Business Owners Resource Network

June 18, 2009

What is a commercial auto anyway?

Filed under: Business Insurance — natewatson @ 8:20 pm

Everyone knows that you can’t insure a big rig as a personal auto. But after that, there is a lot of confusion as to when, and why, trucks and autos need to be insured as a commercial auto.

What is a commercial auto anyway? 

Everyone thinks that commercial autos are expensive, but that is not always so.  Given that they are priced per year, many are similar in price to that of a personal auto. But given that your business policy excludes all auto liability and your personal auto policy excludes all business use, having your auto as a commerical auto can be important. Let me repeat that.

Your business General Liability policy–excludes ALL automobile liability. That means if you have a truck and it says Bob’s Construction on the side in big red letters (sorry if there really is a bob’s construction), and you get into an accident and they sue Bob’s construction. Guess what. you have no coverage unless that vehicle is insured as a commercial vehicle. NONE.

If you think, well, my vehicle can be insured much cheaper by insuring it as a personal auto, and I just won’t tell the insurance company it is really a business’s auto, and I’ll save a few hundred dollars per year. Same scenario.  You get into an accident; lawyer sees that vehicle is titled in business name and sues the company. Company has no liability, but NEITHER DOES PERSONAL AUTO because personal auto policies exclude any and all business use of vehicle.  So how much liability money do you have coming your way when you get sued here, NONE!

This is very important. You spent all that time making Bob’s construction the number 1 construction company in your area, don’t let it become Danny’s construction because you failed to insure your vehicle correctly and Danny (the guy you rear-ended in the company truck) is now making a good living with your company.

The water does get a little murkier when you don’t own the company. Say you are, oh, I don’t know, an insurance agent named Nate! I drive my vehicle more than just two and from work. I take clients to lunch; I have life appointments all overt the Kansas City metro at all kinds of hours of the day. My company doesn’t own my car; do I need a commercial use policy for my car? The answer is no. I need what most companies call “business use” on my personal auto policy. This gives me the ability to drive more than just to and from work and still be covered. And trust me, if the insurance company finds out you have been lying to them, they have the option to pay only part of your claim, or even worse, none of it.

So here’s the moral of the story. If the company has its name on the title, commercial vehicle. If you own the company and over 50% of the mileage is done for the company, commercial vehicle. If the name of the company is on the side of the vehicle, commercial vehicle. If you are an employee and you go more than just to and from work, you go other places during the day for the boss, business use. If you alone own the vehicle, and you work for someone else, and you don’t go anywhere other than to work, maybe some McDonalds, and then back home…personal auto, no other insurance endorsements needed.

Trust me; don’t lose your company because you wanted to save 20 dollars. Don’t lose it either because your agent didn’t ask. Just because they didn’t ask doesn’t mean you shouldn’t.  

When’s the last time you talked to your insurance agent about commercial auto?  If the answer is a long time, or never, call me.  I would be happy to discuss what you need and what you have. 

Nathan Watson, Brothers and Associates, LLC. 913..322.3388 ext 14.

Advertisements

June 4, 2009

Only 59% Aware of Health Savings Accounts

Filed under: Business Insurance,Employee Benefits,Financial Services — michellehodges @ 1:16 pm

Great article I wanted to share that came out yesterday by Money Management Executive…

Six years after health savings accounts were introduced, only 59% of the population has heard of them, only half of these people actually understand them, and only 14% of the overall population own them, Guardian Life Insurance found in its Spotlight on Consumer-Driven Health Plans Survey. “Because these plans offer compelling benefits for both employers and their employees, we wanted to uncover the obstacles to increasing participation, identify key motivators and develop Guardian resources to expand ownership of HSAs,” said Tim Bireley, vice president of group medical at Guardian. Fifty-two percent did not know that contributions to HSAs are tax deductible, and 55% did not know that withdrawals used for qualified medical expenses are also not subject to taxes. In addition, 60% did not know that they can take the HSA with them when they switch jobs. For their part, employers also mistakenly think that HSAs are complex. Many also do not contribute to employees’ HSAs, and Guardian found that would make the plans more attractive to 61% of employees. Fifty-seven percent said that if insurance for critical illness were included, that would make HSAs more attractive. “As the economy, coupled with rising healthcare premiums, forces business owners, employees and benefit decision makes to make difficult financial choices regarding their healthcare offerings, consumer-driven health plans can provide a solution,” Bireley said.

Do you know how an HSA paired with a high deductible health plan can benefit you or your company?  Please contact me at   913-262-0600  or email mhodges@benefitsdesigngroup.cc  for more information.

March 4, 2009

Bad Insurance Costs Money.

Filed under: Business Insurance,Small Business Growth — natewatson @ 9:47 pm

 

 Bad insurance costs you money. More money in the long run than10111 good insurance first would have charged you.

I have a subcontractor in Shawnee, KS. He remodels houses. He doesn’t technically employ anyone; all of the people he uses are subcontractors. His plumbers, electricians, and painters, were all paid by his company to do work for him. He never checked to see if they had insurance.  What did he care?  They were subcontractors. His insurance wasn’t over them, right?  Except it was. Anyone you hire is under your workers comp insurance unless they have workers comp insurance of their own. It was a very costly mistake. At the end of the year, when he was audited, he had to pay on 250,000 in payroll he wasn’t counting because he thought that he didn’t have too. Now he knows, and now he is being back-charged. His new payroll is 250k higher. His new monthly payments are double as he pays for this year and last year at the same time.

