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Category: Business Insurance

Veterinary Clinic Insurance: Essential Coverage for Common Risks

Posted on by Jon Blankenship

Running a veterinary clinic or animal hospital comes with numerous rewards – it’s a unique opportunity to provide care for animals and support pet owners. However, like any business, veterinary practices face various risks that can significantly impact their operations if not properly managed. From liability concerns to employee safety, understanding and mitigating these risks with veterinary clinic insurance is crucial not only for the welfare of the business but also for client trust and overall success.

Why the Right Veterinary Clinic Insurance Matters

Veterinary clinics deal with unique operational challenges that involve animals, advanced medical equipment, medications, and sensitive data. Managing these complexities leaves practices exposed to specific risks that cannot always be anticipated or avoided. Without adequate veterinary liability insurance, the financial repercussions of accidents, lawsuits, or unforeseen events could jeopardize the entire business. Below, we break down the most critical risks veterinary professionals need to address through proactive measures and the right insurance policies.

Liability for Pet Injuries

Even under the best care, accidents can happen. A pet may injure itself while at your facility, escape and get hurt, or have an adverse reaction to treatment. Such incidents can lead to claims of negligence, emotional distress lawsuits from owners, and costly legal battles.

How to Mitigate This Risk

  • Invest in General Liability Insurance: This policy helps protect your clinic in the event a pet gets injured due to negligence or accidents on your premises. It can also cover legal defense and settlement costs.
  • Implement Safety Protocols: This includes securing all animals appropriately during treatment, ensuring cages are locked, and creating clear processes for handling high-risk animals.
  • Employee Training: Ensure all staff are well-trained in animal handling and emergency response procedures.

Property Damage

Veterinary practices house expensive equipment, valuable medical supplies, and sensitive technology. Damage from fires, floods, or even vandalism can be devastating, leading to significant losses and costly downtime.

How to Mitigate This Risk

  • Secure Property Insurance: Comprehensive coverage for your building, equipment, and inventory is critical. Property insurance can help repair or replace damaged items while covering the cost of business interruption.
  • Upgrade Security Measures: Install surveillance cameras, alarm systems, and secure entryways to deter vandalism or theft.
  • Prepare for Natural Disasters: Conduct risk assessments for weather-related hazards in your region and invest in measures like flood barriers or fire-resistant storage.

Employee Safety Risks

Veterinary staff often work in a physically demanding and high-pressure environment, which increases their risk of workplace injuries. They may be bitten or scratched by animals, exposed to dangerous substances, or suffer repetitive strain injuries from heavy lifting or frequent bending.

How to Mitigate This Risk

  • Workers’ Compensation Insurance: This essential policy covers medical expenses, lost wages, and rehabilitation for injured employees.
  • Provide Personal Protective Equipment (PPE): Gloves, masks, and goggles can reduce exposure to hazardous chemicals and physical injuries.
  • Ergonomic Training: Introduce proper techniques for lifting animals and other heavy items. Invest in equipment like hydraulic exam tables to minimize strain.

Data Breaches and Cybersecurity Risks

Veterinary clinics increasingly rely on technology for client management, billing, and medical record-keeping. Unfortunately, this makes them a target for cybercriminals, who may exploit vulnerabilities in your systems to steal sensitive client data or jeopardize operations through ransomware attacks.

How to Mitigate This Risk

  • Cyber Liability Insurance: This type of policy protects against losses caused by data breaches, including legal fees, notification costs, and fines.
  • Strengthen Cybersecurity: Use firewalls, antivirus software, and multi-factor authentication. Regularly update your systems to address potential weaknesses.
  • Employee Awareness: Conduct regular training sessions to help staff recognize phishing attempts or suspicious activity.

Controlled Substance Regulations and Risks

Veterinary practices often manage controlled substances like painkillers or sedatives to treat animals. Improper storage, theft, or employee misuse of these drugs can lead to legal complications and harm to reputation.

How to Mitigate This Risk

  • Compliance Coverage: Certain insurance policies can address liabilities related to regulatory claims or investigations.
  • Strict Inventory Management: Track all controlled substances meticulously. Use secure, locked storage and deploy inventory software to monitor use and loss.
  • Develop Legal Expertise: Partner with a consultant or attorney to ensure your practice adheres to controlled substance regulations.

