Why You Should Consider Life Insurance If You Own A Business

By: William Forbes

We have a quote printed on the wall of our office from financial guru, Suze Orman, which says, "If a child, a spouse, a life partner, or a parent depends on you and your income, you need life insurance." This quote sums up pretty perfectly why you would need life insurance on a personal level. But, what about the people who depend on you in a business capacity?

Are you the owner of a business, or are you a partner in a business? If yes, then you have people who depend on you for the success of the business and their financial livelihood.

When a key member of a business passes, it can mean a few things for his/her family, as well as for the other employees: the sale of the business, the retention of the business, or liquidation of the business. The point here is to avoid liquidation, as it often results in a below market value.

There are several types of life insurance policies that can be beneficial for business use and to help prevent a company's liquidation upon the passing of an owner or key employee:

  1. Buy and Sell Policy. In a sole proprietorship, this policy is designed to allow competent associates of the deceased to purchase the business, using life insurance for funding. This means that if anything ever happened to you as the owner, your associates would have the proper funding needed to purchase the business and keep it running. Or, alternatively, your family would have the funds needed to keep the company running through a proper sale process.
  2. Cross Purchase Plan. In a partnership, each partner would purchase a buy and sell agreement on the others, naming himself as the beneficiary and the others as insureds. This would give each partner the proper funding to purchase a set share of the deceased partner's interest.
  3. Key Person. Most often used by corporations, here a business owner would take a life insurance policy out on a key employee (think CEO or other top executive). If the key employee ever died, the company would be the beneficiary of the policy, which would provide funding while a replacement was being trained.

These are just a few examples of using a life insurance policy to protect your business. For more information on these and other options, talk to our agency. Life insurance can provide needed security for more than just your immediate family members.

PA Employers May See Workers' Compensation Rate Increases

By: William Forbes

Pennsylvania employers could be facing an increase in workers' compensation rates starting in November, due to a Pennsylvania Supreme Court decision. 

According to this recent article in the Pittsburgh Post-Gazette, "The court struck down a key part of the workers’ compensation law passed in 1996 to limit benefits for the most severe workplace injuries. Under that provision, an employer’s insurance provider could request that injured workers undergo a medical assessment after two years out of the workplace."

If the medical assessment found that the employee was less than 50% injured at that time, then the insurer was able to cap partial benefits at 10 years. However, if the employee was found to be more than 50% injured, he/she was able to receive full benefits for life.

The new ruling dictates that these medical assessments will not happen, which means more workers could end up receiving lifetime benefits. As a result of these and other changes made by the court, the Pennsylvania Compensation Rating Bureau proposed a cost hike that, if approved, will take effect after November 1.

For more information on the rate hike, and the court's ruling, see the full article in the Pittsburgh Post-Gazette: http://www.post-gazette.com/business/career-workplace/2017/08/24/Workers-compensation-insurance-court-ruling-premiums/stories/201708230302

For questions about your workers' compensation policy, contact your agent. 

Who Insures Interior Improvements In Your Rented Office Space

By: Nicole Vattimo

If you lease a building or office for your business, did you know it is your responsibility to insure interior improvements and alterations? If you are renovating the interior of your rented office space, talk to your insurance agent about insuring things like: flooring, light fixtures, wall coverings, wiring, plumbing, cabinets, shelving, or anything else that is attached to the ceiling, walls, or floors.

It is not usually your landlord's responsibility to insure these types of items. And, if you don't add them to your business policy, you may be underinsured.

For more on this topic, check out ErieSensehttps://www.erieinsurance.com/blog/business-betterment-general-business?utm_source=businessbuzz&utm_medium=email&utm_campaign=Agent_June_BusinessSense_27062017_141234&utm_content=22957579&utm_term=_141234_141241.

Commercial Auto Policies: Hired and Non-Owned Coverage

By: William Forbes

This is a great article from ErieSense on commercial auto policies and some of the coverages they offer (link here). I wanted to specifically highlight something called "hired and non-owned" coverage.

This coverage protects you, the business owner, when your employees are driving their personal vehicles for work use. And, also, when your employees rent vehicles for business use. It provides liability coverage if you are sued following an accident.

It's important to remember that coverage is not automatically extended to an employee's personal vehicle, when he/she is driving it for work use. To get this protection, you must have hired and non-owned coverage on your business auto policy.

If you are a business owner with a commercial auto policy, talk to your agent to verify your coverages.

(Full link to article: https://www.erieinsurance.com/blog/business-auto-coverage)

The Difference Between A Certificate of Insurance and An Additional Insured

By: William Forbes

Erie just published a great blog post (link here) on the difference between a certificate of insurance and being an additional insured. For all our commercial clients out there, I wanted to highlight this post as good educational reading.

As the blog post points out, "The key difference between a certificate of insurance and an additional insured comes down to whether you have coverage under someone else’s insurance policy."

A certificate of insurance proves the insurance and limits are in force. The certificate simply verifies that an individual or company has valid insurance.

The purpose of being an additional insured on a policy is more sophisticated. Being an additional insured provides insurance coverage and rights to defense under the policy. If you are named an “additional insured,” you are given coverage and some rights under the policy, in the event of a claim.

Typically, an additional insured is a general contractor who will obtain the benefits of insurance protection under a subcontractor's policy.

As a business owner, it's important to understand the difference here. I recommend taking a read of Erie's post, which gets into greater detail on this topic. And, always feel free to give us a call with specific questions.

Full Link to Post: https://www.erieinsurance.com/blog/certificate-of-insurance

Insurance Concept of the Week: Judgement Rates

Each week we will post and define an industry term or concept for our readers.

To conclude our discussion of rates, judgement rates are determined and applied to individual insureds by the insurance company. Judgement rates are used for commercial insurance. Each insured is evaluated on its own merits and chance of loss.

Check out all our posts on rates: 

1. What is a rate (link here)
2. Manual/class rates (link here)
3. Merit rates (link here)

Insurance Concept of the Week: Commercial Package Policy

Each week we will post and define an industry term or concept for our readers.

A commercial package policy is a business insurance policy that includes multiple coverage parts. It is beneficial for the insured because it minimizes gaps in coverage, and often it includes package discounts that lower the total premium for the customer. Examples of coverages usually included in a commercial package policy are: commercial property, general liability, and commercial automobile insurance.

Give us a call to find out more about our commercial offerings.