Posts

Which of these factors will reduce my Commercial insurance premiums?

Do you know the in’s and out’s of commercial insurance? Test your premium knowledge by taking the quiz below!

Which of these will reduce my Commercial insurance premiums?

Need some more help after taking that quiz? Read more about the four types of insurance you should have for your business here!

Hiring in California: How to Reduce Your Risk

Hiring new employers can be risky for company culture and the bottom line. 

Since new employees are hard to come by, sometimes the decision to hire is rushed and there can be increased risks involved with the hiring process. 

Even Brenda Jo Robyn, founder of Competitive Edge Insurance, screens employees pre-hire on Motor Vehicle Records (MVRs). This checks if they have a clean record and can they legally drive for your company, which ultimately will help with company rates. 

Screening Employees

Who you work with matters.

On one hand, creating a positive company culture will benefit your employees and overall employee retention, which reduces financial and social risk. One way to create this company culture concerns how you screen potential employees in order to avoid a toxic environment. 

A DMV screen costs 60 dollars and has proved to be worth the extra step. This DMV screen includes a general background check and driver’s license check. 

It’s important to require DMV screens every year. This can save your company a lot of time and money in the long run by retaining the right employees. 

Lastly, if your employee is driving on company time, it is important to make sure that the employee has their own car insurance.

Intellectual Property

In California, your client list can be considered intellectual property. In each employee offer letter, however, it’s crucial to have a separate section outlining that all clients will stay connected with the company if they were to leave. 

If you have failed to do so already, you might consider reaching out to current employees and stating the new company policy. 

Physical Space

The separation of class (for example, warehouse space vs. office space) for employees might take a couple of extra steps as a business owner but will reduce risk when hiring new employees. The separation between the physical warehouse and office space is the main separation to be considered as a business owner.

There are regulations for how the space is separated. For example, for some, areas being separated by chain link is considered acceptable. 

Invest in EPLI

The Employer’s Professional Liability, also known as EPLI, causes different claims to arise from employees. There are a few ways to protect your business from a flood of EPLI claims. Employee lawsuits are rising and in return, settlements are becoming even more expensive. Although there are different types of insurance, workers’ compensation and EPLI are both ways to reduce risk with employee benefit plans. 

EPLI is crucial to invest in as a company if it comes to a disgruntled employee—even if you are a small business. In the chance that your company gets sued, your EPLI insurance will cover it.

High-Risk Coverage

High-risk insurance addresses companies whose coverage was either terminated because of a claim, those who are new and cannot get coverage because of industry risk, or those who have experienced drops in revenue or industry disruption such that carriers are broadly refusing coverage. 

You might be wondering, what risk class am I in? Luckily, there are various ways to determine this subgroup:

“An insurance risk class is a way for insurers to underwrite policies based on one’s belonging to a particular risk group.

People in each risk group will generally share similar characteristics that help insurers better estimate the chances that the policyholder will file a claim

Riskier risk groups will pay higher premiums—for example, people who are sick, older, or have a poor driving record.” 

As a business owner, it is important to put the gates, systems, and processes in place to protect yourself, and Competitive Edge is here to help! 

We follow the practices we write about because we believe in the importance of preventative risk. For those who are interested in reading more about what classifies as high risk, read on.

Bundling Insurance: Pros and Cons

If you’ve ever seen a Geico or Progressive commercial, you have probably heard the term “bundling insurance” thrown around, but is it actually worth it as a commercial provider? 

Bundling insurance is when you choose to get multiple faucets of insurance through the same company. While it can sometimes save you money, there are potential downfalls as well. 

Pros of Bundling Insurance

For commercial insurance, the pros of bundling your insurance might include: 

Higher Savings 

There are multi-policy discounts that might be applied to your bundled insurance. Depending on the provider and your personal preference, the discount can range anywhere from 5 to 25%.

Less Clutter 

Mehmet Murat Ildan said, “If you have a complex life, make it simple; if you have a simple life, continue it that way!” 

If you’re a small business owner, the concept of a simple life might be long gone—the pursuit of your passion can take up all the hours in the day. This is why finding small ways to declutter your life is crucial to finding balance.

Bundling your insurance might be a small way to organize your life and finances.

Insurance Security 

If you make any claims on one type of insurance but are covered by the same company for another type, you are less likely to be dropped by them.

Cons of Bundling Insurance

Not Always Cheaper

While one of the main draws towards bundling insurance is saving money, there are cases where this isn’t the case. However, this all depends on your history. If you have a poor credit score or traffic violations, this might hinder your chances of getting a higher discount for bundling (likely in the 5% range compared to 20%). 

You’re Stuck

If you choose to bundle your insurance through the same company, there isn’t a ton of room to look for other rates. If you’re bundling your insurance through the same company, they might raise your rates without much room for discussion.

Keep in Mind

If you do feel like bundling your insurance, there are some guidelines you can follow to ensure you understand what you’re getting into (even though there are short and long-term benefits of bundling).

  • Evaluate all third-party options
  • Compare quotes
  • Keep an open mind 

Contact us at Competitive Edge today for information on bundling insurance!

Four Types of Insurance Coverage for your Business

There are so many options for insurance that it can be overwhelming to know which research steps to take as a business. At Competitive Edge, we help you navigate what coverage best fits you and your business. 