Client-Related Risks

Disputes with pet owners can arise for various reasons, such as miscommunications about treatment costs, dissatisfaction with outcomes, or perceptions of negligence. These disputes may escalate to lawsuits or damage your reputation.

How to Mitigate This Risk

  • Professional Liability Insurance (Malpractice Insurance): This protects against claims of negligence or errors made during treatment decisions.
  • Clear Communication: Always provide detailed explanations of procedures and costs upfront. Have clients sign consent forms before undertaking significant treatments.
  • Customer Relationship Management: Train staff to handle emotional clients professionally and empathetically, diffusing tension before conflicts arise.

Key Steps to Take Today

If you run a veterinary practice or animal hospital, take the following steps to ensure you’re protected against these risks:

  1. Conduct a Risk Assessment: Identify specific vulnerabilities in your operations and address them proactively.
  2. Work with an Insurance Specialist: Partner with an agent or broker who understands veterinary practices. They can help tailor a comprehensive policy to suit your clinic’s needs.
  3. Review Policies Annually: Your risks may change over time, so make it a habit to revisit your insurance policies and adjust as needed.

We Can Help

Our team understands the risks for veterinary clinics and animal hospitals, and we can help you understand your options for coverage. Contact Brandon Patterson on our team at brandon@ownbyinsurance.com to get started!

Risks to Ponder When Considering Insurance for Alarm Installers

Posted on by Jon Blankenship

Alarm installers, whether operating in residential or commercial markets, play a vital role in ensuring safety and security. However, the work they perform and the services they provide expose them to a wide range of risks. Without proper insurance for alarm installers, these risks can have significant financial and legal implications, potentially jeopardizing the long-term success of their business.

To safeguard their operations, alarm installers must understand the specific hazards associated with their profession and the coverage options available to mitigate them. Below, we explore critical risks to consider and why tailored coverage is a must for alarm installation professionals.

Common Risks Faced by Alarm Installers

Alarm installation professionals are exposed to numerous risks during day-to-day operations. These include both external exposures and potential liabilities arising from their own business activities. Here are the key challenges they face:

Liability Claims

Mistakes in installation or failure of installed systems can expose alarm installers to claims of negligence. For example, if an alarm system fails during a break-in due to improper installation, the client may hold the installer accountable. General liability insurance can help cover legal fees, settlements, and damages arising from such claims.

Property Damage

Whether on a customer’s premises or off-site, damage to property is a plausible risk. Accidentally damaging walls, electrical systems, or valuables while installing equipment can leave installers liable for the cost of repairs. Investing in property coverage protects against these incidents.

Employee Theft

While rare, cases of employees stealing from client premises can harm the installer’s reputation and finances. Third-party crime coverage specifically addresses this risk, protecting businesses from losses resulting from employee theft of client property.

Bodily Injury

Accidents can occur during installations, leading to injuries among employees or clients. An installer may drop heavy equipment causing harm, or a client may trip over tools on-site. Workers’ compensation insurance can cover employees, while general liability insurance addresses third-party bodily injury claims.

Cyber Liability

With alarm systems increasingly connected to online platforms, exposure to cyber threats is higher than ever. Hackers may target alarm systems to gain unauthorized access or disrupt operations. Cyber liability coverage can mitigate risks related to data breaches or cyberattacks, covering costs like regulatory fines, legal fees, and data recovery.

Commercial Auto

Alarm installation businesses often rely on vehicles to transport tools and equipment, making them vulnerable to auto-related incidents. Commercial auto insurance covers accidents, theft, and damage involving company vehicles, ensuring that transport-based operations remain uninterrupted.

Inland Marine

Protecting tools and equipment during transportation is critical for alarm installers. Inland marine insurance acts as a “floater” policy, covering items in transit or stored at off-site locations. This ensures that critical equipment is protected, whether being moved between job sites or stored temporarily.

Tailoring Alarm Installer Insurance for Residential and Commercial Installers

The risks and associated coverage needs may differ slightly between residential and commercial alarm installers.

  • Residential Installers face unique risks related to customer interaction within private homes, such as accidental property damage or liability claims arising from defective home installations.
  • Commercial Installers, on the other hand, may encounter larger-scale risks working in commercial properties, including advanced cybersecurity challenges or employee theft involving high-value assets.

It’s vital for alarm installers to consult with specialized insurance providers to tailor a plan that comprehensively addresses their specific needs.

