General Insurance: 7 Basic Tenets

Insurance contracts are an exchange of risk. In return for the premium payment, the insurance company promises to compensate the insured for a loss to person or property. By pooling small payments from many customers, the insurer can extend large amounts of coverage. To make sure both parties are treated fairly and can trust the transaction, the industry has seven basic tenets of general insurance.

1.  Principle of Uberrimae fidei (Utmost Good Faith):  Both sides, the insured and the insurer, must act with good faith. Each party must give honest information and make thorough disclosures.

2. Principle of Insurable Interest:  The person seeking to benefit from the insurance must have sufficient ownership in the object, property, or interest being insured. For example, you can't take out insurance on your neighbor's house unless you own it.

3. Principle of Indemnity:  The insurer agrees, within the limits of the scope of coverage, to cover the loss. In short, the insurance company promises to "make good the loss" and restore the insured to where they were before the claim.

4. Principle of Contribution:  The insured can only recover for actual losses, even if the loss is less than the limit of coverage. If there are multiple policies, the insured can't double or triple dip. You can't make a claim for the same loss to two different insurers.

5. Principle of Subrogation:  When the insured is paid for a loss resulting from the fault of another, the insurance company has the right to seek legal recourse from that person. In short, if your car is totaled by a drunk driver and the insurance company pays your $10,000, then the insurer has the right to sue the negligent driver to recover the costs of the claim.

6. Principle of Loss Minimization:  The insured has a duty to reduce the chance of loss and to mitigate the loss. If your house catches on fire, you have a duty to call the fire department. After a loss, you have a duty, if possible, to secure the property and prevent further damage.

7. Principle of Causa Proxima (Nearest Cause):  If there is loss because of more than one reason, the insurer must look at the damage caused by the closest factor when paying the claim. For example, your street is flooded during a storm. Your house suffers only minor water damage, but catches fire because of downed power lines. You are insured for fire, but not for flood. The insured must pay the claim because you are insured for the closest or proximate cause of the damage.

The seven general tenets of insurance, at its base, is a code of ethics for both parties to the insurance contract. Any questions? Call ABM Insurance & Benefit Services, Inc. at 800-362-2809 today to review and discuss Houston business insurance or other types of insurance.

Tips for Business Owners to Handle Workers Compensation Claims

There is a huge misconception about workers compensation claims amongst business owners. It is a commonly held myth that a workers compensation policy is no more than a finance mechanism for payment of claims. Because of this, many business owners feel they would benefit more from not having a structured system of compensation claims in place. 

The truth is it doesn’t work that way, and workers compensation system involve several complex mechanisms that can help avoid potential to harm any business in more than one way. 

If a business is rated on the basis of its experience, it is important to remember that  every dollar paid on a claim will have its effect on the cost of compensation insurance. Not all employers or business owners possess the funds or expertise to do what’s necessary when employees suffer from injuries. Such poor claims management will only result in increased cost of  Houston workers compensation insurance that an employer would have to pay.

If one wishes to understand the link between insurance claims and increased cost of insurance, it is necessary to understand the mechanism of experience modification factor.

What is an experience modification factor?

To put it in simple terms, an experience modification factor is a system that compares a business’ experience of handling workers compensation claims, which is comprised of claim dollars and payroll, to those of other businesses. These businesses would not be unrelated, randomly chosen ones but would be similar businesses. Businesses with better claims have low factors of experience modification and hence their sum total of workers compensation cost is reduced. Conversely, those with poor claims experience and high factors have an increases total workers compensation cost.

How to have a better claim experience and lower the factor as an employer? 

-     Reporting all claims to the insurance company on time is important

-     Open claims should be paid extra attention. 

-     Closing the claims as quickly as possible is another important task. 

-     Working in close association with the insurance company adjuster to solve any issue could be of great help. 

-     An employer should do  everything in his power to get the injured employee back in good shape and back to work. 

Occurrence of workers compensation claim is unavoidable. It is important that a system is in perfect shape to assist the injured employer in terms of medical assistance, rehabilitation etc. The best way to do this is by being involved in the claims process and shouldering responsibilities. 

For more details on workers compensation claims and insurance, call us at 800-362-2809.

Business Function Insurance

Business events, like parties and dinners can impact the success of your company significantly. These events can be used to reward or motivate you employees, which can improve workmanship and production. That can lead to an increase in sales and profit. If you use the event to increase awareness of your company, it can attract potential clients. 

Business functions are important, but they’re also expensive to plan and host. Regardless of how much planning has gone into the event, there’s no promise that it’ll happen smoothly. There is something called special events coverage that provides protection in case a function is canceled due to weather or there’s a problem with the location. It’s also helpful in preventing loss in case a sponsor falls through or a vendor doesn’t show up or doesn’t carry out their responsibilities as agreed upon.

