Is My Business Covered for That?
8 Common Business Insurance Gaps
Most small and mid-sized businesses are aware of the importance of having business insurance but often simply opt for general property and liability insurance and call it a day. While these policies cover most of the basics, there may be gaps in your insurance that can leave your business exposed to risk and financial loss.
Here are some of the most common potential gaps we see in business coverage and an overview of more specialized policies and endorsements that may help you protect your business and help your business recover after a covered loss. Keep in mind that individual policies can vary widely, so it’s always important to review your coverage options with your agent or broker.
- Am I covered if an employee sues my business? Consult your insurance agent or broker about adding these coverages to help close the potential gaps:
- Employment Practices Liability Insurance – to protect against lawsuits filed by employees who claim their legal rights as employees have been violated.
- Directors & Officers – to protect your company’s officers and directors if they are personally sued for acts or omissions committed in their capacity as corporate officers or directors.
- Is my business covered if it’s sued by a customer for professional negligence?
- Consider adding Professional Liability or Errors and Omissions (E&O) insurance to help protect against claims directly related to your professional services.
- If my business is damaged by a fire or break-in and must close temporarily, are my operating expenses insured?
- To help cover that potential gap following a covered property loss, ask your insurance representative about adding business interruption insurance to your property policy.
- Am I covered if one of my employees accidently infects my company’s computer system with malware?
- Consider procuring a commercial cyber policy to help provide solutions and services for privacy breaches, network security, incident response, and media liability.
- Is my business insured if our mechanical system breaks down?
- To help close this potential gap, consider equipment breakdown insurance to provide the funds and resources to get you back up and running quickly after a covered loss.
- Is my business covered if an employee gets in an accident while delivering products to a customer?
- A commercial auto policy can help protect vehicles owned by a business; and some may include coverage for individually owned vehicles used regularly for that business (other than commuting to work).
- Is my business covered if it is damaged by a flood?
- Since the typical commercial property insurance policy does not include flood coverage, ask your agent or broker about commercial flood insurance options available from private insurers or the federal government’s National Flood Insurance Program (NFIP).
- Is my business covered if my employees are injured while they are overseas?
- To help cover this potential gap, consider multinational travel accident insurance – to provide resources for international travel, including emergency medical, cash and document replacement, local country reports and travel alerts, and more.
Regardless of the type of business you run, it may be smart to talk to your independent insurance agent or broker to make sure your business is appropriately insured so that you can focus on keeping your business running smoothly, even if you experience a loss.
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This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice.
Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.chubb.com. Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall’s Mill Road, Whitehouse Station, NJ 08889-1600.
Rate Increases on Personal Auto
Seeking a return to profitability after a few years of underwriting losses, U.S. private passenger auto insurers continue to issue double-digit rate increases for drivers, according to a report from S&P Global.
Over half of the country has seen double-digit auto insurance rate increases.
The average premium has gone up 11% year-to-date nationwide, S&P revealed.
“The countrywide average will have increased by double digits in back-to-back years if this trend continues for the remainder of 2023,” the ratings firm added.
Among the top 10 personal auto insurers, USAA, Farmers Insurance and State Farm have implemented the largest effective rate changes year-to-date, with average increases of 14.9%, 14.2% and 13.9%, respectively. The top insurers with the lowest average increases so far are GEICO at 7.6%, Progressive at 8.5%, and Nationwide and Liberty Mutual at 8.8% each.
Rate increases vary widely by state, S&P noted. Nevada has had the highest overall effective rate increase so far at 27.9%, while rates in Idaho have increased the least at just 2.5% on average. In all, 32 states have seen double-digit increases.
Texas has the highest cumulative rate increase stretching back to January 2022, at 37.6% over the 20-month period. Seven other states have a cumulative effective rate increase of at least 30% since 2022. They include Illinois, Ohio, Tennessee, Nevada, Arizona, Illinois and Utah.
The states with the lowest cumulative increases are Hawaii (4.4%), Vermont (6.3%), North Carolina (8.2%) and California(11.1%). S&P noted that the cumulative rate increase in California is low “due to the almost two-year hiatus by the state regulator to approve any private auto rate increase.”
Rate-change data in S&P’s analysis is current through Aug. 18, 2023, and reflects 8.5 months of approved rate filings.