Recommended Insurance Coverage for Alarm Installers

To manage these risks effectively, alarm installation businesses should consider the following insurance options:

  • General Liability Insurance to address claims of negligence, bodily injury, or property damage.
  • Property Insurance to protect business-owned tools, equipment, and inventory.
  • Third-Party Crime Coverage to safeguard against client property theft by employees.
  • Cyber Liability Insurance for protection against data breaches and other cyber threats.
  • Workers’ Compensation Insurance to cover employees in the event of workplace injuries.
  • Commercial Auto Insurance to ensure the safety and reliability of business vehicles.
  • Inland Marine Insurance to cover tools and equipment during transit or storage off-site.

By investing in the right mix of coverage, alarm contractors can mitigate financial uncertainties and focus on delivering exceptional services to their clients.

Take Steps to Ensure Your Alarm Installer Insurance Coverage

Insurance is not just a safety net; it’s a fundamental part of running a resilient and professional alarm installation business. Understanding the array of risks inherent in the industry enables alarm contractors to proactively secure the right protection and safeguard their reputation and bottom line.

Are Cheaper Small Business Insurance Policies Leaving You Exposed?

Posted on by Jon Blankenship

The economy has some uncertainty that is leaving many feeling like they need to reconsider their business expenses.

Cutting costs might seem like the smart thing to do, however, when it comes to small business insurance, opting for a cheaper policy can leave your business vulnerable to risks you might not even be aware of. Below, we’ll explore some common gaps in small business insurance and how these gaps could impact your operations, profitability, and long-term stability.

Insurance Gaps Happen

Insurance gaps often happen when small business owners try to minimize costs without fully evaluating the risks unique to their industry or operations. Policies that seem affordable on the surface may have lower coverage limits or exclude critical areas, putting your business at risk of financial and operational hardship if something goes wrong.

Common Coverage Gaps That Can Leave You Exposed

Cheaper policies often skimp on critical coverage or fail to address your business’s specific needs. Here’s where you could find yourself unprotected:

  1. Low Coverage Limits
    Your policy might cover claims, but the limits could be far too low for an actual incident. For example, a general liability policy might cover up to $100,000 in damages, but what happens if your liability in a lawsuit climbs to $500,000? Your business would be responsible for the difference, which could strain your cash flow or force you out of business.
  2. Cyber Liability Coverage Is Missing or Insufficient
    Cyberattacks are becoming increasingly common, even for smaller businesses. Phishing scams, data breaches, and ransomware attacks can result in costly damages, including legal fees, customer notifications, credit monitoring services, and lost revenue. If your policy doesn’t include robust cyber liability coverage, you’ll be left to handle these costs out of pocket.
  3. Workers’ Compensation That Doesn’t Properly Cover Employees
    Work comp insurance is often mandated by law, but cheaper policies might exclude certain workers or job functions. For instance, contractors, part-time employees, or seasonal staff are sometimes left uncovered, even though their roles involve on-the-job risks. Uncovered workers can lead to significant medical or legal costs after an injury.
  4. Specialized Equipment Isn’t Covered
    For businesses relying on specific tools or equipment (like commercial kitchen appliances, construction machinery, or IT hardware), property insurance might not cover these items due to their specialized nature. For example, if a key piece of equipment breaks down or is stolen, downtime from the loss could cripple your operations if it’s not covered under your current policy.

The Hidden Costs of Gaps in Your Coverage

While cheaper policies might save money upfront, the “hidden costs” of insufficient coverage can pose substantial risks down the line:

  • Unplanned legal or repair expenses
  • Business interruption and downtime
  • Long-term hits to your reputation and customer trust
  • Potential non-compliance with local or industry regulations

How to Get the Coverage You Truly Need

Avoiding coverage gaps boils down to careful planning and working with the right insurance provider. Here are some steps to ensure you’re covered:

  • Perform a Risk Assessment: Identify all potential risks your business faces, from property damage to cyber threats.
  • Customize Your Policy: A one-size-fits-all policy might not include the protection you need. Consider endorsements or add-ons to tailor coverage for your needs.
  • Regularly Review Policies: Your business will evolve, and so will your insurance needs. Conduct an annual review of your policies to ensure they align with your current risks.
  • Partner with Experts: Work with an insurance provider who understands your industry and can guide you toward comprehensive coverage.

