for an Insurer to investigate a claim and to fight the case in court is enormous. So, the Insurers sometimes just pay a claim and pass the cost of fraud on to us.

Finding an Insurer who will accept your risk involves much time and effort. I submit applications to a variety of brokers and Insurers. At times, I charge a broker fee for shopping for your business policy.

If you decide to cancel your plan before the full anniversary date at renewal, broker fees are not refundable and your Insurer can penalize you & pro-rate the refund.

While there are Insurance Companies who can finance your annual premium, some Insurers and brokers require that the annual premium paid up front. So brokers and Insurance Companies affiliate themselves with Finance Companies who will finance your plan.

Pay VIGILANT ATTENTION to payment schedules because some Insurers and Finance Companies have little patience for late payments. If they have to cancel you for non payment, you will probably pay even more when you ask them to reinstate or apply for new coverage, or may even refuse to cover you.

Some of the factors that relate to the cost of a business policy are:

  1. Increasing your volume of business and income.
  2. Increasing your number of employees.
  3. Increasing the number of locations from which you operate.
  4. Diversifying or having more than one occupation.

These factors increase the exposure of an Insurer to risk of claim. So you can expect your premium to increase for that reason alone: Even if you experience no need for claim, the Insurer has to increase the cost of the policy to you.

When you ask me to price an offer for your Business, I need:

  1. A copy of your "Fictitious Name" license.
  2. Your Federal employer number- (similar to your social security number).
  3. You need to decide if you want coverage in addition to liability coverage, such as your structure from where you operate your business, equipment, merchandise or supplies.
  4. An inventory list showing what is being insured and estimated new value.
  5. To know if you have more than one location from which you operate your business.
  6. To know when your business was established.
  7. If you are incorporated I need a copy of the corporation paperwork.
  8. If you have experienced a claim or claims. If you have prior insurance, I must have a loss report from that Insurer.
  9. If you are a partnership, I need to know who those partners are.
  10. If you need commercial vehicle Insurance included in the package, I need the names, birth dates, and drivers license numbers of everyone who will be operating vehicles.
  11. If you rent or lease the structure(e) from which you operate, I need to know about the landlord(s) or any additional insured party(ies).
  12. If you are purchasing the structure(e) from which you operate, I need to know the lienholder, loan number, and their requirement for minimum coverage.

There are riders available. some of these would be:

  1. Employee dishonesty.
  2. Sewer backup.
  3. Signage if costs more than $2,000 to replace.
  4. Earthquake or Flood coverage.
  5. Personal property of employees or clients.
  6. Window glass coverage if structure is largely glass.
  7. Sale of alcoholic beverages or use of alcohol at events.
  8. Community Event Coverage.
  9. Advertisement coverage.
  10. Valuable paperwork coverage.
  11. Peak season coverage (when you have more merchandise)
  12. Inflation rider to automatically update values.
  13. Building Ordinance to satisfy city or county structural codes.
  14. Builders Risk Course of Construction
  15. Multiple location coverage.
  16. Key man, partner or executive disability and or life Insurance.
  17. Terrorism rider.
  18. Errors & Omissions for those who have professional designations to cover you for unintentional mistakes you might make that would adversely affect your clients It is defined as "any act, error or omission in rendering or failing to render professional services for others in the conduct of a profession."
  19. Professional Umbrella policy.

Tell me if you have changes after your policy is issued, so I can update your coverage.

For Workers Compensation, my experience is that you are better off going with the State Fund. They are more competitive, especially when you are new in business.

Choosing High Deductible is a way to control the cost of your Policy.

Do everything in your power to appease your insurer.

If you have questions about a claim, but are not yet sure if you will pursue a claim, remember that the mere act of questioning a claim representative can be counted as a claim even though nothing is paid out by the Insurer. Then you can be dropped like a hot potato and / or have your rates increased on you.

Very Important: If you operate a vehicle primarily to run your business, you should add that vehicle to the business policy even though you will likely pay much more than a personal auto policy. If your employee is using their personal vehicle to do your work, you should add a non- owned auto rider to your business policy.> If you borrow your employee's vehicle to do something for your business, you should add a non owned rider to your business policy.

Equipment and materials that you use for your business at a job site or in your vehicle or at your place of business are not covered very well under your personal home or auto policy. You would need an Inland Marine rider.