Avoid Business Insurance Purchasing Mistakes – Part II

Continued…..

Owning and operating a business takes a lot of time and energy: satisfying customers, attracting, finding, and retaining talented employees, marketing products and services. The list goes on and on, and on. One responsibility which may not receive the attention it should is ensuring your business has appropriate insurance coverage.

Here are some of the mistakes made by businesspeople when choosing insurance.

Failing to Read Your Policies

Your insurance policy does not make for exciting reading but knowing what is and is not included is crucial.  It is the only way to know what risks are covered and which are excluded. Looking at your policies after a loss occurs is not effective timing. You cannot buy coverage for a loss that has already taken place.

While many insurance policies are written in simplified language, they still contain some “legalese.” If you have trouble comprehending the wording, ask your trusted insurance advisor or attorney to explain the policy wording.

Buying Too Little Property Insurance

When insuring buildings and personal property under a commercial property policy, make sure to have adequate limits. This is essential even if your policy includes replacement cost coverage. While the replacement cost coverage will automatically cover the cost to repair or replace your damaged property, it will not pay more than the limit of insurance. If the cost to repair or replace your property exceeds the limit, your policy will only cover that portion of the loss within the policy limits.

Watch out for coinsurance clauses and agreed value provisions, which are often found in property policies. Both impose a penalty for underinsuring your property. If a loss occurs and you have failed to maintain a minimum amount of insurance, your insurer will not pay the full amount of the loss. Deliberately underinsuring your property is not a good way to save money on property premiums.

Failing to Insure Potential Income Losses

Many business owners are careful to insure their company’s physical assets but fail to consider a common consequence of physical losses, namely a loss of income. A company will lose income if its premises suffer a physical loss and the business cannot operate until the damage is repaired.

Business Income insurance is intended to help companies survive an interruption in operation by reimbursing the company for the income it would have earned if the loss had not occurred. It also covers continuing expenses like rent or electricity regardless of whether your business is operating.

Your business may also need Extra Expense insurance: which covers expenses you incur to avoid or minimize a shutdown when property has been damaged by a covered peril.

Failing to Accurately List Entities or Locations

Under most liability policies, only the people or entities shown in the declarations qualify as named insureds. People or entities not listed on the policy generally are not covered.  Failing to list a business entity on a general liability, commercial auto, umbrella, or other liability policy can have disastrous consequences.

For example, for tax reasons, you transfer ownership of all your business property to a newly created subsidiary. However, your liability policy only lists your company name as the named insured, not the new subsidiary. Were an accident to occur on the property and the subsidiary sued, your insurer can refuse to cover the claim as the subsidiary was not named on the policy.

Similar problems can occur if business locations are omitted from a commercial property policy. Most property policies cover physical loss or damage to covered property at the premises described in the declarations. If damaged property is situated at premises not shown on the policy, the damage may not be covered.

Sticking With the Same Insurer or Policy for Too Long

While a long-term relationship with an insurer can be an asset, avoid staying with an insurance company no longer meeting your needs. An insurer (or insurance policy) that was suitable for your business in the past may no longer provide adequate coverage.

Insurers do change over time. Some grow and expand their product offerings, some improve the quality of their service while others allow theirs to decline. You can determine whether your insurer is still competitive in the marketplace by asking your trusted insurance advisor to obtain quotes from other insurers.

The best advice is to meet with your trusted insurance advisor every few years for a full assessment of your risks and insurance needs to determine you have the most appropriate coverage for your current and future business needs.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance advisors and see how painless insurance shopping can be.

Avoid Business Insurance Purchasing Mistakes – Part I

Owning and operating a business takes a lot of time and energy: satisfying customers, attracting, finding, and retaining talented employees, marketing products and services. The list goes on and on, and on. One responsibility which may not receive the attention it should is ensuring your business has appropriate insurance coverage.

Here are some of the mistakes made by businesspeople when choosing insurance.

Buying on Price Alone

When shopping for any form of insurance, it makes sense to shop around. Some insurers provide better value than others, meaning the policy which costs the least will not be a bargain if you and your business are left vulnerable to costly claims.