Key Takeaways
Even as insurance providers increase rates, consumers are looking for ways to reduce costs. Individuals are encouraged to discuss potential discounts with their insurance agents. Such deals may include reduced rates for good driving or bundling coverage.
While Cleary Insurance, Inc. cannot control insurance pricing, we can help you explore options for lowering rates without sacrificing essential coverage.
Contact us today to review your unique auto insurance policy.
The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2023 Zywave, Inc. All rights reserved
Saving for Retirement
Presented by: Matthew A. Clayson
Saving for retirement is better than spending every dollar you earn, but just putting money aside probably won’t get you where you want to be. That’s why investing may be a crucial component of any retirement plan. It takes the money you earn from work and allows it to go to work for you.
A successful retirement investment strategy often touches on the following principles:
- Start early
- Invest more aggressively to start
- Diversify investment risk
- Keep fees low
- Transition into safer investments over time
Whether you’re investing on your own through an IRA, through your employer with a 401(k), or both, here’s what you need to know about laying out an investment strategy that will hopefully get you from where you are now to a comfortable retirement.
Start early with your retirement investment plan
If you’re earning income from a job, you can open a traditional or Roth IRA. Minors can start saving through a custodial account that a parent has control over until they turn 18 or 21, depending on the type of plan and what state they live in.
Let’s say that when you’re 25, you start saving for retirement by investing $100/month and assume a moderate average annual return of 5 percent. By the time you’re 55, you’ll have about $80,000.
If you don’t start saving for retirement until you’re 35, you’ll have to invest $200/month to earn the same amount by age 55 at the same return. If you only invest $100 a month, you’ll have to earn an 11 percent rate of return to end up with the same amount by age 55.
Invest more aggressively to start
It’s important not to panic and change your investment strategy if this happens, experts note. Rather, it may be a great time to stay invested and invest more so you can follow the adage “buy low, sell high.”
In other words, when stocks plummet, you can likely buy them on the cheap. Over time, assuming the market rebounds, you’ll have the opportunity to experience investment growth that people who withdrew from their investments missed out on.
But just because an investment entails risk doesn’t mean it will pay off. The type of risk you want to take is a calculated, time-tested one. Over more than a century, betting on the U.S. economy by investing in the stock and bond markets has proven rewarding. However, putting all of your money into a single company, no matter how well it appears to be doing, is the type of risk many people don’t want to take.
Diversify investment risk
All investing carries risk: You might lose money. Investments are not guaranteed to increase in value and are not FDIC insured.
Not investing also carries risk: Your money may lose value to inflation over time, and without putting your money to work through stock and bond markets or other financial vehicles, it can be challenging to accumulate enough for retirement.
Mutual funds provide an easy way to invest in a professionally managed portfolio consisting of dozens or even hundreds or stocks, bonds, and other securities. Mutual funds can be a great choice for people who don’t have the time, interest, or know-how to invest in individual stocks and bonds.
Exchange-traded funds, or ETFs, and index funds are similar to mutual funds in many ways, but they usually aim to copy the performance of a market index, such as the S&P 500® Index. Owning shares of mutual funds or ETFs is a little like having an investment manager working for you who requires little of your time or money.
Keep investment fees low when saving for retirement
Almost all investments have fees. For mutual funds, you might pay a commission to buy or sell a fund, an ongoing fee called an expense ratio for the fund’s management, or a sales charge. For ETFs, you’ll pay an expense ratio and possibly a commission.
ETFs are usually passively managed, meaning you’ll pay a lower expense ratio to own them; mutual funds can be actively or passively managed.
Why are fees so important? In the same way that investment returns compound over time, the effect of fees on your portfolio compounds over time. The higher your fees, the less money you have to invest, and the lower your net returns tend to be. Further, investments with higher fees have no guarantee of outperforming investments with lower fees. That’s why it’s important to do your research or hire a trusted professional to do it for you.
Transition into safer investments over time when saving for retirement
It’s important to take enough risk to meet your goals while maintaining enough safety to feel comfortable. As you get closer to retirement age, you have less time to recover from a market downturn, which means you need more safety and less risk in your portfolio.
Bottom Line
Most savings accounts don’t pay enough interest for your nest egg to support you through several decades of retirement. Investing in a careful, risk-managed way can allow you to outpace inflation and multiply your savings over the years.
Don’t want to go it alone? A financial professional can help you create a plan for your retirement.