Protect Your Business Without Compromise

Don’t sacrifice security for short-term savings. Investing in the right insurance policy isn’t just about peace of mind; it’s about ensuring your business can weather challenges and stay competitive for years to come.

Reach out to Brandon Patterson on our team at brandon@ownbyinsurance.com to discuss options for your coverage needs and how you can avoid gaps that leave you vulnerable.

Business Interruptions and the Role of Insurance

Posted on by Ownby Insurance Service

For business owners and operators of all sizes, unforeseen interruptions to daily operations can have a significant financial and operational impact. One such scenario is a major utility issue – like a prolonged power outage – that grinds your business to a halt. Instances like these highlight why understanding and investing in comprehensive insurance coverage, such as Business Interruption Insurance, is crucial.

Let’s explore what business “interruption” means and how insurance may be able to help safeguard your revenue and operations in these instances.

What Is a Business Interruption?

A business interruption refers to any unforeseen event or issue that halts or restricts a business’s ability to operate. These interruptions can arise from external factors like property damage, natural disasters, or utility failures, such as a severe storm knocking out power for extended periods.

Such interruptions can create ripple effects – from lost customers to missed revenue opportunities – making long-term recovery more challenging. A well-prepared business owner can mitigate these risks with the right strategy, including insurance solutions tailored to address these scenarios.

Why a Major Utility Outage Could Be Devastating

Among various interruptions, major utility issues – like losing power or water due to connection failure or equipment malfunction – pose significant challenges. Think about the consequences if you’re relying on refrigeration in a restaurant, powering key electronics, manufacturing with powered equipment, or welcoming in customers for retail. Beyond operational inefficiencies, additional costs pile up quickly, including replacement of spoiled resources, uncompleted orders, missed revenue, and extra expenses to resume operations.

Without a financial safety net to handle these situations, businesses risk losing momentum or even shutting down permanently.

Business Interruption Insurance Impacts

Business Interruption coverage, often called Business Income Insurance, may act as your lifeline during such disruptions. If a covered event forces your business to cease operations temporarily, this insurance helps replace lost income and cover essential costs, ensuring your operations stay afloat.

What Does It Typically Cover?

Here are the key areas this insurance focuses on, which can be critical for managing interruptions like utility outages effectively:

  • Revenue Replacement: Compensates for income lost during the downtime.
  • Loan or Lease Payments: Covers rent or loan obligations so you’re not falling behind on payments while operations are paused.
  • Taxes: Helps ensure you can continue paying business taxes even if your business isn’t active.
  • Payroll: Keeps your employees paid during the disruption to ensure your team is ready to be in place when operations resume.
  • Extra Expenses: Covers costs such as renting a generator or relocating temporarily to keep parts of your services running.

Example in Action

Imagine a bakery that relies heavily on refrigeration for its operations. If a power outage caused by a storm results in spoiled inventory and forced closures, business interruption insurance could cover the lost revenue, employee wages, and even extra expenses, like the immediate need to rent cold storage or a temporary workspace.

Understanding the Limits and Exclusions

While this coverage is versatile, it’s important to understand its scope to maximize its benefits. To ensure your expectations align with policy terms, keep the following in mind:

  • Business Interruption Insurance does not cover flood or earthquake damage unless specified in a separate policy.
  • Business Interruption Insurance does not cover communicable diseases unless specified directly in policy language.
  • Utilities themselves (e.g., electricity bills or water supply) are excluded.
  • Coverage is dependent on documented losses, which underscores the importance of maintaining accurate business records.

Review your policy for specific waiting and restoration periods. Typically, benefits apply after a 48- to 72-hour waiting period and last up to a year.

How to Choose the Right Coverage

When tailoring your business interruption insurance, ask yourself questions like these to determine the appropriate coverage level for your business needs:

  • How long would it take to recover from a disaster? Think about cleanup, repairs, or reinstating services.
  • What’s my worst-case scenario? Identify the large-scale events that could pose risks—whether they are utility-related or natural disasters in your region.
  • What are my essential operating expenses? Lease payments, wages, and loan requirements should all be factored in when determining coverage amounts.

You might also consider bundling interruption insurance with your liability and property insurance for broader coverage.

Is Your Business Protected?