Obtain quotes from multiple insurers and compare the proposals in detail, line by line of offered coverage. Be sure to consider the types of coverage and the coverage amounts listed in a quote. Here is where your trusted insurance advisor can help you by explaining what is covered and what your level of risk exposure might be.

Always know what exclusions and limits exist in any policy under consideration.

Buying Too Little Liability Insurance

Every small business can be hit with a lawsuit, costing anywhere from $3,000 up to $150,000 or higher. Legal actions can threaten your company’s financial stability and its reputation. One large claim could put your company out of business. Don’t skimp on coverage limits when buying general liability or auto liability insurance.

Many businesses will not employ you as a sub-contractor until you provide proof of liability insurance, with a minimum coverage amount specified in the contract. A landlord may refuse to lease property unless your business has purchased sufficient liability insurance. 

 Automatically Choosing a Low Deductible

A deductible can reduce the cost of insurance premiums as it enables the business owner to pay small losses out of pocket as a form of self-insurance.

Do not automatically select the lowest deductible when buying commercial property or auto physical damage insurance. Rather, consider how much premium you will save by raising the deductible. Generally, choose the largest deductible the business can comfortably absorb in the event of an accident.

Failure to Adjust Your Coverage as Your Business Changes

Most businesses change over time: small companies may grow adding locations and hiring additional employees. The mix of products or services offered may expand into new potential business areas. As businesses change, insurance needs change as well.

When making a major change to a business, such as acquiring a new company or location, notify your agent or insurer right away. Any other changes should also be reported before policies renew. Plan to talk with your trusted advisor annually to review business insurance coverage and limits to determine if your insurance needs have changed.

Your agent can help you decide whether your insurance coverages or limits should be adjusted.

Plan to meet with your trusted insurance advisor every few years for a full assessment of your risks and insurance needs to determine whether you have the most appropriate coverage for your current and future business needs.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance advisors and see how painless insurance shopping can be.

Microsoft Security Warning

Urgent Security Warning: Update Your PC Immediately

As a family-owned insurance agency, we believe it is our responsibility to help our clients reduce their risks. We assist with coverage for auto, home, business and offer services to our clients to periodically review their portfolios identifying areas where our clients may be at risk.

We extend that dedication to reducing risk beyond their insurance coverage feeling the need to alert clients and potential customers of risks for which we may not be able to provide coverage in their personal lives, including their online presence. Microsoft is urging all Windows users to immediately install an update after security researchers found a serious vulnerability in the operating system.

PrintNightmare Threat

The vulnerability, known as PrintNightmare, affects the Windows Print Spooler service. Researchers at cybersecurity company Sangfor accidentally published a how-to guide for exploiting it. The researchers tweeted in late May that they had found vulnerabilities in Print Spooler, which allows multiple users to access a printer.

The researchers published a proof-of-concept online by mistake and subsequently deleted it — but not before it was published elsewhere online, including developer site GitHub.

Microsoft warned that hackers could exploit this vulnerability installing programs, viewing, and deleting data or even creating new user accounts with full user rights. This could give hackers enough command and control of your PC to do some serious damage.

Affected Windows Programs

This vulnerability effects Windows 10 and Windows 7, however Microsoft ended support for Windows 7 last year.

Even so, Microsoft issued a patch for Windows 7, a 12-year-old operating system, which emphasizes the severity of the PrintNightmare flaw. Updates for Windows Server 2016, Windows 10, version 1607, and Windows Server 2012 are “expected soon”.

The good news is that the current security update contains fixes for previous security issues as well.

In the last year and a half, Microsoft encountered multiple security alerts. Last year they were alerted by the National Security Agency of issue with the operating system that allowed hackers pose as legitimate software companies. Earlier this year, it was discovered that Exchange (Microsoft’s email and calendar services) had multiple vulnerabilites that allowed hackers to access servers.

It is important to note that Microsoft has not released a patch for Windows 11, its newest operating system, which is currently available only to beta testers.