This mistake almost bankrupted him. He got bad insurance advice from someone who didn’t know what they were doing. Oh, sure, they looked cheap, but in year two, they aren’t looking like such a good deal.

I see a lot of mistakes like this in the Workers comp area of insurance. Many companies start their business as one-person operations that don’t need workers comp. They get a cheap startup policy from an agent and go to work. When they succeed and add employees, they call up someone to do their workers comp. The problem is the agent didn’t know what they were doing, let the business owner misrepresent what he really was paying, and then, at the end of the year, when the company was audited, the company owed much more than expected.

Where did they go wrong? Most mistakes are from 2 misunderstandings:

 1. You cannot exclude someone just because they are family. If you are not the owner, you are counted in workers comp salaries.

2. You cannot get out of paying workers comp by having all of your employees as subcontractors. If they don’t have insurance, and lets face it, they probably don’t, you, as the employer, by law, have to provide their workers comp. You don’t count them, the insurance company finds out about them, and you get back charged.

I think the moral of the story is pretty obvious. Bad Insurance Costs Money. This is what happened to my client before I got him. Choose the bad insurance and found out it costs money too. So much so it almost bankrupted him. You may not see it at first, but having someone who knows what they are doing is worth more than a few extra dollars. In fact, it could save your business.

Do you have a stupid insurance guy story? I would love to hear it.

 

Nathan Watson, Nationwide Insurance. 913-322-3388, ext 14. 

I help you get the insurance you think you already have.

February 17, 2009

Stop Talking so fast.

Filed under: Business Insurance — natewatson @ 5:55 pm

Have you ever gotten a message like this?

“Hi this is Frank, I was referred to you by Jennie from accounting.  She said you would be the person to help solve my problem.  Please call me back at…

The next flurry of sounds and clicks is spoken so fast it sounds like it is in Swaheli?  You have to listen 17 times just to hear what the area code is. 

Why do we do this?  Why do we believe that people can understand our super-fast gibberish that we call numbers?  You would never leave the whole message this way.  I want to let you in on something, something I learned from getting those types of messages all the time. 

  • The phone number is the most important part of the message.  Not who you are or what you want.  the number.  so SLOW…D.O..W…N…. 

I see this a lot with insurance too.  You spend all this time figuring out what your new company’s name is, where you want your office to be, what you want to sell, and to whom, but when it comes to making sure your newest venture is covered for all the pitfalls of the world, people just hand someone a check.  Then down the road, when the insurance really counts, they have no idea what they have, how it works or even who to call.  They just bought the first policy they saw, or even worse, the cheapest policy they saw and assumed they were all the same. 

Insurance should be something you look at with your agent once a year.  Your business changes but your insurance doesn’t unless you change it.  If it has been 4 or 5 years since your last checkup, call your insurance agent, or better yet, get a new one.  One that understands your business and knows business change.  You need one that makes it a point to call upon you and ask what has changed.  

  • injured-blue-manAfter an accident, is the wrong time to find your not covered and worse yet, could have been for a few dollars more a month if only you would have known you weren’t covered. 

 

I understand there will always be a place for bottom rung, cheap-as-possible, no-agent insurance.   Just not covering your business.  If you remember only one thing, remember this:  This is more than your job.  This is your life.   Proctect what you have built by using a good, local insurance agent.  One that is going to help you pick up the pieces and put you back on the right track.  To get you building your business again.  To get you doing what you love again.  Don’t let one bad car wreck, one bad employee, or one bad widget end your dream.  Insurance exists to cover you for all of these things.  To help you.   We may cost a few dollars more, but I promise the good ones are worth it.  

What horror stories do you have about cheap insurance that wasn’t worth the savings?

Blog written by Nathan Watson.  Insuring Shawnee and all of Kansas City.  913.322.3388. 

“I help you get the insurance you think you already have.”

February 11, 2009

Hired and Non-Owned Insurance

Filed under: Business Insurance — natewatson @ 5:02 pm

car-wreck2

I was doing an insurance review yesterday for a tile company that services KCK, Shawnee, and Overland Park.  I noticed the owner didn’t have the coverage called “Hired and Non-Owned Coverage” This was alarming to me because the owner said he had been with his insurance agent for over 5 years! and he had never even heard of the coverage. When I explained that Hired and Non-Owned coverage was for when he or his employees were doing work for the company in their own vehicles, he asked me why he needed that coverage as all his employees should have their own insurance. I explained that most insurance companies would NOT cover the vehicle if you were doing company business in it. It is the business’s responsibility.

Send an employee out to get lunch for the office, business’s responsibility. Send an employee to the bank, business’s responsibility.                                 Send an employee to get parts, business responsibility.

Even if they are in their own car!

He was shocked that his agent had never told him about his and that his business had a huge hole in the coverage. When I did a complete review of all of his insurance, personal and commercial, I found quite a few places where he thought he was covered but he was not. He was surprised at all the questions I had considering his former agent had only asked him what he sold and how much he paid his employees. He had never even spoken with his agent after the initial setup. Now, with his new policy through me, he is set. And we setup a time for next year that we can talk about how his business has changed and if his insurance needed to change with it.

This is what I do. I make sure all of my customers actually get the insurance they think they already have. If this is something you want for your company, call me, I would love to help. 

How has your business changed since you started?

Nathan Watson, Nationwide Insurance.  913-322-3388.  x-14.                         Get the insurance you think you already have.

Blog at WordPress.com.