Finding fun activities within your local community can be a great way to spend time with your family this summer. However, summer travel and getaways can be a great way to give your family new and unique experiences; road trips can be a fantastic bonding experience, while at the same time educational. Some tend to avoid road trips with their families because of tales of the intolerable stress they cause; road trips, though, don’t have to be stressful!
Everyone looks forward to a fun family vacation during the summer. Some of my best memories from my childhood have been made during vacations and road trips that I have taken with my parents and siblings. There was always so much to look forward to during these trips: fun games during the long car rides, the interesting stops along the way, and even the forced family photos that we could look back on years later. Since this is something near and dear to my heart, I decided recently to buy a second home to rent out as a vacation property; I wanted to help facilitate memorable vacations for other families, just as I had as a child.
General Liability for the Self-Employed and Business Owners
Business owners and self-employed professionals need protection whether they have been in business for decades or they just began their professional career. This type of protection is known as General Liability Insurance, and it covers professionals against the cost of compensation claims due to malpractice, personal injury, and/or negligence. Depending on the type of business you are in and where your business is located, there are a few different options for you to choose from when looking for liability insurance nearby. Here, we help you understand the top five types of general liability policies and example of why businesses invest in these types of insurances.
1) Commercial General Liability (CGL) Policy:
A CGL policy protects your business against the claims arising out of bodily injury or property damage arising out of premises, operations, products, or completed operations. Additionally, it covers losses caused due to advertising and personal injury.
For example, a customer visits a store specializing in home building supplies in North Georgia . While looking through building samples, the customer falls and suffers a leg injury. The commercial general liability policy bought by the building company covers the medical expenses of the bodily injury of the customer so that the company doesn’t suffer any other losses.
2) Directors and Officers Liability Insurance:
Type of liability insurance which reimburses for loss for defense costs from legal action for alleged wrongful acts of directors and officers. Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well. This type of liability policy covers the directors and officers against the claims made by:
- Other stakeholders
For example, recently a company dismissed three employees in order to save money, but the eldest employee filed a suit claiming that a particular director had always discriminated him on the grounds of him being significantly older than most of the other employees.
Of course, after the investigation it was proven he was dismissed based on cost-cutting measures. After the trial, the company did not have to forfeit losses because of their directors and officers liability insurance bought prior to the claim protected them.
3) Professional Indemnity Insurance:
This type of policy covers the businesses or individuals who provide advice or a professional service to clients. In a case such as being sued, this type of policy will cover the compensation claims.
Let’s say you own a mattress company and one of your employees suggests a customer who is pregnant should get a foam bed. Afterward she begins to suffer severe back pain and not only wants to return the mattress and get her money back, but she also wants to sue for doctor bills for back pain. In this case, your Indemnity Insurance will cover the costs!
4) Cyber Risk Insurance:
Cyber Insurance Policies are designed to help your organization or business cover against the liability or property losses due to the electronic activity that you use whether it is online or otherwise. This policy helps to offset the risk involved with recovery after a cyber-related security breach.
One example of this in the business realm would be if a dismissed former employee of a company steals the names, addresses, and social security numbers from its customer files then turns around and sells this information to a fraudulent person who uses the information it to obtain credit cards. The affected customers file a complaint against the IT company for their breach of identity. With the policy obtained by the IT firm, however, the cyber risk insurance would aid in settling the claims.
5) Commercial crime insurance:
This type of liability policy protects the businesses against losses due to third-party fraud or employee fidelity, protecting against:
- Dishonest Employee
- Computer Fraud
We can see a recent example of this in a city where Dickey McCay has an office. An office manager was arrested for stealing nearly $60,000 from her employer over five years. In this case, had the company bought commercial crime insurance, they would have been able to protect themselves from the most commonly reported general liability claim: theft.
- Good liability risk management can reduce the chances that your business will be sued, but it can never eliminate the risk entirely.
- You or a member of your organization can make a mistake
- Technology helps your company, but also increases chance for security breaches and/or theft, so insuring your business/organization against these is a necessity.
- Depending on the degree of harm and the number of people injured and/or value of property damaged, a lawsuit could bankrupt your business, making liability insurance a necessary investment
As always, Dickey McCay is here to help answer any questions you may have. Call us today to help protect your business or organization against any future stresses or financial burdens.
Small to Medium-Sized Business Insurance: Understand Inherit Business Risks
A few years ago a close friend opened a small building-supply company. During his first year in operation, one of his customers bought some paint, took it home, and painted her a bathroom. A few days later she began to clean her walls and noticed the paint starting to peel off. She began scrubbing all around the bathroom and before she knew it she had damaged her newly painted walls and even her trim. She called my friend who’d sold her the paint and realized she had not followed the directions on the can. My friend, the business owner, had also not explicitly told her about the steps she should take prior to painting, so she sued his business.
