Business Owner Archives - Competitive Edge Insurance

Top Tips to Recession-Proof Your Business

in General Business Insurance, News, Workers' Compensation

Over the past several months, most business owners, and individuals alike, have heard mutterings about a recession.

Although we in no way can predict what’s coming, at Competitive Edge Insurance, we thought it’d be helpful to provide business owners with the top three tips they can take to recession-proof their businesses.

Let’s dive in; first, with an overview of what’s going on.

What Is Going On?

Many Americans might already be feeling the heat with decades-high inflation, record gas prices, and hefty grocery bills.

Bloomberg Economics says there’s close to a 75% probability there will be a recession by the start of 2024.

But how did this happen? And what is a recession?

What Is a Recession?

A recession, as defined by the National Bureau of Economic Research (NBER), is a “significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

This period of time is when the economy contracts and business activity slows down. This can be caused by a number of factors, including a:

decrease in consumer spending
increase in taxes
decrease in government spending
natural disaster

Businesses typically suffer during a recession, as there is less money circulating and people are more likely to save rather than spend. This can lead to layoffs, closures, and decreased profits.

As a business owner, it is important to recession-proof your business as much as possible. This means taking steps to ensure that your business can weather a recession and still remain profitable.

Contributing Factors

There are many contributing factors that have led the U.S. economy to tip its way toward a recession—inflation, supply chain issues, a nationwide labor shortage, the list goes on.

Moreover, The Washington Post notes that the Federal Reserve’s efforts to temper demand and tame prices have also been a contributing factor.

Oracle writes that “since 1950, recessions have lasted between two and 18 months.” This period can be “stressful for business owners, since they don’t know how long it will last. A business can freefall without an end in sight — if it isn’t ready.”

So let us help you prepare.

How Can You Recession-Proof Your Business?

There are many things you can do to recession-proof your business. For example, business owners can create a business emergency fund, assess their risk tolerance, reduce overhead, and more.

Minimize Workers’ Compensation Claims

One thing you don’t want in the midst of, or prior to a recession, is workers’ compensation claims being filed against your business. Why? It’s expensive.

Employers face both direct and indirect costs when a workers’ comp claim is filed.

Most obviously, when an employee is out on workers’ compensation, a business owner essentially “loses” their work. You then have to pay for another employee to pick up the slack (overtime in some cases), which can be costly.

Additionally, workers’ compensation claims can:

Increase your insurance premiums
Damage your public reputation, and
In some cases, a business can be penalized up to $136,532 per person by the Occupational Safety and Health Administration (OSHA) for repeated or willful violations

(Yikes, that’s a lot of money!)

This considered, it’s crucial (especially during this time of teetering toward a recession) to do everything you can to make your workplace safe, and therefore, reduce workers’ compensation claims.

Interested in learning how workers’ compensation plays out for remote workers? Read our article “What Does Workers’ Comp Look Like for Remote Employees?”

Create Trust and Safety Among Employees

Significant layoffs can already be observed across the nation. This considered, a recession can be an especially scary time for your employees.

During this time, as a business owner, it’s especially important to create trust and safety among your employees. Consider doing the following to build employee retention:

Keeping an open, honest line of communication
Listening to your employees
Utilizing employee engagement data
Offering consistent and effective feedback
Recognizing a job well done
Not letting team building fall to the wayside
Encouraging health and wellness and work-life balance

Invest in Insurance

The last thing you want during a recession is to get hit without the proper insurance. Typically, business profit is already top-of-mind during a recession.

If a cyber attack occurs, you receive high levels of workers’ comp claims, or an injury takes place on your commercial property, you want to be sure that you have the right insurance in place to keep your business financially protected.

Without proper insurance, a business owner may have to pay out-of-pocket for costly damages and legal claims against their company.

