5 days ago ·
by Mrs. Mapp ·
What are the essentials needed to operate a successful business? Qualities like entrepreneurship, creativity, leadership, organization and a strong work ethic probably come to mind. And these are all important traits.
But business owners may want to look beyond these traits to something that is often overlooked: Proper insurance coverage. This is one of the most important instruments in a business owner’s toolkit. Why? Because without appropriate insurance coverage, a business may not be able to weather a disaster. And it could mean the loss of everything he or she has worked so hard to achieve. For many, a Business Owner Policy (BOP) will provide that much-needed sense of security at a reasonable cost.
What is a Business Owners Policy?
BOP stands for business owner policy. A BOP is an insurance package available for business owners that combines basic coverages into one bundle.
What does a Business Owners Policy cover?
BOP policies typically cover three major areas of business protection. A standard BOP includes property insurance for the company’s buildings and contents; liability protection for harm caused by employees, defective products, faulty installations, and service errors; and business interruption insurance, which covers loss of income due to a disaster.
What does a Business Owners Policy not cover?
While a BOP covers many of the basics, it’s not comprehensive. Business owners still may need more-specific policies, depending on the type of company and products or services provided. A BOP also doesn’t cover workers’ compensation, health and disability insurance, professional liability, or auto insurance.
Who is eligible for a Business Owners Policy?
This insurance policy is designed for small to medium-sized businesses. Typically, a company must meet the requirements set forth by the insurance carrier to qualify for a BOP.
These parameters usually include the number of employees, type of business, and yearly revenue. Larger businesses qualify for different types of policies that are more appropriate for their needs.
Who needs a Business Owners Policy?
Some industries may also need special insurance in order to operate. For example, a minimum amount of liability insurance may be required to perform contractor services.
While you don’t have to choose this bundle option, it is an easy solution for many small and medium-sized businesses.
What are the advantages of a Business Owners Policy?
Choosing a BOP typically saves money. By bundling several services in one policy, business owners pay less than the total cost of individual coverages. This option keeps costs down while providing coverage for the business’s basic needs.
How much does a Business Owners Policy cost?
The yearly premium for a BOP depends on many variables. One business may need higher liability coverage, while another may need greater property protection. The pricing for each BOP is determined by these needs and the risk factor of the company. Typical premiums range from $500 to $3,500 per year.
How do I get a Business Owners Policy?
If you live in New York give us a call to discuss the BOP options available for your business. We will discuss how you can bundle the specific coverage you need into an appropriate and affordable BOP that’s just right for your company.
2 weeks ago ·
by Mrs. Mapp ·
It’s inevitable. As a small business owner, you will wear many, many hats.
Technical support staff.
But while this type of task juggling is to be expected, you have to be aware that not all of your hats are created equal. Marketing outweighs bookkeeping, for example, because without marketing, there will be no cash to manage.
Not only that, but you have to consider how much time you’re spending in each area as well. If you spend all day tweaking the design on your website and put off sending an email to your list, what have you gained?
Sure, you might have a prettier website, but you lost an opportunity to drive traffic to your offer.
In an ideal world, you’d simply put on your CEO hat and delegate the rest, but here in the real world, we don’t always have that option. Instead, we have to work smarter and take care how we’re spending our time.
Prioritize Your Daily Tasks
We all have different skills and sweet spots when it comes to the tasks we want and need to do. You might love customer support and hate bookkeeping, while someone else enjoys the numbers game and doesn’t like dealing with the help desk. But regardless of your personal preferences, one thing is certain: money-making tasks should be at the very top of your to-do list.
That might mean product creation, email marketing, client outreach, webinar development, or something entirely different. Identify those money-making tasks in your business and be sure to prioritize them every single day.
Know the Difference Between Important and Urgent
In his classic book, The 7 Habits of Highly Effective People, Stephen Covey recommends prioritizing tasks based on a time-management grid. Every task is assigned to a quadrant of the grid, based on whether it is urgent, important, both, or neither.
Once you know where a task falls on the grid, you’ll immediately know what you should be working on. For example, marketing and planning are important but not urgent. A ringing phone is urgent, but not important. The sales page for your new program, which is launching tomorrow, is both urgent AND important.
