What Types of Liability Insurance Are Necessary?

Business owners face numerous risks anytime they open their doors. It's possible that business liability insurance may be one of the most important investments a company can make. Yet, many small business owners are uninsured. Liability insurance protects a business from mistakes, accidents and other risks that could otherwise financially bankrupt the organization. The following are the most commonly sought after types of liability insurance.

General Liability Insurance

A basic plan that nearly all businesses should have is Houston general liability insurance. It adds a layer of protection to cover any type of hassle related to accidents, negligence claims, or injuries. This policy provides the business with protection from an assortment of risks including the following:

• The cost of defending against a lawsuit
• Property damage costs
• Costs related to bodily injury claims
• Costs related to someone's medical expenses being paid
• Libel defense charges
• Costs associated with defending against slander
• Cost of settlement bonds
• Cost of judgments

The risks for this type of insurance are very clearly present. If a customer falls on the property, this policy protects the company. If an employee makes claims that are not accurate and someone sues the business, this policy may help.

Product Liability Insurance

Most companies sell a product. That product, when made, distributed and used properly gives some type of benefit. Yet, mistakes can happen. Product liability insurance provides the company with protections necessary for any organization that manufactures, distributes, sells, or wholesales any type of product. It is a type of liability policy protecting the company from having to pay for losses. This generally has to do with defects that cause a person harm.

Product liability insurance is necessary for most organizations selling something. However, the type, amount, and the need for it range significantly between one company and another. For example, a company selling auto parts will have a higher need for this type of liability insurance than one selling baby clothing.

Professional Liability Insurance

If you do not sell a product, you may provide a service. This also puts you at risk. In this case, though, the defect is not in the product, but in the service. Business owners selling a service need professional liability insurance. It is sometimes called errors and omissions insurance as well. It can protect against risks such as:

• Errors you make when making a statement or selling the service
• Malpractice, commonly associated with doctors and medical professionals, but can also be associated with lawyers and numerous other professions
• Negligence claims

Some types of businesses must have professional liability insurance in order to have an active license. For example, most states require doctors to maintain a malpractice policy.

Business liability insurance may seem complex, but it does not have to be. By having it, though, you reduce the risk of financial loss or even having to shut your doors when someone files a claim against the business. If you give ABM Insurance a call today at 800-362-2809, we would be happy to help you to determine what types of liability risks you have and how adequately to defend against those risks.

What Is a No-Claims Bonus?

In insurance, a no-claims bonus is a benefit extended to those who have not made any claims in the previous year. It is mainly used in the Houston auto insurance industry to mean a reduction in the amount of premiums paid in the following year. Since you are rewarded for each year you do not make a claim, you can enjoy substantial savings on your yearly insurance premiums.

Transfer and Duration of Coverage

Most insurers will allow you to transfer your no-claims bonus from one policy to another. They just need to make sure that the last policy you had expired within a specific number of years, which for most firms are two or three years. This is not an industry-wide regulation, however, because some firms may not recognize your bonus if you have had a break in your coverage. On the other hand, your no-claims bonus will not expire as long as your coverage is intact and you do not make any claims. The percentage of the bonus you lose when you do make a claim depends on your insurance provider.

Protected No-claims Bonus

Most insurance companies have a program called protected no-claims bonus. This program allows you to hold a given number of claims without losing your no-claims bonus. You should note, however, that this protection does not preclude you from paying relatively higher premiums. If you are assessed as a more likely to have more claims, your premiums may rise accordingly. In this case, you only stand to benefit marginally from your no-claims bonus status. Thus, the protected no-claims bonus stands to save you some money even if you do make a claim.

 

Increasing Your Chances for the Bonus

To enjoy your no-claims bonus, you need to do everything in your power to avoid situations that may entail you making a claim. Some of the measures you need to make include:

 

Concentrate while driving

This may sound like a relatively simple advice but the reality is that many drivers get distracted whilst on the road. In fact, you can easily be distracted even while using some of the car technology meant to help you such as satellite navigation.

 

Maintain Your Car

Ensure that your car is well maintained and serviced regularly. The tires should have adequate threads and should be inflated properly, and the windscreen washers should be functional.

 

Eligible Drivers

Most insurers will only allow a car's owner to benefit from the no-claims bonus, but there are exceptions. A few insurance companies will allow a few other named drivers to enjoy no-claims discounts on your car. This is a great advantage for these drivers, especially when they move to their own policies. You should also note that a no-claims bonus is limited to a single vehicle, and if you buy an additional one, you should not expect the bonus to cover them both.


Call ABM Insurance at 800-362-2809 to get your auto insurance quote today!

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.