Small businesses are the backbone of any economy, and interruptions shouldn’t spell the end of your hard work. With the right preparation and sufficient business interruption insurance, you can withstand disruptions, minimize financial loss, and continue thriving.

Need help with a plan for protecting your business? Please contact Brandon Patterson on our team at brandon@ownbyinsurance.com.

How Claims Impact Your Insurance Premiums

Posted on by Ownby Insurance Service

Your insurance premium is based on many factors, from the type of coverage you choose to your overall risk profile. But one aspect that often surprises policyholders is the impact of claims on their premiums. Whether you’ve recently filed a claim or you’re thinking about it, it’s important to understand how claims can influence the cost of your coverage.

Loss History: A Snapshot of Your Risk

Your loss history, or claims history, is a critical factor insurers use to determine your premium. This is essentially a record of all the claims you’ve filed in the past. Insurers view this as a representation of your risk level – policyholders who have filed multiple claims are generally seen as more likely to file additional claims in the future.

Each insurer has its own thresholds for how claims history impacts your premiums, but generally, past claims can lead to higher premiums.

Why Does Your Loss History Matter Impact Your Insurance Premiums?

Your loss history paints a picture for your insurer. For example:

  • If you’ve experienced multiple incidents, it could indicate a higher likelihood of future claims.
  • A long history of claims, even if they’re for relatively small amounts, can label you as a higher-risk policyholder.

While you can’t change your past claims, being aware of how your loss history is assessed can influence your approach to future claims.

Claim Frequency and Size Matter

Number of Claims

In insurance, the old saying “the fewer, the better” rings true. Filing multiple claims within a short time – even for small amounts – can signal a higher risk level to your insurer. Insurers often see frequent claims as an indicator of risk-prone behavior, even if the claims themselves are low-cost.

To manage your premium effectively:

  • Avoid filing claims for minor damages that fall close to or just above your deductible.
  • Consider whether the cost of repairing or replacing an item out-of-pocket is more affordable in the long run.

Claim Size

The size of the claim matters just as much as the number. Large claims require significant payouts from the insurer. When an insurer has to pay a big settlement for a loss, the chances are your premium will move upward to reflect the cost.

For instance, a single high-value claim – such as a major accident or property damage – might have a bigger impact on premiums than several smaller claims.

The Impact of Your Deductible Choice

Your insurance deductible – the amount you agree to pay out-of-pocket before your insurance kicks in – also plays a major role in claims and premiums. Filing claims for damages that barely exceed your deductible can lead to higher premiums in the future, meaning you’re left paying more overall.

The Value of a Claims-Free Credit

Insurance providers often reward policyholders who don’t file any claims over a certain period. This is commonly known as a claims-free discount or credit. Maintaining a claims-free record demonstrates a lower risk level, which insurers may reward with a reduced premium or special discounts.

Filing a claim could result in the loss of this credit, which can significantly increase your premiums in the long term. Depending on your provider, the impact of losing a claims-free credit can sometimes outweigh the benefit of filing a minor claim.

“Then Why Do I Even Have Insurance?”

All this doesn’t mean you should avoid filing claims entirely. Insurance exists to protect you in situations where the losses are too great to bear out-of-pocket. However, carefully evaluating the situation and considering the long-term implications can help you balance coverage with premium stability.

Smart Tips to Manage Insurance Claims and Premiums:

  1. Review Your Policy Carefully
    Understand your deductible amount, what types of incidents are covered, and how claims may impact things like claims-free discounts.
  2. Weigh Filing a Claim Against Out-of-Pocket Costs
    If the repair or replacement cost is close to your deductible, it may save you money long-term to pay out-of-pocket rather than file a claim.
  3. Keep Your Loss History in Mind
    Evaluate how additional claims could impact your overall risk profile and premiums.
  4. Focus on Preventative Measures
    Take steps to avoid future incidents, such as securing your home, maintaining your property, or installing safety features. Proactively reducing risks can help keep your premiums manageable over time.
  5. Bundle Your Insurance Policies
    Many insurers offer discounts for bundling, which can offset increased premiums due to claims.
  6. Ask About Claims Forgiveness
    Some insurers offer “claims forgiveness” features, where your first claim won’t impact your premium. Consider whether this add-on is available and worth adding to your policy.