So, before you prioritize your daily to-do list, think about where each of your tasks falls in the quadrant, and schedule them accordingly.
Will you always be working on the best task for right now? Probably not. Nor will you always use your time as wisely as you could. But by making a conscious effort to organize and prioritize your days, you’ll find it’s a lot less stressful and overwhelming to manage your small business.
3 weeks ago ·
by Mrs. Mapp ·
Happy New Year, Entrepreneurs!!!
Have you listed your upcoming New Year resolutions? Here’s one suggestion that business owners may want to add to their resolution list—review your business insurance policies.
It may help boost your bottom line in 2018.
The end of the year is a good time to review your policies in light of the events of the previous year. A quick evaluation of your coverage could help you save next year. And who doesn’t want that? Here are the steps to take:
Step 1. Review your business: What changes have you made this year, if any? Has your business grown? Have you altered any policies that could affect your insurance? Did you add or remove vehicles, employees, or facilities?
Step 2. Make a list: Make a list of any changes that will affect your business going forward. Note any new procedures you put into effect this year, as well as any you will be enacting in 2018. Write down any questions you have about your coverage.
Step 3. Contact your carrier: With your list in hand, contact your insurance agent. He or she will help you review your current policies to determine if they are still the best options for your business. For example, you may have made changes that will reduce your premiums, or you may be eligible for new discounts.
Step 4. Review Your Profit and Loss Statements
This will give you a snapshot of your business financial performance and what you didn’t do well in 2017 financially. These should take place at regular intervals, such as every month, to make sure your business is going in the right direction.
When the year comes to a close, gather all of your bank statements from that year for review. A bank reconciliation can also be used to detect cases where fraud has occurred so that you can then develop better controls to govern your bookkeeping system for next year.
This easy process will ensure you have the appropriate coverage and could help you save significantly on your 2018 business insurance. And saving money is one of the best resolutions you can make. If you don’t have a carrier; give us a call to make sure you’re properly covered.
2 months ago ·
by Mrs. Mapp ·
As a savvy business owner, there’s no doubt that you’ve looked into basic commercial insurance coverage and its cost. So you may recognize the two most common business insurance policies: general liability and property damage.
Depending on the type of business you own, there’s one important thing you may have missed in reviewing the options available. That is, unless your electrical and/or mechanical equipment is damaged by one of the general perils specifically listed on your property damage policy, you won’t be covered if you have to replace or repair it.
A few examples of commonly covered perils are events such as fire, wind, hail, smoke, and civil unrest. However, the average policy usually doesn’t include any coverage for mechanical breakdown. And not having the proper endorsement to properly protect your equipment could shut down your business for days or weeks, during which time your income and profits could all but cease.
Who needs it?
If the extent of your business’s equipment is a small cash register and a phone, and/or if you rent a space where the owner provides maintenance, heat, and air, you may find that you’re not going to need mechanical breakdown coverage as an essential part of your commercial insurance coverage, providing, of course, you have saved up the money towards replacing or repairing your cash register and phone in the event of a non-covered loss.
Those business owners who should be especially concerned about equipment breakdown coverage are companies that have any or all of the following: manufacturing equipment; more than one computer; refrigeration; boiler systems; cooking equipment; generators; motors; fire and security systems.
Equipment breakdown coverage is important whether you own or lease the equipment. To protect themselves, leasing companies will often require you to carry this protection, not unlike an auto lender that insists you carry comprehensive and collision coverage on your auto insurance policy when you’re financing a car.
This policy will cover labor and other costs of repairing equipment, not just replacing it. There are other residual losses that may occur due to the breakdown that are also covered. For example, if you own a restaurant and your freezer breaks, causing you to lose thousands of dollars’ worth of frozen food, that would be covered.
Clean-up services may also be covered if the breakdown causes a mess. One of its greatest benefits is that it will also cover any loss of business you experience while getting the equipment repaired or replaced.
Some insurance companies will offer equipment breakdown as a separate policy, or it can be added as an endorsement – a special addition – to your existing commercial insurance policy.
Ask your insurance professional if there are differences in the coverage limits and options, so you can make a well-informed decision about which option would be better for you.
Prepare and protect the flow of your business to ensure minimal interruption if something or, as sometimes happens, everything breaks down. Your business account (and your personal checking account) will thank you.
