Tag: Umbrella Insurance Policy

Most People Should Have Personal Umbrella Insurance …Including You!

A personal umbrella insurance policy can protect you and your family against catastrophic losses by providing an extra layer of coverage. “Everyone should have an umbrella policy,” says Ralph Byer, Merrill Lynch Managing Director and Wealth Management Advisor. “It doesn’t take much to exceed the limits of your homeowners or auto insurance policy. A serious car accident or slip-and-fall on your property can be more than enough.”

Personal umbrella (excess liability) policies provide liability and defense cost coverage on top of standard homeowners, renters and auto policies. These policies can:

Umbrella policies are rarely required but often necessary, particularly for those who:

  • own property (personal, rental, investment);
  • have or use cars, boats or other vehicles;
  • travel abroad;
  • own items likely to cause injury (pets, pools, trampolines);
  • volunteer (nonprofit boards, youth sports); or
  • engage in activities that could injure others (high-risk sports, hunting).

If you’re thinking that you don’t make enough money to need umbrella insurance, stop. “That’s a myth,” says Byer. “There is a common misperception that umbrella policies are only needed to protect extra money. In reality, most people need umbrellas to protect their essential money. Those with less often benefit more from an umbrella policy.”

Umbrellas are secondary policies, so you must have underlying insurance coverage that meets the insurance company’s underwriting requirements. Personal umbrella policies are relatively quick and easy to get. They are also surprisingly affordable. “Aggressive pricing and the ability to effectively reduce personal asset exposure,” says Byer, “have combined to make umbrella insurance an essential financial planning and risk management tool.”

Please contact us if you have any questions about umbrella insurance or would like a price quote.

Business Insurance 101

Insurance is an essential part of running a successful business. Though you don’t have to be an insurance expert, a general understanding of the following business policies and coverages can help identify and fill potential coverage gaps. It can also make you a more informed and better equipped consumer when the time comes to renew your insurance.

Property Insurance

Standard commercial property insurance covers loss or damage to buildings and structures caused by covered perils, such as theft, vandalism and fire. It also covers business property (contents), such as office furnishings, inventory, materials and computers. This coverage can help pay the costs of repairing or replacing property that is damaged or lost due to a covered event.

Since a property loss is likely to force a temporary suspension of operations, businesses should consider adding business interruption (business income) coverage. In the event of a covered loss, business interruption insurance will cover lost revenue and fixed expenses, like rent and utilities, during the suspension of operations. Extra expense coverage is also available to reimburse costs over and above normal operating expenses, like temporary relocation costs.

General Liability Insurance

Every business is vulnerable to claims of harm or damage brought by third parties. Standard commercial general liability insurance protects against liability claims for bodily injury and property damage occurring on the premises or arising out of business operations. Standard policies also cover personal and advertising injury, such as libel, slander and false arrest, and provide limited medical payments coverage for injuries sustained by non-employees.

Professional Liability Insurance

Businesses providing professional services requiring extensive technical knowledge or training must meet minimum standards of professional conduct. However, professional services, like those performed by doctors, lawyers, accountants, architects and engineers, are generally not covered under a standard general liability policy. Professional liability (errors and omissions) insurance is needed to protect against claims that a professional erroneously performed or failed to perform its professional services.

Commercial Automobile Insurance

Many assume that commercial automobile insurance is only necessary if a business owns one or more vehicles. However, if cars, trucks, vans or other vehicles are used or rented for business purposes, or if employees run business errands in their personal cars, commercial automobile insurance, including coverage for hired and non-owned vehicles, is needed to cover bodily injury or property damage resulting from an accident.

Workers Compensation Insurance

Whether a business is required to carry workers’ compensation insurance is typically determined by state law. In Florida, for example, a business in the non-construction industry that employs four or more part-time or full-time employees must obtain workers’ compensation coverage to provide medical and lost wage benefits to employees injured on the job. Even though some states, like Florida, set the premium for workers’ compensation insurance, a business can reduce its rates by maintaining a safe workplace or implementing a qualifying drug-free workplace program.

Flood Insurance

The average commercial flood claim is nearly $90,000, which may explain why approximately 25% of businesses never reopen after a flood. Damage caused by rising flood waters isn’t covered under standard property policies. A separate flood insurance policy is needed to cover direct physical loss to buildings and contents caused by an excess of water on land that normally is dry.