Additional Steps to Help

Minimizing workers’ comp claims, creating trust and safety among employees and investing in insurance are our top three tips, but there are so many other steps that you can take to help your business during a recession, such as:

1. Diversify your revenue streams

Don’t rely on just one source of income. If possible, try to have multiple, different streams of revenue coming in. That way, if one or two of them dry up, you’ll still have money coming in from the others.

2. Cut costs where you can

During a recession, every penny counts. Take a close look at your budget and see where you can cut costs. Even small savings can add up over time and make a big difference.

3. Build up your cash reserves

Having a healthy cash reserve is always a good idea, but it’s especially important during a recession. This will help you weather any tough times and keep your business afloat.

4. Focus on customer retention

During a recession, it’s more important than ever to hang onto your existing customers. Keep them happy and they’ll stick with you, even when times are tough.

5. Invest in marketing

Marketing is vital for any business, but it’s especially important during a recession. Why? Because that’s when people are scaling back their spending and being more particular about where they spend their money. If you want to stay top of mind, you need to keep marketing.

Keep Your Eye On the Prize

It’s easy to get discouraged during a recession, but it’s important to remember why you’re in business in the first place. Stay focused on your goals and don’t let tough times get in the way of your long-term success.

As a business owner, recession-proofing your company is vital to ensuring that success.

Interested in learning more about how to keep your business safe? Read on to find out what types of insurance your business needs during a recession.

Understanding Classifications for Workers’ Comp Dual Wage

in Construction, News, Workers' Compensation

What is happening with workers’ compensation insurance coverage in the construction industry today?

Well, according to Brenda Jo Robyn, founder of Competitive Edge Insurance, workers’ compensation rates are increasing in the construction industry.

Although rates vary by class, dual wage thresholds are going up—and what does this mean for employers? As dual wage thresholds increase, employers will be forced to pay their workers more to get them out of the higher-rated classes and into the lower-rated classes.

Interested in learning more? Click the video below to learn how to understand classifications for workers’ comp dual wage.

What is a Dual Wage Classification?

There are several classifications in The Workers’ Compensation Insurance Rating Bureau of California® (WCIRB) for workers’ compensation.

These tiers classify employees within a category into two levels. Either:

An apprentice, or
A journeyman

An apprentice is essentially a beginner in the field whereas a journeyman knows their trade.

Using actuarial data for losses, the WCIRB found that journeymen, those who know their trade, have fewer injuries—so they give them credits.

The Apprentice Classification

The apprentice wage, or lower wage, pays more per hundred dollars than the journeyman for workers’ compensation because lower-wage workers have the most claims.

Why? Simply put, they have less experience. An apprentice is more likely to hit their finger with a hammer than someone a journeyman who has been in the role for 20 years, for instance.

The Journeyman Classification

Journeyman wages, or the high wage, receive credits and therefore, pay less per hundred dollars for workers’ compensation coverage.

Why Was Dual Wage Classification Created?

The dual wage system was created, in the highest risk classes of construction, in order to avoid penalizing the entire group of construction.

Workers who are experienced journeymen are charged less for workers’ compensation per every hundred dollars than workers who are newer to the industry.

In short, the dual wage is based on their wages.

Dual Wage is Increasing

The WCIRB has suggested levels over time on where the split is that delineates who’s an apprentice vs. a journeyman.

These levels have gone up over the years. In fact, most dual wage will increase by dollar $2 every two years.

There are 16 classes in the construction area which move back and forth. Some of them haven’t moved since 2018. For instance, for roofing, their split level is at $27 and has been that way since 2018.

Others move every couple of years. Carpentry, for example, was $35 in 2021. Now, in 2022, it’s increased to $39.

That’s a big jump! That’s $4 to move someone into the journeyman wage.

How Does a Business Owner Save Money on Their Workers’ Compensation Insurance?

So, how do you combat these raises? Risk mitigation. This includes:

Managing your experience modification rating (essentially the number that the WCIRB gives you to grade you for losses)
Maintaining a safe workplace
Supporting mental health awareness to reduce burnout
Emphasizing proper employee training
Developing and distributing an employee handbook and code of ethics policy
Implementing a handbook auditing procedure

Interested in learning more? Read on in our article “Insurance Trends in 2022: What to Watch For.”