3 months ago ·
by Mrs. Mapp ·
Happy Halloween! Today is an important reminder about storing any flammable materials in your business.
If your business involves the storage of flammable/explosive material—even if you’re only storing gasoline for use in company vehicles—it’s essential to obtain the insurance coverage you need to protect yourself from damages in case of an event. Here are guidelines to help you navigate the tricky waters involved in storing hazardous material:
Pollution Liability: If you store any potentially hazardous material, including gasoline, you may be required to have pollution liability insurance to protect you should the material leak into a water source or cause a fire or explosion. Cleanup from these events is extremely costly, as are other liability costs, including injuries or death.
Fireworks Insurance: The storage of pyrotechnics involves myriad regulations. For insurance purposes, general liability insurance will typically cover fireworks storage. However, because of the many classifications and requirements around the storage of fireworks, it’s important to check with your agent to ensure your liability limits are sufficient.
Storage of fireworks is also regulated by the Department of Alcohol, Tobacco, and Firearms; the Department of Transportation; and the Consumer Product Safety Commission. It’s vital you are in compliance with regulations from all these agencies. The National Fireworks Association and your insurance agent can give you more information.
It’s important to realize that many products are considered hazardous materials, and you will need the appropriate insurance if you store them. Your insurance advisor will help ensure your limits are appropriate to your business and the policy based on the type, amount, and potential hazards of the material stored.
3 months ago ·
by Mrs. Mapp ·
More companies are outsourcing jobs to freelancers or independent contractors (ICs). According to the Bureau of Labor Statistics, the number of freelancers and ICs has grown dramatically in the last few years and is expected to continue rising.
Many freelancers and ICs themselves have failed to keep up with the times; these days you need commercial insurance more than ever, but few realize that without it, they’re setting themselves up for big risks. Contractors and freelancers essentially share the same risks as small businesses. Consider yourself a type of small business, and protect yourself as such.
As soon as you start freelancing or work as an IC, you need insurance. Essentially, every freelancer and independent contractor needs professional liability insurance, even sole proprietors, such as writers or accountants. Depending on your job, you may need other types of commercial insurance as well.
Freelancers and ICs are often considered experts. Most projects involve working with another business or individual, meaning that if a business loss results from a project done by an IC, he or she is financially liable for that loss and other resulting damages.
Several types of commercial liability policies are available for both ICs and freelancers, although what is needed depends on your line of work, job functions, and other factors (such as whether you see customers at your own place of business or drive a vehicle solely for work). These factors help determine what coverage is needed.
Types of insurance:
Professional Liability Insurance
Often referred to as professional indemnity insurance, and sometimes as independent contractor liability insurance, this policy protects against possible claims from clients, such as a costly mistake that the contractor may be liable for. It provides liability coverage in different amounts and helps cover costs of liability claims should the claimant prove contractor liability.
Product Liability Insurance
If you create products or items others will use, purchasing product liability insurance is a must. For example, a freelance computer software consultant is hired by a company to build software programs for them. Shortly thereafter, the software crashes, deleting all the information in the company’s database and potentially leading to multiple lawsuits on a number of grounds.
Cyber Liability Insurance
Cyber liability essentially provides protection against losses related to electronic storage – something not usually covered under regular commercial policies. This protects you if one of your clients and/or the client’s customers experience losses due to unintentional or purposeful negligence on your part.
For example, a freelance computer software developer builds a database for a company that stores sensitive, personal information on their customers. It’s hacked, and a customer’s identity is stolen. The customer could sue the company, and the company could, in turn, sue the freelancer for a number of things, such as loss of business, costs of obtaining new databases and security features, and more.
If you’re an IC or freelancer, discuss liability policies, as well as commercial auto insurance, physical premises liability, and other types of coverages with your agent, for your own peace of mind.
3 months ago ·
by Mrs. Mapp ·
If you provide B2B services, it’s not unlikely a client will someday ask the question, “Can you add me to your Errors & Omissions (E&O) Insurance policy?” It’s happened to real estate brokers, financial planners, and even insurance professionals. And the best answer is probably no. Here’s why.