These types of incidents happen more often than you might think. In fact, according to Forbes Magazine, “36%-53% of small businesses are involved in at least one litigation in any given year and 90% of all businesses are engaged in litigation at any given time.” An unhappy customer can cause your business a lot of money even if you, the business owner, aren’t at fault. If my business-owning friend had bought a Business Owner’s Policy, he would have been able to cover his legal costs accrued during the lawsuit. In these kinds of cases, the insurance company will even appoint a lawyer to defend you in such a case.
Since this incident, my friend has learned a lot about owning a business, and even though his company is quite small with only two employees including himself, he still is at risk by owning a store front with building materials coming in and out every day. Thankfully, he now has Commercial Umbrella Insurance. Just last week he had to use his policy when a contracted painter fell off his ladder at his store. Fortunately with his General Liability policy which is included under his Umbrella plan, his insurance was able to cover the painter’s medical bills and any out of work coverages the painter will need. With a new storefront, this kind of hiccup would have likely put him out of business before he was even able to open his new store. It is during these types of circumstances we realize how vital business insurance is, especially for a small to medium-sized businesses.
You can be an entrepreneur with a great business plan, but these types of events do not pick and choose when they will occur or to whom. These instances could derail your business before it ever really gets going. Before you take the risk of starting your business, we encourage you to sit down with your business plan and budget out the money you will need for business insurance. It will save you money and heartache in the long run.
How Business Insurance Factors Into the Tax Deduction Equation
According to the IRS, you can deduct the ordinary and necessary cost of insurance as a business expense. Most businesses are required to carry various types of insurance because of industry requirements, contractual obligations, and state laws. For example, businesses with employees must have workers compensation insurance and, in most states, provide disability to workers. Because this would classify as both “ordinary and necessary,” the premiums for these insurance policies would fall under the ordinary and necessary rule by the IRS and are deductible; a necessary expense that ends up saving you money in the long run!
What You Likely Can Deduct: Here are a few common types of commercial insurances that would most likely be considered deductible on a corporate tax return for the purposes of operating a small to medium-sized business.
- General Liability Insurance: One of the most common business insurance policies, this typically covers the business for claims involving bodily injury and/or property damage resulting from products, services or operations of the company.
- Professional Liability Insurance: Primarily referred to as errors and omissions insurance, professional liability policies protect businesses against liability incurred as a result of negligence when performing its professional services. Lawyers, engineering firms and insurance brokers are just a few examples of businesses that generally need professional liability.
- Property Insurance Insurance: This type of policy reimburses the owner of a business for the cost of repairing or even replacing damaged or lost business property, such as a warehouse or inventory, due to a covered cause of loss like a fire, bad storm, etc.
- Business Interruption Insurance: Also called business income and extra expense insurance, this is usually part of another policy like the general liability or property policy. It covers for things like lost profits, operating expenses, relocation costs, and payroll, among other things, when the business cannot function normally because of a covered cause of loss.
- Cyber Liability Insurance: One of the increasingly common policies, cyber liability policies cover legal fees/losses when a business is responsible for someone else’s (a customer, for example) data breach and resulting losses. First-party cyber liability can cover recovery costs associated with losses for the business carrying the policy.
- Workers’ Compensation Insurance: Most states mandate that employers carry worker’s comp coverage for their employees. And the states that don’t require it make it extremely expensive for businesses not to carry it. Workers compensation pays an employees’ lost earnings and medical expenses if they are or become injured on the job.
- Commercial Auto Insurance: As the name suggests, commercial auto insurance policies cover liability and property damages resulting from accidents in business-owned vehicles. Important: if you deduct your auto insurance premium, then you cannot take the standard mileage deduction on your taxes. If a vehicle is used partly for business purposes and partly for personal use, you may only deduct that certain percentage of the premium applicable to the business’ use of the automobile.
To Bundle or Not to Bundle?
Depending on the size of your business, you may want to pick and choose the types of policies are best for your business. As your business grows or changes storefronts, or maybe become primarily online, you will likely want to adjust your bundled insurance plan you have created, and this is easy to do especially if you are working with experienced insurance representatives at Dickey McCay who are able to tailor a package to protect your business and give you the peace of mind that comes with knowing you are covered.
Hours of Operation
Monday: 8:30am – 4:45pm
Tuesday: 8:30am – 4:45pm
Wednesday: 8:30am – 4:30pm
Thursday: 8:30am – 4:45pm
Friday: 8:30am – 4:45pm
Saturday: 9:00am – 12:00pm
Toll Free: 855-876-9779
146 Ocoee St.
P.O. Box 1161
Copperhill, Tennessee 37317