Don’t Create Your Own Labor Shortage

in General Business Insurance, High-Risk Insurance, News

Since even before the pandemic, millions of Americans have left their jobs. In fact, we have more than three million fewer Americans participating in the labor force today compared to February of 2020, according to the U.S. Chamber of Commerce.

So, how can you ensure you don’t create your own labor shortage as a business owner? Read on for our best tips.

Create a Strong Company Culture

What are the signs that a business has great company culture? High employee retention, transparent communication, employee benefits, employee recognition, opportunities for development… The list goes on.

But how do you get to this level? To create a strong company culture, you should consider the following:

Determine what this culture looks like
Ask for employee input and LISTEN to what they have to say
Hire for culture
Encourage (and model!) work-life balance
Make sure employees know your expectations regarding culture

Of course, this is a shorthand list of things you can do. Building a strong company culture is crucial to ensuring you maintain the workforce you do have, and don’t create a labor shortage for your own business.

Ensure Your Workplace is Safe

Your workplace, regardless of your industry, needs to be safe. This includes big-ticket items like following any regulations and codes as well as small things like ensuring rugs are adhered to the floor to prevent tripping, for example.

Ensuring your workplace is safe will help increase employee retention and lower your risk of receiving workers’ compensation claims against your business. It’s a win-win.

Read on to learn more about rising workers’ compensation claims and what you can do.

Provide Growth Opportunities for Employees

What opportunities are you providing to help your employees grow? Are you paying for outside training? Seminars they’d like to attend?

Increased employee retention is one of the best benefits of a successful learning and development (L&D) strategy. In fact, according to a LinkedIn study, “94% of employees would stay at a company for longer if the business was investing in their career development.”

Implementing learning and development opportunities for employees can help:

Retain top talent
Increase job satisfaction and morale
Improve productivity, and
Earn more profit…

In fact, research shows that “businesses that have actively interested and dedicated employees see 41 percent lower absenteeism rates, and 17 percent higher productivity.”

Consider: What training and development might your employees benefit from?

Invest in the Right Insurance Coverage

Of course, we wouldn’t be who we are without mentioning insurance. Having the proper coverage for your business makes for safer operations and employees.

Although the types of insurance your business needs vary on a case-by-case basis, most businesses need the following types of coverage at a minimum:

General Liability Insurance
Workers’ Compensation Insurance
Commercial Property Insurance
Cyber Liability Insurance
And more

Read on to learn how much business insurance should cost.

Focus On What Matters Most

Our biggest overarching rule is this: Focus on what matters most. Employee retention is all about making your workforce feel special, valued, and safe. Take some time today to think about how your specific business might achieve this.

Interested in learning more about the labor shortage? Read on to see how the California labor shortage is affecting the construction industry.

Workers’ Compensation Rates are Rising: What Can You Do?

in Construction, General Business Insurance, News, Workers' Compensation

As many business owners may have noticed, workers’ compensation rates are rising. What does this mean? Why is this happening? And most importantly, what can you do as a business owner in response?

Read on to find out.

Why Workers’ Compensation?

If you’re a business owner or an individual who is planning on employing workers when starting a new business, California state law requires you to invest in workers’ compensation insurance.

Why? Employers purchase workers’ compensation insurance to cover the medical costs and lost wages for work-related injuries and illnesses of employees. In turn, workers’ compensation protects your company against employee lawsuits.

Worker’s compensation coverage can help pay for:

Immediate medical costs (i.e. emergency room expenses)
Ongoing medical costs (i.e. physical therapy)
Partial lost wages while the employee is unable to work

Lack of proper coverage can result in fines and even criminal exposure.