How To Update

It is strongly recommended computer users allow Windows to automatically download and update Windows. If you are not sure if your computer has adopted the patch, type “update” in the search bar on the bottom left side of the Windows home screen. This will bring up a screen with a message stating: “Check for updates”. Clicking on that message will instruct your computer to show available updates, with the option to download now (recommended) or later.

Given the well-publicized attacks of the last few weeks, we should all reduce our risk by installing this update as soon as possible.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.

Teen Drivers

Freedom of the Road

One of the great moments in a teenager’s life is receiving their driver’s license. For parents, it is a moment of pride in their son or daughter growing up. That pride is quickly overcome by fear, doubt, and uncertainty. What of their child’s safety? Will their teen be one of the many teen driver accident statistics? What will having a teen driver in the household do to my car insurance rates?

Parents primary concern is, of course, for the safety of their first-time driver and others sharing the road. With little prior driving experience, inexperienced drivers are at an elevated risk for accidents. Although safety certainly is a main concern, controlling cost and confirming sufficient coverage to protect against liability claims is also a major consideration. Even in the absence of any claims, many parents might also be concerned about the increased cost of auto insurance.  

Auto insurance, whether acquired through an insurance broker or insurance agent, can be expected to increase between $100 to $250 a month or more once a teen driver is added to the policy.

Parents should also take proper steps to further reduce risk by understanding how teen driving affects car and home policies. Working with your Aspen Insurance advisor is a great place to consider available options in coverage and in reducing financial exposure.

Include Your Teen in Car Insurance Discussions

Begin by making teens fully aware of the potential consequences of their actions. No one sets out to hit another car, hence the reason they are called “accidents”. Your teen should recognize driving is a privilege, a privilege which comes with responsibility.

Driving a car is piloting more than 3,000 pounds of steel and gasoline. A collision even at a slow rate of speed can cause a great deal of damage, including severe bodily injury. Teens should be aware that 98% of the time, driving is a low-risk endeavor. However, that risk increases greatly when drivers are distracted by high rates of speed, mobile phones, friend’s conversations or altered states.

As a result, automobile accidents can have far reaching financial consequences affecting your family’s financial future. As parents, we should continually reinforce driving safety and alert our teen to the negative consequences of receiving a driving citation or being at fault in an acciden, both of which result in insurance rate increases.

Teen Driving Statistics

Younger drivers may feel invincible, as in: “I can text and drive”, “I’ll keep my phone handy in case someone calls”. Statistics demonstrate something very different:

  • In their first year of driving, 1 in 5 16-year-old drivers will have an accident!
  • In 2019, distracted driving was a reported factor in 8.5% of fatal motor vehicle crashes.
  • Over 74,000 young people die or are injured each year by not wearing seatbelts.
  • 42% of high school students across the United States admitted that they text or email while driving.
  • Two-thirds of teen passenger deaths are in vehicles driven by other teenagers.
  • In 2018, 2,500 adolescents (ages 12-19) died and approximately 297,000 had nonfatal injuries resulting from motor vehicle crashes according to the most recent teen driver safety statistics compiled by the National Highway Traffic Safety Administration.
  • Underage drinking and drug use is illegal. Your automobile policy may be void if a car accident involves illegal activities.  

Taken together, these statistics show an alarming pattern of risk for less experienced drivers. In-car distractions and inexperience all contribute to a higher rate of accidents for teenagers.

Distracted Driving

According to the CDC, eight people are killed in the US each day in crashes reported to involve a distracted driver. Although not just a problem affecting teen drivers, teens are over-represented in distracted driving statistics. We should remind our teens that in three seconds, a car travels over 170 feet at thirty-five MPH.

There are three main types of distraction:

  • Visual: taking your eyes off the road
  • Manual: taking your hands off the wheel
  • Cognitive: taking your mind off driving

In the U.S. in 2018, over 2,800 people were killed and an estimated 400,000 were injured in crashes involving a distracted driver. About 1 in 5 of the people who died in crashes involving a distracted driver in 2018 were not riding in vehicles: they were walking, riding their bikes, or standing in their front yard.

Have frank discussions with your teen about the dangers of distracted driving and what distractions they need to prevent. Both holding a mobile phone or texting while driving are distractions, as is having a phone conversation while driving. Not only is cell phone use a distraction, but it is also against the law and a citable offense in many states.