 Additionally, special events insurance can protect your business from legal responsibilities should an accident occur and someone is hurt or property is damaged. Even if alcohol is the reason behind the accident.

Regardless of whether the venue your function is being hosted at requires it or not, it’s wise to have special events insurance. Keep in mind special events insurance has lots of different options for coverage, as well as varies in regards to deductibles and limits, which makes premiums more affordable and flexible. Nonprofit organizations can use this insurance too, when holding fundraising events. 

Give us a call at 800-362-2809 to find out more about business function coverage and to learn about how other kinds of Houston commercial insurance can protect your business. Our agents will help you figure out the best type of insurance for your business.

The Difference Between Personal and Commercial Auto Insurance

Evident by the names, commercial auto insurance and personal auto insurance aren’t the same. One is meant for your own vehicle, while the other is meant to cover your business (or commercial) vehicle. However, the difference between the two is actually quite subtle. Personal auto insurance covers occurrences that are insurable, such as collision costs, bodily injury, theft, uninsured motorist claims, and property damage liability when caused by your personal vehicle.

There is a different set of liabilities commercial auto insurance covers. For example, imagine the person riding with you in your car isn’t a family member or friend, but instead is a client that’s paying you to take them somewhere. Or imagine your car being stolen with business supplies and equipment in it, which are owned by the client you are driving. In both of these situations, the cost for replacing the stolen items and loss of business resulting from the insurable incident might have a great impact on the claim.

The liabilities and potential cost of claims can be very different depending on whether your vehicle is commercial or personal. One more scenario to consider is if you have employees driving your commercial vehicle while on the clock. Your personal auto insurance won’t cover claims if something happens, and their personal auto coverage probably won’t either, which leaves your business exposed.

To find out more about personal and commercial auto insurance or to receive a Houston auto insurance quote, contact us.

A Guide to Insurance for the Newly Single

For someone rediscovering what it is to be single, you’ve got more to think about than just how to date during this digital era. You also have to look at your finances differently, including your insurance. Being newly single means you’re also newly independent and you might not have a source of back-up income. If you don’t then that means you should use insurance to make one for yourself.

Property Protection

If you’re divorcing or leaving a long term serious relationship, you might have had joint home and car insurance. Now, you have to think about getting these insured independently with your own policies. In regards to your home insurance, make sure you do an inventory of your home. By doing this you’ll know exactly what belongs to you and the amount of insurance you should have for the contents. Educate yourself on rebuilding costs so you’ll decide on the correct limits for your dwelling and if you reside in a flood zone, be sure to also get flood insurance since flood damage isn’t covered under home insurance.

As for auto insurance, speak with your agent about getting the correct liability limits and you can check Kelley Blue Book for an idea of what the value of your car is. Lastly, you’ll want to make sure you include a loss of use benefits for both of your policies. This is important so that in case you have an accident you’ll be able to get a rental car or if something happens that makes your home unlivable, you’ll be able to have a portion of your temporary lodging costs paid for.

Re-Evaluate Your Deductibles

Now that you have only your income, the insurance deductibles you once had with your former partner may not be fitting. Look at your savings and budget to figure out what is affordable for you.

Disability and Long-Term Care

Since you now have only your income to depend on, one of your biggest concerns should be to protect it. Having disability coverage provides you with back-up income in case you’re not able to work. Disability insurance can pay out a lot sooner than Social Security can and it can also be planned to pay more than Social Security.

As you get older, you’ll become less able to do day to day work activities, so it’ll be important to have arrangements for long-term care. When this time comes, you should let your mind decide on the type of care that you are going to receive, not just your budget. When you’re single, you have to be your own supporter, and having long-term care insurance coverage will provide you with the means to do that.

Re-Evaluate Your Beneficiaries

Should you have a life insurance policy with your former partner listed as the beneficiary, you’ll probably want to change that. If you have children, you have the option of making a trust and making it the beneficiary will guarantee that the money you leave behind goes to your children. It’ll be looked after as well, until your children are older and responsible enough to manage it on their own.

Remember the Discounts

Protecting your budget is important so you can have emergency funds set aside, but having to sacrifice your insurance policies to have money available for it isn’t how you do it. To keep from making this mistake, check with your insurance agent about the discounts you might have available to you.

We’re aware of the challenges that the newly single can face, and we’re here to help you manage it all. Call us today to begin creating your independent insurance policies.