Workers’ Compensation Rates Are Rising

Over the past couple of years, workers’ compensation rates have been steadily increasing across the board. They’ve been rising by 7% on average; however, this figure depends on each industry.

Moreover, in July 2022, the Workers’ Compensation Insurance Rating Bureau of California® (WCIRB) submitted its September 1, 2022, pure premium rate filing to the California Department of Insurance (CDI).

The CDI regulates California workers’ compensation rates with the help of the WCIRB, who makes recommendations based on the state’s loss ratio.

In this July 2022 filing, the WCIRB proposed a set of increased premium rates. On average, these rates are 7.6% higher than those approved the year prior on September 1, 2021.

According to the WCIRB, the average of the proposed September 1, 2022, advisory pure premium rates is $1.56 per $100 of payroll.

Read on for the WCIRB filing.

Why Are Workers’ Compensation Rates Rising?

So, why have these premiums been increasing in the first place?

The bottom line is that workers’ compensation rates are rising because there are simply more workers’ comp claims being filed.

Research shows there are many reasons why claims might be increasing, including:

Medical inflation
Workforce changes
The increasing average age of the workforce
Increased indemnity costs, and
Rising wages

Moreover, as individuals have begun to return to work in person, the number of claims regarding health and safety in the workplace has increased as well. These claims typically include:

Employee concerns about exposure to COVID-19 due to unsafe working conditions, or
Situations where employees allege they were wrongfully denied a request for workplace accommodation or leave

What Can Business Owners Do?

With this rise in claims, what can you do to protect yourself as a business owner? You can prevent workers’ comp claims by:

Prioritizing risk mitigation
Maintaining a safe workplace
Supporting mental health awareness to reduce burnout
Emphasizing proper employee training
Developing and distributing an employee handbook and code of ethics policy
Implementing a handbook auditing procedure

While this list only showcases a few of many ways to avoid high workers’ compensation premiums, it’s important to remember that it’s up to all employers collectively to keep their employees safe—thus, lowering the number of claims being filed annually.

How Much Risk Does Your Business Hold?

If writing your hefty workers’ compensation check has begun to pain you, at Competitive Edge Insurance, we challenge you to ask yourself a question: “Am I, as a business owner, doing everything in my power to create the safest workplace possible?”

If the answer is no (which it typically is), get in touch with our team today to learn what else you can do.

Learn more about 2022 workers’ compensation changes by reading our article “Insurance Trends in 2022: What to Watch For.”

Insurance Requirements for Business Owners

in EIDL, General Business Insurance, News

When it comes to protecting your business, insurance can get tricky. What policies do you need? How can you ensure you’re meeting insurance requirements given by a city, state, or government?

Don’t worry—Here we have Brenda Jo Robyn, Founder of Competitive Edge Insurance, on camera to discuss standard insurance requirements for business owners. Let’s dive in!

Why Do Business Owners Need to Comply with Insurance Requirements?

Business owners are required to have certain insurance.

Most cities, states, and governments fall into the category of asking for insurance requirements, including the SBA and the requirements they have for their EIDL loans that companies have taken out due to COVID or other disasters.

Vendors and service providers follow suit in asking for insurance requirements.

Lastly, as you might imagine, landlords frequently ask for different insurance requirements in their contracts. Anytime real property is part of a professional relationship, these requirements ensue.

What Policies Are Typically Required in Contracts?

Below is a general list of four policies you might see in a contract in terms of insurance requirements.

General Liability

The number one policy that’s required is general liability.

This type of insurance policy protects a third party in the event that there’s a bodily injury or property damage claim to your products or services that you provide for them.

General liability, for example, would also include this scenario: Let’s say you have someone come into your office (you’re either renting a space or the whole building). Then, this someone trips on your carpet and falls as they’re coming in.

General liability would be the number one policy to make sure that you have your requirements buttoned up.

Property Insurance

The next policy would be property insurance. If someone is renting their property to you, they want to ensure that it’s covered in case of a loss.