Employment Practices Liability Insurance

In 2014, the Equal Employment Opportunity Commission received 88,778 charges of unlawful discrimination. Unfortunately, employment-related lawsuits are becoming significantly more expensive to defend and resolve. Employment practices liability insurance is needed to protect against claims of discrimination, wrongful termination, harassment and other employment-related issues, like breach of contract.

Umbrella Insurance

An umbrella policy is designed to protect against an unusually high loss by providing coverage over and above other liability insurance policies. In addition to providing excess coverage limits, an umbrella policy can step in after the aggregate limit of an underlying policy is exhausted by the payment of claims. Umbrellas may also cover claims that are not covered by underlying policies.

If you have any questions or would like to learn more about insuring a business, please contact us.

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Can You Save Money by Customizing Your Homeowners’ Insurance Coverage?

Many believe that expensive homeowners’ insurance is just the reality of living the American Dream. But, there are ways to lower your premium. This year, instead of (only) cringing and cursing about the cost of renewing your homeowners’ insurance, find out if any of these tips can reduce your policy premium.

Increase Your Deductible: The deductible is the amount you have to pay before the insurance company starts paying a claim. As a general rule, policies with higher deductibles have noticeably lower premiums. Also, find out if a hurricane-only deductible can be expanded to an all-wind deductible, which can produce policy credits and lower premium.

Bundle Policies: Some insurers offer substantial multi-policy discounts. Consider buying your homeowners’, automobile and umbrella policies from the same insurance company.

Eliminate Unnecessary Coverages: Homeowners’ policies often include coverages or limits that may be unnecessary or excessive. For example, Coverage B (Other Structures) under a standard homeowners’ policy generally covers structures that are not attached to the home, like sheds, detached garages, gazebos and pools. Homeowners with inexpensive or nonexistent ‘other structures’ may be able to lower their premium by removing or reducing this coverage.

Discuss Ordinance and Law coverage and other ‘Bells & Whistles’ endorsements. Weigh the benefits against costs. Consider how you want personal property (content) claims to be settled. Do you need replacement cost or can you settle for depreciated actual value?

Think Twice Before Filing a Claim. Gone are the days when homeowners’ insurance was used for every conceivable claim. Since filing a claim can lead to higher premiums, it may be cheaper to pay minor claims and claims that are clearly not covered out of your own pocket. If you’re not sure whether to file a claim, ask your agent.

Assess Your Personal Property. Make sure your personal property values are in line with the automatic coverage provided in most policies. Oftentimes, an accurate valuation reveals that coverage limits are significantly higher than necessary.

Your Home More Disaster Resistant: Insurance companies typically provide premium credits and discounts for improvements that increase the structural security of your home, like adding storm shutters or reinforcing the roof.

Improve Home Security: Discounts are often available for various safety and security features, many of which are relatively inexpensive, such as smoke and carbon monoxide (CO) detectors, burglar alarms and deadbolt locks. Bigger discounts may also be available for more advanced security devices, like sprinkler systems and monitored fire and burglar alarms.

Eliminate Recreational Safety Hazards: Did you know that in 2014 there were nearly 105,000 hospital emergency room-treated injuries associated with trampolines? Your insurance company did. Getting rid of recreational items like trampolines, tree houses and jungle gyms may lower your premium.

Maintain a Good Credit Rating: Insurers are increasingly using credit information to price homeowners’ insurance policies and charging higher premiums to those with lower credit scores. It’s a good idea to review your credit reports regularly and promptly correct any errors.

Work with an Independent Insurance Agent: Shopping around may be a good way to save money, but it can be time consuming and frustrating. Since independent insurance agents have access to multiple insurance companies, they can do the shopping around for you. Reputable independent agents are also more likely to know about special rates and discounts that may be available.

There are a number of other ways to reduce your premium, but options may be limited by market conditions or individual circumstances. Nevertheless, you should at least consider all the alternatives before renewing your homeowners’ insurance policy.

If you have any questions or would like to learn more about premium discounts that may be available, please contact us.

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Will business owners buy insurance online?

Insurance companies such as Geico and Progressive started selling personal insurance online over a decade ago. So is it safe to assume that business insurance can also be sold online?

We decided to explore this endeavour and we’re not the only ones. Plenty of insurance agencies offer business insurance, but very few can offer clients an online quote.

Just because the tool is out there doesn’t mean business owners will use it. Getting a quote for business insurance is significantly more complicated than obtaining a personal quote. Some of the other agencies that are offering business quotes are approaching it quite differently than we did.