Does Your Company need Business Interruption Insurance

A threat that faces every business owner despite of location, industry, product or service, is one of business interruption after a disaster. Without the ability to continue business for an unclear period, the owner could face increasing debt, no income and they may even lose the ability to gain financial footing through their future business prospects.

Usually, business interruption insurance will cover earnings that a company will lose over a set period of time following an insurable event, such as a fire or hurricane. Some policies may also include:

·         Extra expense coverage: If you have to run your business out of a temporary location as you repair and rebuild, you may have extraordinary expenses, which would be covered under this benefit.

·         Contingent business interruption: It’s probable that the insurable occurrence which hurts your business didn’t actually have an effect on your business location, but that of your supplier. If your business experiences a loss due to an incident at your supplier’s location, then this would cover the damages within the specified period and limits.

Together, these benefits can help you to continue to pay payroll and meet your financial obligations while conducting your business in a temporary location or waiting out the repairs to your office.

Getting Coverage

You may be able to secure business interruption coverage through its own policy, or as a piece of your commercial property insurance policy or BOP (business owner’s policy). When applying, you should consider what your losses could actually be before you pick your limit. Consider your gross profits and think about potential sales losses in terms of future sales trends as well as current and past sales experience. Talk to your agent about how your gross earnings fit in with the insurer’s coinsurance requirements, because if you underinsure your insurer could penalize you when you have a loss by reducing your claim payout by the percentage that you underinsured, even if your claim is less than or identical to your limit.

In addition, consider the expenses that you will reasonably be able to suspend while your business is out of service. If you lease your space then you may not need to pay rent during the months that the area is inaccessible and being rebuilt. But you may be forced to pay rent again once the space is restored, even if you need to spend that time restocking.

Business interruption insurance can be a reasonably priced, but important piece of your Houston commercial insurance plan. Give us a call at 888-356-6448 today to talk about just how much it can help defend your business.

The Benefits of Product Liability Insurance

If you are introducing a new product to the public, either of your own design or your supplier’s, then you have an exciting time of discovery ahead of you. Watching the results as your product finds its way into the homes of all your customers, and seeing the difference that it makes in their lives, is powerful. Although, if you manufacture, design or sell a product, and it is found to be defective, dangerous or lacks proper package warnings then the product could be a liability claim waiting to happen.

By including product liability insurance in your business plan, you can ensure that you get the coverage you need before your product hits consumers’ shopping baskets.

What Product Liability Insurance Protects

There are three incidents that a product liability policy will protect designers, manufacturers and retailers from:

• Design defects: No matter how many tests you run on your product designs, it’s possible that you missed some angle that makes your design unsafe.
• Manufacturing defects: If the wrong materials are used when making the product or the production process results in a defect that could damage an individual, then you could be liable for damages. 
• Marketing defects: Manufacturers have a responsibility to warn customers about potential dangers in their products. If the products you make or sell lack sufficient warnings, you could be sued for damages.

Some might wonder why a retailer could be held responsible for damages that are the fault of a manufacturer or designer. In some states, they may not be, but in other states, retailers will be held liable for at least some portion of damages because they will be considered negligent by introducing these products to their customers. If the product manufacturer has coverage for vendors built into their policy, retailers may not need their own.

The premiums you pay and the coverage you qualify for will be partially dependent on how high risk your product is and whether or not you’ve had claims in the past. It’s important to remember that a general liability policy may not have sufficient coverage for product liability and may even exclude it entirely. If you aren’t sure whether or not your current policy will hold up in the face of a claim, give us a call at (800) 362-2809. We can review your Houston liability insurance policies and offer guidance on keeping your company, and your assets, secure.

What to do after a Fire

Putting your life back in order after a traumatic event can be difficult. Rebuilding after a fire though, can be especially challenging. You’re not only coping with the emotional aftermath, but, you will also need to organize your salvageable possessions. Arranging temporary housing for your family until your home is livable again only compounds the issue. When you’re prepared for the destruction that a fire brings BEFORE it happens you can be better equipped for a disaster should it happen to your family.

