Archives for June 2018
RISK SERVICES – Risk Management is identifying the levels of exposure and danger a company faces in its operations and assets and then determining the best ways to offset them.
The best response to risk does not always include buying insurance. Some potential losses can be controlled, transferred, reduced or eliminated.
If you do need to insure, there are different types of coverages available. These include fully-insured, risk retention or deductible plans, and true self-insurance.
How do you know which one to choose? YOU don’t have to. That’s the job of your on-staff or consultant Risk Manager.
“But my insurance agent handles my Risk Management,” you might say. And they may do just that.
But they’re also getting a commission off your premiums.
Would they suggest you have a Cost Benefit Survey to make sure you’re getting the lowest possible price?
We would. That’s what we do.
And if you have different agents for your Property Insurance and your Casualty Insurance (and most mid-sized to larger companies do), are you sure there aren’t any gaps or overlaps in coverages?
We can do that for you. That’s what we do.
We get YOU the best insurance coverages at the best possible prices to fit YOUR needs. We act as YOUR advocate and advisor.
WHY? Because we like helping people. And we’ve made a business out of it.
RISK: That’s what we do.
Company Founder Adds Remarks
Walter Haney, Sr., is serious about helping companies with their Risk Management needs. He describes his processes, his objectives and his company’s mission in the following statement:
“First of all, with any potential client or new client, we review all of their existing insurance coverages and Risk Management Programs—dealing with safety, dealing with limits, dealing with the whole thing.
“In doing this, we are looking for gaps or overlaps. Gaps are areas with no coverage. And a no-coverage claim could put you out of business. Overlaps are simply insurance that you’re paying twice for and can’t use but one time.
“Then, after we do this, we visit with the potential client and tell him what we’ve found. And if we’re employed, we will at that time, design an insurance program to correct all of the errors and omissions that are present.
“We will help him secure the insurance through a competitive bid process. We will help him manage the insurance once he secures it. And from that time on, if they desire, we will manage and operate their insurance program.
“We will secure personnel to design safety programs to complete the whole Risk Management Support System that companies need today.
“Companies are now faced with legal exposures that they’ve never been faced with before. There are lawyers operating out there with ads telling people what to sue for. And there doesn’t have to be anything of a real nature involved to start a lawsuit.
“But, basically, what we do, if you think you want to hire us, we’ll come and take a look at what you have. And check it for the adequate coverage that you need.
And if you hire us, we’ll design an insurance program for you. And we’ll design a Risk Management Program for you that will serve your company as well as any Fortune 500 Company’s program.
“We are designed to support—our whole mission is to support—a company that is not quite big enough for a full-time Risk Management Department.
“The need is there, but from a financial standpoint, they really don’t feel like they can support a whole department. And we furnish that.
“We’ve very much like a CPA firm being used as a Financial Officer. We hire CPAs to do that for us; to make financial projections, to deal with our taxes. And that’s because companies don’t know how to handle those issues. And they hire lawyers because they don’t know the court system.
“These companies are usually equally unaware about insurance. Most companies don’t know what to do with their insurance programs. And that’s the reason ‘they give it to somebody.’ They give the insurance program to their friend or to ‘so and so.’
“And these companies have never competitively bid their insurance programs. They’re told by these agents that they’ll check 50 companies for the best prices.
“Well, that’s not good enough. You need a competitive bid situation and you need more than one vendor competing for your business.”
Contact Us Today to See What WE Can Do For YOU!
RISK EDUCATION – If a natural disaster or other catastrophe, such as a fire or a robbery, should temporarily close your business down, you could be facing another disaster—the permanent closing of your company—if you don’t have your stream of income insured.
Business Income Insurance (or Business Interruption Insurance) is a vital protection and should always be included in your commercial coverages.
You’re insuring the most valuable asset your company possesses—your stream of income.
Income acts as the lifeblood of your company. Protecting this lifeblood can determine whether you live or die as a company.
A Misunderstood Coverage
Most businesses either think they don’t need Business Income Insurance or they just don’t think about it at all.
This type of coverage is also frequently misunderstood.
Companies will insure their properties, equipment and machinery, but may not think about insuring their income.