When to File

Ultimately, balancing the cost of a claim versus the long-term implications for your premium is key. By thinking strategically and being proactive, you can ensure your insurance remains both effective and affordable. If you’re unsure, discuss the deductibles and potential impacts of filing the claim with our team and we’ll help you understand your options – but we won’t make the choice for you. That’s your decision!

How Does Safety and Risk Management Impact Your Business’s Insurance?

Posted on by Ownby Insurance Service

As a business owner or manager, you have enough to worry about without safety incidents impacting your team and what you do. That’s why it is so important to have proper safety procedures and risk management efforts in place – and to train your team on those policies. And while it may be common sense that better safety could lead to improvements for your business’s insurance, there may be more impacts than you realize. Here are some of the important impacts to consider as you develop your strategy.

Risk Management: Reduce Exposure

One of the most immediate benefits of implementing rigorous safety and risk management procedures is the reduction of loss potential. When businesses invest in training their team and ensuring that safety measures are consistently applied, they create a safer work environment. This proactive approach minimizes accidents and incidents, typically reducing the number of business insurance claims. Not to mention, fewer incidents means your team’s efficiency and effectiveness should increase, improving your bottom line.

Improved Employee Satisfaction

Employee satisfaction is another critical impact of robust safety and risk management protocols. Workers who feel safe and valued are more likely to be engaged and productive. High levels of employee satisfaction can lead to lower turnover rates, fewer absences, and a more positive workplace culture. Happy employees are also less likely to file complaints or claims, further reducing insurance costs.

Lower Insurance Premiums

Insurance companies review loss history, analyze risk factors, and – in some cases – review a business’s risk management procedures to determine premiums. Insurance companies view businesses with comprehensive safety and risk management plans as lower-risk, resulting in more favorable rates for their coverage. By demonstrating a commitment to safety, businesses can often negotiate better terms with insurers, thus reducing overall operating costs.

Industry Example: Manufacturing

The manufacturing sector provides a compelling example of how effective safety and risk management can lead to lower insurance costs. Manufacturing companies with clear, written, and team-reviewed safety procedures can significantly reduce the risk of injury and illness.

In fact, the Occupational Safety and Health Administration (OSHA) reports that safety efforts in the industry have led to a significant drop in worker injuries and illnesses—from 10.9 incidents per 100 workers in 1972 to 2.7 per 100 in 2022.1 This dramatic reduction not only lowers the human cost but also translates into substantial savings on insurance premiums.

Spend the Time – See the Results

Investing time, effort, and resources into safety and risk management is not just a regulatory or a compliance issue – it can be a strategic business decision if done correctly. By reducing loss potential, enhancing employee satisfaction, and lowering insurance costs, businesses can create a safer and more financially stable environment.

For small business owners, risk managers, and business managers, the path to lower insurance premiums and a safer workplace lies in proactive safety and risk management. How can you get started on a safety and risk management plan for your business? Check out the tools available from Liberty Mutual’s SafetyNet program at https://business.libertymutual.com/services/risk-control/liberty-mutual-safetynet/

If your business wants to discuss how the safety measures you already have or are implementing can help with your insurance, contact Brandon Patterson on our team at brandon@ownbyinsurance.com to get the support you need today!

1-per https://www.osha.gov/data/commonstats

Why Do Natural Disasters Elsewhere Impact Insurance Rates Locally?

Posted on by Ownby Insurance Service

A hurricane in Florida. A flood in New York. A wildfire in Colorado. What do any of these have to do with Tennessee’s insurance rates? It would be easy to say, “Oh, that’s just the insurance companies charging us for money they had to pay for other claims.” However, it goes much deeper than that, so let’s discuss why losses elsewhere impact premiums here.

To start with what you probably did know – yes – there is an impact in premiums when companies lose money elsewhere. But it’s not as simple as “greed” for insurance companies. The way these companies make a profit is measured through a “combined ratio” – a metric that calculates their loss ratio and expense ratio. In other words, the amount they’ve paid out for losses is added to their business expenses and divided by the amount of premium they’ve “earned” from insureds. A combined ratio over 100 means that the company – in the most basic sense – is losing money.

Companies that continually lose money typically cease to operate after some time. That is one reason why there is an impact on your insurance rates based on losses in other parts of the country, but it’s far from the only reason. Here are three more:

Actuarial Predictions

Companies rely on actuarial science – the discipline that applies mathematical and statistical methods to the systematic observation of natural events to assess the risk of events occurring and help formulate policies that minimize this risk and its financial impact on companies and clients – to measure future risk. When there are more disasters, these measurements increase future predictions of risk, in turn resulting in filings for higher rates.