Twenty-five states, D.C., Puerto Rico, Guam and the U.S. Virgin Islands all prohibitdrivers from using handheld cellphones while driving. All are primary enforcement laws; a traffic officer may cite the driver for using a cell phone. Thirty- states and D.C. ban all cellphone use by novice drivers, and 23 states and D.C. prohibit it for school bus drivers.

Currently, forty-eight states, D.C., Puerto Rico, Guam, and the U.S. Virgin Islands ban text messaging for all drivers.

Cell phones are not the only possible in-car distraction. Driving large groups of friends may cause the driver to lose road awareness for a few seconds: in those few seconds, a car traveling at 60 MPH will have traveled close to 200 feet!

Teen Education Discounts

One way to reduce the increased cost of auto insurance is with education discounts. Many insurance companies offer premium reductions for teens maintaining good school grades. Some discounts your teen driver may be eligible for include:

  • Students maintaining an average of “B” or above.
  • Teens completing a recognized driver training course, either through AAA, school or through local programs.
  • College students attending school a minimum of 100 miles away from home who do not bring their car to campus.
  • Teen (and adult) drivers using SafeDriving or TeleTrack applications receive discounts for verifiable safe driving habits.

Choose the Appropriate Auto Insurance Company

It will normally be cheaper to add teenagers to an existing parent policy rather than having teens purchase their own. Adding an additional automobile to an existing policy may enable a multi-vehicle discount.

Different insurance companies use proprietary methods for pricing young driver policies. Ask your insurance agent to research alternative possible policies, searching for the best fit for your specific circumstances.

Assigning Your Teen to the Correct Car

Some insurance companies will “assign” the most expensive-to-insure driver to the most expensive-to-insure car, increasing the total cost of your auto insurance. One possible way to reduce your insurance cost is to have the company assign your teen to the least expensive car. This will reduce the potential cost of damages and lower the monthly fees.

However, your teen must use the car to which they are assigned. If your teenager is involved in an accident driving a car they were not assigned to, there could be penalties, premium increases or negate the policy coverage.

Increase Liability Insurance for Greater Protection

Be advised that state minimums for liability insurance may not be sufficient to fully protect from lawsuits, were your son or daughter to be in a collision. It may be in your best interest to purchase umbrella policies with higher amounts of coverage for increased financial protection. If your teenager is involved in a collision and is found to be negligent, the damages could easily exceed the state minimum liability.

If you (or your teen) are found financially responsible, you could be sued in court for the amounts above and beyond your coverage maximum.

Changing Conditions

Depending on your state of residence, teens may have to contend with driving in changing conditions. The road to your house on bright, sunny can easily be navigated at 50 MPH. In high winds, or heavy rain, that same road may be unsafe at 35 MPH. Let your teen know of the varying road conditions which could impact speed and safety:

  • High water
  • Hydroplaning
  • Bright sun shining on the windshield.
  • Snow
  • Ice

All the above conditions change the operating safety and should also alter rate of speed. Teens should be advised of the increased caution required for driving in adverse conditions and the appropriate response to such conditions. They should know how to control a skid on snow, ice or mud, and proper driving speed for weather conditions.

These are all things which may not have been taught in driving classes and could increase the possibility of sliding into either other vehicles or stationary objects on the side of the road.

21st Century Driving

Cars continue to get larger and heavier, with the ability to cause considerable damage even at the lowest rates of speed. Cars are safer, and that safety engineering comes at a cost of more expensive auto repairs. Cell phones, text messages, after-school friends, dating, unfamiliar roads are all common situations which could cause your son or daughter to lose concentration with devastating results.

Make sure you and your family are protecting your financial security while minimizing the risk for your driving teen.

Aspen Insurance Agency is in Denver, CO, and services clients nationwide. We are a family run business working with multiple insurance carriers to offer our customers the coverage they need at the lowest possible cost. We offer a wide range of personal, commercial, and professional insurance to residential and commercial customers enabling the cheapest rates available. Call to speak to one of our insurance professionals and see how painless insurance shopping can be.