1. First and foremost make sure your family has a safe place to stay should a fire happen. You will need to have a place to sleep, clothes to wear and a place to bathe. If you take medications, wear eyeglasses, use prosthetics, or need any other essentials you should contact local charitable and emergency management organizations for assistance. If they cannot provide for you, they will most likely be able to point you in the right direction.
2. Contact your family to let them know you’re in a safe place and where you can be contacted. A fire could be a big story for local news stations and leaving your loved ones to find out about it that way could cause unnecessary stress.  You can also ask a friend to post a message on Facebook or other social networking sites to alert other friends and family that you are safe.
3. Do not visit your property or the remains of your home until you get the all-clear from the fire department.
4. Call your insurance agent to file a claim as soon as possible. You should do your best to leave the remains intact until the claims adjuster arrives. Do not sort through the rubble or begin any cleanup efforts until after the insurance adjuster has met with you and completed the list of personal effects that are missing or damaged. You should also give your adjuster your home inventory. If you do not have a home-inventory, there are several home-inventory apps you can download to your mobile phone. The home-inventory will then be backed up to a server where it is safe and can be accessed when needed. Complete a home-inventory before disaster strikes rather than scrambling after one has happened.
5. Salvageable items can be removed after an adjuster has begun the claims process. Don’t assume that just because an item looks intact that it actually is. Find out how to properly clean and restore them so you’re sure they are safe to use.
6. Let your post office know to forward or hold your mail until you are able to come back home. You should also consider having your utilities temporarily shut off since you’ll not be using them for some time.

For more details about how to safely handle yourself after a fire, you can visit the U.S. Fire Administration website. Call us to discuss your Houston home insurance options in the event of a fire to your home or business at 888-356-6448.

Types of Business Personal Property Coverage

In order to protect property owned by your company it’s wise to invest in Business Personal Property Coverage. For your commercial property to be covered it must be on or within a building in the business premises. Items in a vehicle or items located within 100 feet of the business are also covered.
There are a total of five different classes of items covered:

• Property of others that is in the care, custody or control of the insured: Some businesses, like repair shops, hold onto the property of their clients while they are working on it or with it for business purposes. This property can still be damaged or stolen while in the business’ possession and, therefore, needs to be covered so that the business is not liable for its customer’s losses.
• Leased personal property with contractual requirement to insure: Not all equipment used by a business might be owned by them. Instead, many businesses lease or rent bigger, more expensive items like computers, copiers or machines. In this case, if a lease or rental agreement contract requires that the business owner insure the property, it becomes covered under the business personal property coverage.
• Tenants improvements and betterments: If you rent or lease your office or retail space, and you make improvements to that space by adding shelves, lights, or other fixtures and alterations, then tenants improvements and betterments will reimburse you for the value of these improvements if they are lost or damaged in an insurable incident. Remember, the property owner’s business insurance policy will not cover your property or betterments.
• Exterior building glass: This class is also for tenants of buildings. Many businesses have special, decorated and lettered glass for their business’ front. If this glass is damaged in an insurable incident, it might not be covered by the property owner’s policy since it is considered under your care and custody as the lessee or renter.
• Property owned by the business and used in the business: Most contents or property will probably fall into this category. It covers all property and equipment that was purchased by the business and used in the business. This could mean machines, computers, ovens, etc. There may be special exclusions or conditions for property that is used for both personal and business needs.

Your business is your ticket to success and financial freedom. Protecting it with the right insurance coverage ensures that your business will continue to provide for you after an insurable event. You can also be assured that you will not lose your personal assets trying to recover from one.Call us today at 888-356-6448 for a free Houston Business Insurance quote.

Business & Commercial Insurance in Houston TX

General Liability

If you have a personal umbrella liability policy, there's generally an exclusion for business-related liability. Make sure you have sufficient auto liability coverage.

Unfortunately for every business owner, the chances of getting sued have dramatically increased in the last decade. General Liability insurance can prevent a legal suit from turning into a financial disaster by providing financial protection in case your business is ever sued or held legally responsible for some injury or damage.

General Liability pays losses arising from real or alleged bodily injury, property damage, or personal injury on your business premises or arising from your operations. The Hartford's liability programs extend far beyond the provisions of typical policies, with broadened coverage and increased limits in over 30 areas.

Workers Compensation

Workers compensation laws were created to ensure that employees who are injured on the job are provided with fixed monetary awards. This eliminates the need for litigation and creates an easier process for the employee. It also helps control the financial risks for employers since many states limit the amount an injured employee can recover from an employer.

Workers Compensation Insurance is designed to help companies pay these benefits. As a protection for employees, most states require that employers carry some form of Workers Compensation Insurance. Workers Compensation Insurance is not health insurance. Workers Compensation is designed specifically for injuries sustained on the job.

In most states, if you have employees, you are required to carry Workers Compensation coverage. Even in non-mandatory states, it can be a very good idea, particularly if you have many employees, or if they are engaged in hazardous activities.

Let ABM Insurance & Benefit Services, Inc. find coverage that meets your needs and your budget. Call us for a fast, FREE Houston business insurance quote! We have access to multiple insurance companies for your business & commercial and workers compensation coverage throughout the Houston, Spring, Conroe and Webster areas in Texas.