If you’re a restaurant, for example, you could imagine you’re in someone else’s building. You need to make sure not only that you have the safety elements in place (i.e. fire suppression) but also insurance for the owner of the building, should something happen.

Professional Errors and Omissions (E&O) Insurance

Professional errors and omission (E&O) insurance come into play when there’s a failure in services or technology that you might be providing. The policy will provide the company with a way to make the client whole after an error that results from this mishap or financial loss occurs.

Directors and Officers (D&O) Liability Insurance

Directors and officers (D&O) liability insurance might come into play for a business owner as well.

This type of policy is typically required by investors before they fund, and before becoming a board member. Remember, when you’re working with investors and funding, there’s a contract involved—so you’ll probably see this there.

How to Manage Your Risk as a Business Owner

So, now what do you do? Here comes the risk mitigation part.

A lot of times, you will see that most contracts ask for reasonable requirements—and it only makes sense they should have these protections in place.

We recommend, however, that you keep your eye out for these elements in order to best manage risk.

Outlandish Requirements

There are times, however, that you see outlandish requirements. Brenda Jo reminds us that these need to come up as a big red flag for you. An example of an outlandish requirement would be an unusually high minimum occurrence or aggregate limits or policies that are unrelated to the scope of the contract.

Broad Language in Indemnity Agreements

Look at broad language within the indemnity agreement that works in their favor, and not in yours. Moreover, there is such a thing as being too broad.

Remember, indemnity agreement language should always be reviewed by your attorney.

Unreasonable Required Coverage

This is a big one!

If you’re the party in the contract that the insurance requirements are being imposed upon—in construction, typically the contractor or subcontractor—it’s important to confirm that the required coverage terms are either included in your current insurance program or can be purchased at a reasonable price.

Ideally, you’ve had your broker review the contract before you sign it so that they can let you know what might be remiss in the requirements that are being put in front of you, and what you might need to purchase.

Then, is the purchase of new insurance more than what would be justified for this amount of a contract? For instance, if your contract is $25,000, and you’re required to purchase additional insurance for $5,000, does that make sense? Is this something that you can write out of the contract? Or, do you need to rework your bid?

Then, what level of insurance is necessary for each of the different policies? Do the policies make sense regarding the contract or the scope of work? For any new requirements or endorsements that need to be added, are they reasonable, and are they reasonably priced?

Interested in learning more? Read on to learn about complying with insurance requirements for construction, manufacturing, and tech start-ups.

Complying with Insurance Requirements: Construction, Manufacturing, Tech Start-Ups

in Construction, News

Insurance for your business isn’t one size fits all. As we’ve well learned, various industries have different requirements. This rings true, especially for insurance requirements regarding construction, manufacturing, and even tech start-ups.

Requirements can be regulatory or contractual. Moreover, depending on your industry you might need varying levels and types of insurance. Let’s discuss some aspects that stand across the board.

Workers’ Compensation Insurance

Workers’ compensation insurance, purchased by employers, is insurance that covers the medical costs and lost wages for employees who are injured during the course of work for the insured.

Workers’ compensation benefits and wages are provided in exchange for eliminating the employee’s right to file a lawsuit against their employer’s negligence.

Workers’ compensation insurance is required by law in California, and can help pay for:

Immediate medical costs (i.e. emergency room expenses)
Ongoing medical costs (i.e. physical therapy)
Partial lost wages while the employee is unable to work

Lack of proper coverage can result in fines and even criminal exposure.

Workers’ compensation insurance is extra important in the construction and manufacturing settings, where accidents are more likely to occur. This considered, businesses within the construction and manufacturing industries might opt for higher levels of workers’ compensation to keep their employees and business safe.

General Liability Insurance

General liability insurance (GLI), also known as business liability insurance or commercial general liability insurance, “helps protect your business from claims of bodily injury or property damage that can come up during normal business operations.”