And some agents won’t bring up Business Interruption Coverage, unless it’s built right into their usual forms.
What you are basically insuring is the loss of income from the beginning of the claim period until your business can be fully restored and earning an income that equals the pre-event amount.
Coverage Should Be Carefully Catered
Just like other types of insurance, Business Income Coverages include conditions, limitations and exclusions.
All these considerations are just as important as having the coverage at all and will ultimately determine what is paid, how it’s paid and when it’s paid.
Coverages are available to expedite recovery and help with extra expenses. Some income loss payments could even be made in advance—IF this is written into YOUR policy.
Your loss of income protection should be catered carefully to your exact business needs.
All types of scenarios should be considered to make sure you are adequately protected.
Ask yourself, “What if?”
Would you be covered if a catastrophe hit your area, but your own facility was undamaged?
If all the surrounding roads are impassable:
- Your fleet can’t deliver;
- Your suppliers can’t deliver, either;
- Your employees won’t be able to travel to and from work; and
- If you are retail, your customers can’t get in and out.
Make sure your particular policy covers all these types of situations.
Get Professional Advice
When calculating exactly how much Business Income Insurance you need, it’s best to consult with a professional Risk Manager.
Offering unbiased advice, an Independent Risk Manager can help you determine exactly what types of coverage you need AND the correct amount you need.
Your Risk Manager will help you complete a detailed Business Income Worksheet for your company.
You can find worksheets online, but Risk Managers provide the expert knowledge needed to correctly estimate all the many variables.
- Net Annual Sales (after taking away the Cost of Goods Sold);
- Ordinary Payroll;
- Net Income and Expenses;
- Factors for Repairing & Replacing Items;
- Extra Expenses; and
- Many, Many More.
You will also need some funds for future finances—savings you’ll need to go back into business.
Plus revenue to pay salaries and continue employee benefits.
Not A Cookie-Cutter Approach
Deciding how much income you need to recover can’t be determined with a cookie-cutter approach.
There are no easy percentages to follow, because there is no specific number you can base a percentage on.
Each business is unique.
Each company will have a different amount that is needed to get them back into business as quickly as possible.
Only YOU will know how much money you will need.
Smaller businesses may be able to get back on their feet in a shorter period of time.
Larger companies, with huge manufacturing facilities, may take a lot longer to build back.
It all depends on what you make, how big you are, where you are located, what type of equipment you have and EXACTLY what happened to shut you down.
It also depends on the number of employees you have, their salaries, their insurance and benefits…
Is it going to be weeks, months or years before you can get back up to speed?
How much money you need depends on A LOT.
Tip Of The Iceberg
There are a multitude of factors involved—this post only touches the tip of the iceberg that is Business Income Insurance.
Most importantly, we just want to get you thinking in that direction.
We want YOU to consult with someone who has YOUR best interests in mind.
A Risk Manager is going to ask you, “How much money do you need to operate without income?”
And then, they’re going to build everything else around that specific amount of protection.
Hopefully, you’ll never have to use this type of insurance.
But if you do, a Risk Manager will make sure you get the correct amount needed to save your company.
And they’ll also make sure you’re able to collect that amount…
Because—Business Income Insurance is not only difficult to determine—it’s an even more difficult claim to prove.
A Risk Manager will probably insist that the cost for Forensic Accounting be built into your policy.
With an outside firm doing the forensic work, a hard claim to settle will become a much easier claim to settle (and usually for more money.)
A Stronger Position
You put your heart and soul (and possibly your life’s wealth) into your company.
Maintaining a stream of income can make all the difference in your future success.
Business Income Insurance also helps keep your business alive in other areas.
You can sit down with your banker, your suppliers and your customers and say, “We’re not running now, but our stream of income is insured just like the company was still running.”
That’s a strong position to be in.
If there’s nothing coming in—no income at all—you may have to close the doors.
Or even worse—face your banker as they force you to close the doors.
Ask yourself now: IF something destroys your facilities and you want to be able to keep your company—but you have to build it back—all while keeping your employees and other expenses going—HOW much money do you need?
Your next step: Contact someone who can help you get THAT amount of coverage.