E&O coverage is a type of liability insurance. It protects you if you become legally liable in a situation where a client is harmed in some way due to the service you provide. This includes negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. None of this is covered by general liability insurance.
Sharing your E&O
Your E&O policy will typically cover court costs and settlements up to the amount detailed in the policy. You need it. But when you act on behalf of another company, that company may also be affected by your actions. And sued. So, should you make that company an Additional Insured (AI) so it will be covered under your policy?
There are good reasons why not:
- The contract may not allow the third party to be added as an AI.
- As E&O policies are industry-specific, the AI’s operations may differ from yours, so it’s hard to cover both in the same policy. The coverage may not be relevant to the AI’s needs.
- If the AI decides to sue yo but is on the same policy, its suit will likely fall under an insured vs. insured exclusion clause. And the insurer may not cover either of you.
3 months ago ·
by Mrs. Mapp ·
Your business plan for 2017 might look nothing like your competitor’s. But they likely have a common theme: Boost the bottom line. Of the many ways to do this, one method is simple: Cut your insurance costs. How?
Here are some tips for business owners:
Fewer claims = savings. Set up procedures that prevent potential claims. Burglar alarms, employee training, and slip-and-fall precautions are great examples. Make a list of your biggest potential losses from accidents, and set up ways to prevent or minimize them. Having the appropriate measures in place will keep your operations running smoothly and your insurance costs low.
Bundle it up
Small businesses are often eligible for a business owner’s policy (BOP). This typically bundles your general liability, property, business interruption, and other riders together in one policy at a discounted rate. Check with your agent to see if your business qualifies. Common requirements include a business location and a low-risk profile.
There are hundreds of worker’s compensation class codes that correspond to various positions. Each has its own ranking for potential risks, and each has its own price. Since your worker’s comp premium is based partly on your class codes, be sure you have designated each employee correctly. Don’t overpay by placing employees in a higher-risk code than required. It might seem simpler to tag everyone under one code, but this is rarely the right move.
Lump your sum
Many business owners pay for their coverage on a monthly basis. This is often done for budgeting purposes. However, paying annually might save you money. Ask your agent about payment plan options that could reduce your overall cost.
What are your current policy deductibles and limits? Have you reviewed them lately? If you have a fairly low risk, it could be worth taking on a higher deductible to lower your premium. If your business has changed in the past year, you may be able to lower your policy limits. Or if you need to raise your limits, an additional umbrella policy might be the best option.
Make it a habit to review your policies at the end of each year with your agent to see what changes might save you money in the next four quarters.
Consider beefing up your safety measures in the next year. A safe work environment reduces worker’s comp claims and liability lawsuits. Develop or strengthen safety-training programs. Have all new employees are properly trained in your safety measures. Host workshops and training sessions regularly to ensure everyone is engaged. Incentivize safety by rewarding employees who maintain good records.
Ask your agent
Don’t let the calendar flip without contacting your agent. A quick call to your provider could save you crucial dollars in the next year. Your insurance pro is a valuable resource. Keep lines of communication open as your business needs change. This will ensure your policies not only meet your current demands, but also take less of your hard-earned money.
3 months ago ·
by Mrs. Mapp ·
Regardless of the size of your business, bookkeeping is something you need to stay on top of. Even if you’re self-employed, it’s necessary to keep track of the financial side of things. It’s the best way to ensure that your business grows and remains profitable.
Continue reading to find out more about why bookkeeping is so important to small businesses. Some of the reasons may surprise you.
1. Paying Bills on Time
A bookkeeping system, even the most simple one, goes a long way in assisting you in paying your bills on time. This includes loan payments, invoices, rent, utilities, etc. Falling behind on bills is generally the number one reason why small businesses fold.
2. Planning Ahead
Every business owner needs to plan ahead, to some extent. Think of it as budgeting. Accounting helps you do this by allowing you to look at your current cash flow and earmark funds for future purchases.
Proper bookkeeping also allows you to think about downsizing, if necessary. Many times, businesses don’t show a profit as quickly as anticipated. It’s just a fact of life. By keeping an eye on your finances, you’ll know if and when you have to cut back.
3. Avoiding a Tax Audit
Unfortunately, one of the quickest ways to get audited is by having messy and/or incomplete tax records. This type of juvenile bookkeeping is one of the biggest triggers when it comes to IRS audits.