Claims Costs

When there are significant natural disasters, especially multiple disasters across the country, there is a major impact on the supply chain. The cost of materials and labor can increase significantly, as can the time for mitigation and repairs. This all adds up to higher claims costs, which in turn lead to a need for higher rates.

Reinsurance Costs

Insurance companies buy policies of their own – called reinsurance – to share the risks they insure. As claims and costs go up globally, the price of reinsurance goes up as well.

You might ask why these companies don’t just focus on areas of less risk – but it’s not that simple. A practice called “spread of risk” lessens the concerns of one major natural disaster impacting all or most of a company’s insureds. And there is risk everywhere. We may not be impacted by a hurricane, but a hailstorm, tornado, or wildfire is certainly possible.

All these factors go into ratemaking decisions for insurance companies. As we progress through hurricane season and other natural disasters occur, just keep in mind that the impacts from these events are not always immediate and not restricted to where they are happening.

If you’d like to know more, contact Brandon Patterson on our team at brandon@ownbyinsurance.com.

What Do Charities and Nonprofits Need to Know About Their Insurance?

Posted on by Ownby Insurance Service

We are lucky to have many charities and nonprofit organizations that serve a vital role in our communities. The services and resources they provide can be a lifeline of support for thousands of people. But even organizations with the best intentions, missions, and goals have risks to consider.

As you’d imagine, liability, workers’ comp, property, and commercial auto policies are often needed for most of these organizations. But what about other risks? Here are a few that nonprofits and charities should take into consideration:

Directors & Officers

Your organization likely has a group of volunteer leaders that help support the decisions and guide you in fulfilling your mission. However, they may be held responsible for some of those decisions if they have negative results. Directors & Officers (D&O) coverage may help with defense costs, settlements and judgments associated with claims against nonprofit organizations. It may also help protect their personal assets should legal matters implicate them.

Cyber Liability

Many organizations maintain sensitive data about those they serve. This may include medical information, personal details, addresses, and more. Having cybersecurity measures in place to protect this data is critical. But just as critical is having the right cyber liability policy in place. A data breach can cost thousands of dollars, even for a small organization. To help you respond and recover, consider a standalone cyber policy that provides the right coverage for your specific risks.

Vulnerable Groups Served

If your nonprofit or charity assists with support for children, the elderly, or mentally challenged individuals, it is an unfortunate reality that there is some risk for abuse. There are professional liability coverages that may help protect your organization if allegations of abuse occur.

Some may be specific to the type of charity work you perform, and it is best to consult with your agent on what is best suited for your risks. This may assist employees in the case of false allegations as well, even potentially providing defense funds and lost wages.

Additional Coverage Considerations

In some cases, insurers may offer specific coverages or umbrella policies that are more custom to the risks a charity or nonprofit is facing. Such coverages may help better protect your organization, your leadership, and the communities you serve.

Having an insurance agent who understands the risks of your charity or nonprofit is extremely important. The services you provide are often critical for the people who receive them. Not having the right insurance may leave the work you with vulnerabilities you never considered.

Brandon Patterson from our team would be more than happy to discuss these items with your organization and help you identify risks and coverages. Please contact him for more info at brandon@ownbyinsurance.com.

How Much Insurance Does Your Business Need?

Posted on by Ownby Insurance Service

Owning a business is a lot of work. It often involves managing people, making decisions, keeping track of many things at once, marketing, selling, and a slew of other tasks. When it comes to insurance, most business owners don’t have the time or resources to seek out what they need on their own. They rely on an agent to help them assess their risks and review their policy options. But even with an agent involved, it is best to understand your coverages and what insurance you may not have as well. So, how “much” do you need? Let’s review a few of the ways to find out.

Do You Sell Product(s) or Services?

Whether you offer products or services significantly affects your insurance needs. If you sell products, you may need product liability insurance to protect against claims related to product defects or injuries caused by your products. On the other hand, if you provide services, professional liability insurance (also known as errors and omissions insurance) can cover claims related to professional mistakes or negligence.

Do You Own or Lease Property for Business?