This is important for construction and manufacturing businesses where hands-on work is occurring but also for tech start-ups. According to Insureon, general liability insurance covers “the cost of legal fees and settlements if your company is sued for:

Client injuries
Client property damage
Advertising injuries, like copyright infringement, libel, and slander

General liability insurance is often required as part of a property lease, mortgage, or client contract.” Moreover, the cost of your GLI will depend on the level of risk your company faces.

If you don’t have GLI, medical expenses and property damages will need to be paid for out of pocket. Depending on the injury or event, not investing in general liability insurance could cost you your business.

Employment Practices Liability Insurance

Employment Practices Liability Insurance (EPLI) is insurance that “provides coverage to employers against claims made by employees.”

Claims can be made for an assortment of reasons, including:

Wrongful Termination
Sexual Harassment
Wage-Related Claims
Claims of Unequal or Unfair Pay Discrimination Claims (i.e. age, race, gender, sexual orientation)
Third-Party Claims
And more

The primary industries that are susceptible to EPLI claims include healthcare, professional services, restaurant, food services, retail, and manufacturing and construction.

Read on to find out if your construction business needs EPLI.

Cyber Liability Insurance

In our digital age today, more businesses than ever are falling victim to cyber-attacks. Having a cyber liability policy in place, for any business, is crucial to keeping your business and your clients safe. This stands even more true for tech start-ups that manage sensitive information and high volumes of data.

There is both first and third-party coverage available. Implementing a quality cyber liability policy can help pay for regulatory fines and penalties, credit and fraud monitoring services, crisis management and public relations, finding and addressing the security defect, and more.

Complying with Insurance Requirements: Things to Note

The insurance policies listed above are not, of course, an exhaustive list of insurance requirements all construction, manufacturing, and tech start-ups need to meet; but rather, a list to get you thinking about insuring your business.

You might also need automobile liability and property damage Insurance, commercial property insurance, errors and omissions insurance (E&O), the list goes on.

Regardless, there are additional elements to consider regarding insuring any one of these three businesses. Let’s discuss some final things to note.

Occupational Safety and Health Administration

The Occupational Safety and Health Administration, also known as OSHA, has particular requirements regarding insurance as well as health and safety practices for a variety of industries.

Visit the OSHA website for additional information.

Certificates of Insurance

In any project, it’s important to make sure you have the proper insurance to protect yourself and all parties involved.

Every contract with a vendor or a customer will have an indemnity or insurance section of what they want to see from you as far as insurance is concerned. This includes documents that extend your policy to cover them. Those requirements are contractually driven, which means a certificate is necessary.

A Certificate of Insurance (COI) gives a summary of what coverages someone has, whether it be general liability, workers’ compensation, or property. A COI can also include a description of coverages that might be there or attached; such as additional insured status or waivers of subrogation.

Read on for more on what you need to know about certificates of insurance.

Contract Wording

A written contract is a printed document that is legally binding and details what parties can or cannot do. For this reason, the contractual language is extremely important. Contracts for construction, manufacturing, and tech start-ups might include hold harmless clauses and/or indemnification clauses.

Hold Harmless Clause

What is a hold harmless clause? According to Investopedia, “a hold harmless clause is used to protect a party in a contract from liability for damages or losses. In signing such a clause, the other party accepts responsibility for certain risks involved in contracting for the service. In some states, the use of a hold harmless clause is prohibited in certain construction jobs.”

Indemnification Clause

An indemnification or indemnity clause protects “one party from liability if a third-party or third entity is harmed in any way. It’s a clause that contractually obligates one party to compensate another party for losses or damages that have occurred or could occur in the future.”

For this reason, the wording in such contracts must be crystal clear.

With the influx of remote employees in current and previous years, it’s important to consider how workers’ compensation policies might change. Read on for more information on what workers’ compensation looks like for remote employees.

Why Does My Business Need Cyber Insurance?

in Cyber Insurance, News

Did you know, according to Advisorsmith and Insurance Journal, 42% of small businesses have experienced a cyberattack within the past year and 53% have experienced multiple data breaches?