Hiscox is targeting small business with a page on their site dedicated to explaining the various types of insurance coverage small business owners need. Apogee lists the types of insurance they can quote instantly and features a video tutorial of how to use their quoting tool. Our tool lists all the instant quotes we offer including Property and Liability Quotes, Professional Liability Quotes, Business Auto Quotes, and many more.

The introduction of this tool to our website also created the need for a complete redesign. We call ourselves a full-service independent insurance agency and creating this tool made us realize the possibility for an online marketplace. If clients can get quotes online they should be able to service their policies online as well. That’s why we also created a service page which allows clients to manage their policies online

If successful, online quotes for business insurance could be a big game changer. It will be interesting to see how many more agencies begin offering business quotes online. Get a quote and let us know what you think.

At Setnor Byer Insurance & Risk, we are committed to offering you a seamless insurance experience. Check back with us periodically for informational updates about insurance news. If you have specific questions about our instant quoting tool or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

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Personal Umbrella Insurance Policy: The “Business Pursuits” Exclusion

When it comes to personal insurance, some people are content with their standard automobile and homeowners’ (or renters’) insurance policies. Others, however, believe additional insurance is necessary to adequately protect their interests. Whether these people are naturally more risk averse, or they understand that an auto policy with $10,000/20,000 limits will likely fail to fully cover all but the slightest of occurrences, the solution they seek can be found in a personal umbrella liability insurance policy.

A personal umbrella insurance policy, or an excess liability insurance policy, provides coverage that goes beyond the limits of an insured’s primary home or automobile insurance policies. Such coverage is often described as second-tier or second-layer insurance because the coverage comes into play only after the primary or underlying coverage is exhausted. Depending on the precise policy form, an umbrella policy may simply operate to increase the limits of coverage beyond those of the primary policies, or it may provide broader coverage beyond those of the underlying policies. Either way, a personal umbrella insurance policy creates an additional layer of security against the loss of one’s personal assets and wealth.

To maximize the protection afforded by a personal umbrella policy, it is necessary to understand what the policy covers. Or, more importantly, what the policy excludes from coverage. While every insurance policy contains exclusions, some warrant additional discussion. In the context of personal umbrella insurance policies, one such exclusion is the “business pursuits” exclusion.

Although the precise language of the “business pursuits” exclusion varies among different policies, it typically provides that the personal umbrella policy will not cover bodily injury or property damage arising out of business pursuits of the insured. The underlying purpose of this exclusion is to deny coverage for losses arising out of a business endeavor. Since most of those who purchase personal umbrella insurance policies undertake some form of business endeavor throughout their day, it is important to understand the precise scope of the exclusion.

The first place to start is the policy itself. Unfortunately, the word business is not always defined in the policy. The policies that do provide a definition usually do so by providing a list of synonyms, such as trade, profession, or occupation. As a result, there is little guidance to be found in the policy.

Another way to understand the exclusion is to look at judicial opinions that have considered its meaning. However, working with little more than the sparse policy language, courts have struggled to provide a universal interpretation of the exclusion. Nevertheless, these opinions do provide some general guidance as to the scope of the “business pursuits” exclusion.

According to these judicial decisions, the exclusion applies to conduct that is primarily taken in furtherance of a business interest or that is inextricably entwined with employment. Although many courts refused to define the outer limits of the exclusion, one court rejected the notion that the exclusion automatically applies merely because the conduct occurred in the workplace. According to this court, the applicability of the exclusion must be assessed in light of the relationship of the alleged conduct to the business activity. And, while the applicability of the exclusion may depend on the existence of a profit motive, the alleged act must ordinarily be one that the insured would not normally perform but for the business and must be solely referable to the conduct of the business.

Despite this guidance, insureds are still left without a universal interpretation of the exclusion. And, while it may be easy to predict the applicability of the exclusion in some clear-cut cases, those instances falling somewhere in the middle may defy accurate prediction. Consequently, as is often the case, it is very difficult to state whether coverage will be excluded in a hypothetical situation. Actual facts are needed to make a determination.

However, any difficulty encountered in predicting the applicability of the exclusion before the happening of an occurrence does not diminish the importance of incorporating a personal umbrella policy into a comprehensive insurance portfolio. Knowing about, and understanding, the “business pursuits” exclusion allows insureds to identify potential gaps in their personal insurance coverage and adjust their behavior accordingly.

If you would like to learn more about obtaining a personal umbrella insurance policy, please contact us.