If you own or lease property for your business, you need to consider commercial property insurance. This type of insurance covers damages to your building, equipment, inventory, and other physical assets due to incidents like fire, theft, or vandalism. For those leasing property, make sure to check the terms of your lease to understand your insurance responsibilities.

Do You Have Employees?

Having employees introduces additional risks and responsibilities. You’ll need workers’ compensation insurance to cover medical expenses and lost wages for employees who get injured on the job. Additionally, employment practices liability insurance can protect against claims related to employee rights violations, such as wrongful termination or discrimination.

Do You Have Vehicles You Use for Business?

If your business uses vehicles for operations, commercial auto insurance is essential. This insurance covers damages and liability in case of accidents involving your business vehicles. Make sure to include coverage for all vehicles used for business purposes, whether they are owned, leased, or rented.

Do You Store Client/Customer Data?

In today’s digital age, data breaches and cyberattacks are significant threats to businesses. If you store client or customer data, consider investing in cyber liability insurance. This insurance helps cover costs associated with data breaches, including legal fees, notification expenses, and credit monitoring for affected individuals.

Additional Coverages

Apart from the key considerations mentioned above, there are other types of insurance you may need based on your specific business needs:

  • General Liability Insurance: Covers a wide range of risks, including bodily injury, property damage, and advertising injury. This coverage is often included in the base policy for your business, such as in a Business Owners’s Policy (BOP).
  • Business Interruption Insurance: Compensates for lost income if your business operations are halted due to a covered event, such as a natural disaster.
  • Directors and Officers (D&O) Insurance: Protects your company’s leadership against personal losses resulting from legal actions taken against them due to their corporate decisions.

What About the Dollar Amount?

Are recent Blog on Total Insurable/Insured Value (TIV) may be able to help you calculate the amount you should have for the total insured limits on your policy. There are many factors involved here, and we’d encourage you to read more about it!

Even with all the above in mind, there may be risks that are very specific to the work you do. It is best to discuss your business with a licensed agent to really determine what you may need. Contact Brandon Patterson on our team if you’d like to discuss your business’s insurance!

Why Total Insurable Value (TIV) is Important to Understand

Posted on by Ownby Insurance Service

Total Insurable Value (TIV) [sometimes called Total Insured Value] is the complete value of property, inventory, equipment, and business income covered by a company’s insurance policy(ies). Should one insurance company be the insuring carrier for all these policies, it is the maximum amount that they would pay out if there were a covered actual total loss. In other words, if your insured property was damaged or destroyed to the point it could not be restored or recovered.

Seems pretty straightforward, right? Yes, but as an insured, it is critical for you to understand the proper calculation of your TIV. Leaving out key pieces of equipment or inventory might result in an important difference in the amount you for which you are covered.

In most insurance policies, there is a Valuation Clause that will contain a formula for your TIV. You may need to review tax records, purchase orders, sales records, and other financials to properly calculate the amount. In the case of business income, a 12-month window is typical to determine revenue generated for insurance purposes.

As you might expect, a higher TIV comes with a higher insurance premium. Some business owners decide on a lower TIV amount or a higher deductible to offset costs. But there are concerns with both these approaches.

Choosing a Lower TIV

Opting for a lower than actual TIV may save you on the front end, but should you have a total loss, consider what you may be faced with:

  • Is your property completely paid off? If not, what might you owe?
  • Will you have bills for inventory, taxes, or other outstanding debts that still need to be paid?
  • Is there compensation for yourself, your family, and/or your team that will still be needed?
  • Will you want capital to restart this or another business?

Those items can add up quickly. Saving several hundred dollars per year could cost you thousands in this scenario.

Choosing a Higher Deductible

Similarly, costs might be high and money might be tight if you have a total loss that puts a stop to your revenue. A higher deductible might save you a small amount per year, and those savings may take many years to equal what you would forfeit should a total loss claim occur.

In addition, some policies contain co-insurance provisions for claims. This means that in addition, to your deductible, you are responsible for a certain amount of the TIV. Talk with your agency to better understand how co-insurance may factor into a potential claim, as it may give you a better perspective on how much money you might actually receive for a total loss.

When making your decision on TIV, start with the most accurate calculation possible. Then determine the amount of risk you want to take compared the amount you want to place on your insurance policies. This can give you a better perspective on the value of your coverage.

Reach out to Brandon Patterson on our team to discuss your TIV and better understand how you can be covered if the worst were to occur.