Cyberattacks target personally identifiable information, personal health data as well as confidential financial information and can result in significant and often devastating financial loss for your business. In fact, the National Cyber Security Alliance found that 60% of small businesses that fell victim to a cyberattack were forced to close within six months due to the high financial costs necessary to recover.

Read our full guide on why your business needs cyber insurance, as well as how you can protect your business from these risks below.

What is Cyber Insurance?

Cyber insurance is a coverage policy that helps protect your business and mitigate financial risk in the event of a cyberattack. Retrieving your company data and rebuilding your systems is time-consuming and costly.

In addition, the loss of time and productivity, when a data breach does occur can damage your credit, damage your reputation with customers, cost you in service providers restructuring your security, and prevent further losses and possible penalties for improper handling of sensitive financial data.

What Does Cyber Insurance Cover?

Coverage can vary depending on the policy, however, cyber insurance generally covers:

Regulatory fines, legal fees, and penalties
Credit and fraud monitoring services
Crisis management and public relations
Finding and addressing the security defect
Notifying customers of a data breach
Restoring personal identities of affected customers
Recovering compromised data
Repairing damaged computer systems

What Businesses Need Cyber Insurance?

Every business that uses digital data—such as saving client information to your network or cloud—needs cyber insurance. However, some businesses are more heavily targeted by cybercriminals because of their valuable data and resources, such as:

Financial Services

According to Business Insider, financial firms are 300 times more likely to be targeted than other companies. Wow!

Financial services are specifically targeted because of their access to financial accounts and/or services such as allowing customers to pay bills online, transfer funds, and view account balances.

Financial institutions including the Securities and Exchange Commission, Equifax, HSBC, Lloyds Banking Group, JPMorgan as well as many other firms have all experienced cyber breaches and attacks.

Health Care

Health care organizations are responsible for significant amounts of sensitive information and, as a result, could potentially put the private records of millions of patients at risk. HIPAA Journal reports that 89% of healthcare organizations have experienced a data breach.

Small Businesses and Start-Ups

Small businesses are often targeted by cybercriminals because of their limited resources and lack of security expertise. According to the National Cyber Security Alliance, 83% of small businesses have no formal cyber security plan and 69% have no plan at all.

What Happens to My Business If I Don’t Have Cyber Insurance?

A cyberattack on a business without cyber insurance can result in the loss of hundreds of thousands of dollars between:

Various legal fees and fines
Recovery of compromised data
Damaged computer systems
And other necessary costs

According to the Ponemon Institute, the average small business pays $690,000 to recover from a cyber-attack, whereas middle-market companies can pay upward of $1 million.

Due to the devastating financial fallout, many businesses that experience a cyberattack without cyber insurance can’t recover and are forced to permanently close their doors.

Cyber insurance is a rapidly growing space and constantly evolving to fit the needs of any business. With the right policy, you can protect your business from the high costs and destructive effects of a cyberattack.

To learn more, read on for seven steps to avoid cyber security threats.

Why Do I Need Fire Insurance as a Property Investor?

in General Business Insurance, News

According to The National Fire Protection Association (NFPA), U.S. fire departments responded to about 353,100 house fires from 2014 to 2018. Moreover, the cost of recovering from a fire can range anywhere from $3,000 for a small fire and beyond $50,000 for larger fires.

This considered, it’s important to consider why you might need fire insurance—especially as a commercial property investor. Let’s discuss.

What is Fire Insurance?

Fire insurance is defined as “a form of property insurance that covers damage and losses caused by fire.” Although most homeowners’ policies come with some form of fire protection, additional coverage is often considered in the case that property is lost or damaged due to fire.

The topic of fire insurance is especially important for those who own investment properties. How many investment properties you own, could determine whether or not you’re able to use personal lines of insurance to cover fire-related issues.