It’s far better to take the time and energy to keep your books up to date, rather than spending countless (and unnecessary) hours complying with an auditor. In the event you still get audited, having everything in order makes the process go much more smoothly.
4. Getting Deductions
As a small business owner, it behooves you to take advantage of every legitimate tax deduction you can. The money you save on taxes can be put back into the business to help it grow. When you don’t keep track of financial details, there’s a greater chance that you’ll overlook some of the deductions that you qualify for.
5. Setting Goals
One of the best ways to be successful with a small business is to set goals for yourself. Ask yourself questions like, “How am I doing?” and, “Can I really afford to expand?” Adequate bookkeeping helps to answer these questions and allows you to set realistic goals for the future.
If you’re not good with numbers, there’s no reason to panic. There are several excellent accounting software choices which you can use to manage your own books. Online versions make it even simpler. They include:
* QuickBooks Online – http://www.intuit.com/quickbooks-accounting-software/
* Kashoo Online Accounting – https://www.kashoo.com
* Wave Accounting (free and paid version) – https://www.waveapps.com/
* FreshBooks – http://www.freshbooks.com/
* Zoho Books (great for micro-businesses) – https://www.zoho.com/books/
You also have the option of hiring East Harlem Tax Service as your bookkeeper. The money you spend is worth it when you consider that he or she will help to ensure the highest degree of business success.
These are just a few reasons why accounting is so important for every small business. Competition is tough, regardless of the industry. It’s vital to do all you can do to persevere.
3 months ago ·
by Mrs. Mapp ·
10 Insurance Terms You Must Understand
In a virtual world, your commercial insurance policy can seem like just so much more boring paperwork. However, if you’re a business owner, get over it; it’s essential you read and completely understand your policy, however boring. To get you to that place, here are some common – and important – business insurance terms you need to know:
Actual Cash Value (ACV): This refers to the cost of replacing destroyed or damaged property with like or similar property. However, depreciation is taken into account, so whatever the insurer pays to replace the property will have deductions for depreciation.
For example, a surround-sound system installed in your restaurant 10 years ago is destroyed in an electrical fire. Your insurance would pay an amount to replace it with a similar or like an item, less any depreciation value to account for value lost over a decade. If you have high-value items such as electronics, artwork, or antiques, consider replacement cost coverage, which allows a higher claim payout, because it doesn’t deduct for depreciation.
Act of God: These are naturally occurring perils over which policyholders have no control, such as earthquakes, devastating windstorms, typhoons, or similar events.
Aggregate limit: An aggregate limit is the maximum amount you can receive for a specified period of time. For example, you may have an aggregate limit of $200,000 for one year, which would mean that regardless of how many separate claims you make, once your policy pays out that amount for the year, it won’t pay more. Some policies have general aggregate limits, meaning the total amount your insurer will ever pay, regardless of how many claims.
Exclusion: These are “named provisions” that specifically identify items that aren’t covered, including losses occurring from specified actions or issues.
All-Risk policy: This policy will pay for losses regardless of the reason the loss occurred.
Named Perils policy: The exact opposite of an “all-risk” policy, “named perils” specifically defines what causes of loss will be covered. Usually, these include vandalism, fire, or acts of nature. This policy provides coverage ONLY for events listed in the policy, and although it’s usually very affordable, it offers very limited coverage.
Valued policy: Also referred to as an “agreed amount” policy, this states that an event resulting in a complete and total loss will be covered up to a specific, pre-determined amount as stated in the policy.
Endorsements: These are provisions added to a policy that provides extra coverage, alter a policy in some way to account for special coverage needs, or define exclusions or inclusions. Often referred to as “riders”, they can be thought of as amendments to policies.
Real Property: This refers to things such as the land or items permanently affixed or attached to it: sheds, detached garages, permanent fixtures like fences, and sometimes heavy machinery and equipment.
Personal Property: Personal property is different from real property in that personal property is easy to relocate. If you turned your building upside down, anything that falls out is considered personal property, such as furniture, computers, and office equipment.
This is why it’s important to know these insurance terms even though some brokers will tell you and some just assume you know. Looking for an insurance quote send East Harlem Insurance Brokerage an email.