Personal Lines Insurance

What is personal lines insurance? Personal lines insurance refers to any insurance that covers against “loss that results from death, injury, or loss of property.” These policies insure individuals and/or their families against a number of personal (and therefore, financial) risks caused by:

Fire
Theft
Death
Natural disasters
Accidents
Lawsuits
Illness

Personal lines insurance is especially crucial for investors that may own multiple homes, apartments, and other rentals. Whether it be a wildfire or house fire, consider how much a property investor has to lose when it comes to this type of natural disaster.

As an investor, you need to be sure that your interests are fully insured. We can help you achieve this at Competitive Edge Insurance.

Insuring Your Personal Property

Today, the costs for insurance—fire insurance included—are increasing significantly. Regardless, insuring your property is extremely important. As we’ve mentioned, this is especially true for individuals who own investment properties; both commercial and residential.

There are many insurance options out there. Personal lines include:

Single-family homes
Individual condominium units
Temporary rental properties
Multi-family properties from one to four units.

Investment property insurance varies on a property-by-property basis and can be written on either a personal or a commercial policy. If you own fewer than 4 properties, you can use personal insurance policies—even though it’s your business.

Whether you’re an investor yourself, or an attorney or financial planner working with clients who invest in property, you must be sure these investments are fully insured without umbrellas so that the total limits of liability exceeds your property assets.

Remember: All costs are going up, so property owners must plan accordingly.

This is an especially difficult pill for property owners and landlords to swallow. Although insurance is going up, you can’t increase rent by more than five to seven percent to bridge this gap.

For more information on how to insure your property, contact our team of experts at Competitive Edge Insurance. Until then, read up to find out what your homeowners insurance covers.

How to Protect Your Business From a Fire

in California, General Business Insurance, News

As a business owner, there are many things to keep track of: revenue, expenses, profit, client information, the list goes on. We’re guessing, however, that protecting your business from fire isn’t at the top of your list. We’re here to get you thinking about how to protect your business from fire.

Tips on Protecting Your Business from a Fire

Fire season is right around the corner. So, what can you do to protect your business? At Competitive Edge Insurance, we have a few strategies in mind.

Have an Active Fire Protection Plan

Ensure your business has an active fire protection plan in place. An active fire protection plan includes water spray systems, deluge systems, sprinkler systems, fire water monitors, etc. Make sure that all of these systems are tested and in good working order (functioning with fresh batteries, etc.)

An evacuation plan should be crafted and distributed to all employees. Perform practice drills with your team members to ensure everyone understands their role in the event of an emergency.

Spring Cleaning

Spring cleaning is important! When it comes to fire protection, this might look like:

Carefully storing combustible and flammable materials
Cleaning the perimeter of your building (i.e. eliminating dry brush and quick-burning foliage)

Read more in this article from VFS Fire & Security Services for everything you need to know on prepping the outside of your commercial building for summer.

Perform Routine Building Maintenance

The last thing you need during an evacuation is a blocked walkway or doorway. Ensure all fire lanes are clear and access to fire hydrants is unobstructed.

Moreover, the address of your building should be visible from the street in the event that emergency personnel are called onto the scene.

Invest in Fire Insurance

Fire insurance is defined as “a form of property insurance that covers damage and losses caused by fire.” Although most homeowners’ policies include some amount of fire protection, additional coverage is often considered in the event that property is lost or damaged due to fire.

What Could Your Business Face Without Fire Insurance?

The consequences of not having fire insurance can be detrimental considering your business is likely one of your largest assets.

Fire insurance can be essential depending on where you live. For example, in California, we’ve seen an uptick in wildfires in recent years, according to the California Air Resources Board. In fact, the area burned by California wildfires has been increasing each year since 1950. Eight of the state’s historical 20 largest wildfires have occurred since 2017.

Fire insurance can help minimize the financial burden in the event that a fire at your business does occur. For more information on how to insure your property, contact our team of experts at Competitive Edge Insurance. Until then, read up on risk mitigation for property investors.

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