Health and Wellness 

Niche beauty insurance solutions can miss areas of business insurance that might bridge gaps in the event of falls or other general liability claims. With health and wellness insurance, unique situations are bound to arise depending on your business’s current environment and changes. 

The various Health and Wellness sectors that Competitive Edge caters to include: 

  • Beauty 
  • Spa Owners
  • Hair Salon Owners
  • Nail Salon Owners
  • Fitness
  • Yoga Studio Owners
  • Pilates Studio Owners
  • Dance, BarreFit, and Additional Exercise Studio Owners
  • Martial Arts Studio Owners
  • Health
  • Naturopathy Practices
  • Audiologists
  • Speech and Occupational Therapy Centers
  • Alternative Therapy Centers
  • Acupuncturists

To provide you with the right coverage from the right carrier, we need to know about your business. It’s not enough to put all cosmetology companies in one box, all spas in another, and all beauty product companies in yet another pre-planned box.

Cyber Liability

Cyber liability is a growing industry because of the evident rise in technology, and the hacking that comes with progress.

Does this sound like news to you? Don’t worry—we already wrote an article here for you to read about reducing cybersecurity risk. 

It’s important to understand what might be covered under your cyber insurance policy. 

  • Data Breaches
  • Intellectual Property Rights
  • System Failure
  • Damages to a Third-Party System
  • Cyber Extortion
  • Business Interruption

Traditional business liability insurance likely won’t cover any cyver risks associated with your business. 

Bonding

Surety bonds offer an important secondary level of coverage. 

A surety bond is a contract involving three parties. It is a promise to be liable for the debt, default, or failure of another.  These three parties include:

  • The Principal: The party that purchases the bond and undertakes the obligation to perform the act as promised.
  • The Surety: An insurance company that guarantees the obligation to be performed. If the principal fails to perform the act as promised, the surety has a contractual obligation for the losses.
  • The Obligee: The party who requires and receives the benefit of the surety bond.

There are two categories of surety bonds: contract surety bonds and commercial surety bonds.

Contract surety bonds are typically written for construction projects. If a contractor defaults, the surety company is obligated to find another contractor to complete the contract. Another option for the surety company is to compensate the project owner for the financial loss incurred. There are a few bond types of contract surety bonds.

Contract sureties are required during a federal construction contract valued at $150,000 or more. State and municipal governments have similar regulations. Note that contract sureties may also be used with a private owner.

Commercial surety bonds, on the other hand, cover a broader range of surety bonds. These are required of individuals and businesses by federal, state, and local governments.

These bonds can be required by the government to obtain a license. For example, mortgage brokers, contractors, and auto dealers may be required to obtain a license or permit bond. These bonds can also be required to protect various statutes, regulations, ordinances, and other government entities.

General Business Insurance

General business insurance covers areas such as property damage, bodily injury, product liability, libel, slander, and copyright infringement.

Hindsight is no place for general business insurance conversations as lawsuits are a sad reality for many businesses. Just one bodily injury or property damage claim can take away everything you’ve worked so hard to build. General liability insurance provides businesses with coverage for most damages, injuries, medical costs, legal fees, and settlements in the case that you’re being sued.

Construction Insurance

Shock losses from large claims can make it difficult to get affordable insurance in the high-risk field of construction. If your insurance was canceled or non-renewed, we can help. 

Our depth of experience and exemplary reputation with the carriers we work with can find a home for your hard-to-place and high-risk clients can find the right coverage. The fact is, every business can find coverage, you just have to take the time and know where to look. 

The businesses we work with include: 

  • Roofing
  • Construction
  • Commercial Property
  • Commercial Real Estate
  • General Liability (CGL)

Errors and Omissions Insurance

In the CRE industry, agents are at higher risk of being accused of failing to meet a client’s expectations, failing to document decisions or actions, or failing to act in a customer’s best interest. This could be an error on a title or an oversight in a property listing, which could lead to a costly lawsuit. 

Errors and Omissions (E&O) insurance covers against financial losses from lawsuits filed as a result of an agent’s work in the real estate profession. These policies cover liability related to the following issues:

The client may claim that you made an error that led to financial loss. In a lawsuit regarding professional mistakes, you may be at risk of losing big, considering the size of commercial property transactions.

An example of this is when a real estate agent misstates the square footage of a property. If the agent has Errors and Omissions Insurance, however, they may be covered for attorney’s fees, court costs, settlements, judgments, and fines. 

Potential E&O Exclusions

While it’s important to know what E&O insurance covers, it’s also important to understand potential exclusions. Some common exclusions in E&O coverage include claims resulting from dishonest or criminal acts. As well as claims associated with a polluted property. If any agent causes bodily harm or death to another person, or the agent causes damage to someone’s property, their claims will not be covered under E&O insurance. 

In the CRE industry, it’s more common to face a lawsuit related to errors and omissions so it’s best to be covered before you need it. Roger J. Stewart is an expert in providing coverage for real estate professionals and has helped various CRE investors and agents avoid risk and save money throughout the years.

At Competitive Edge Insurance, we work with insurance carriers across the country to place all types of business coverage. We are always seeking out new insurance companies to write hard-to-place and high-risk business insurance. 

Don’t let cancellation dissuade you from finding comprehensive coverage, we can help! 

Contact us today at Competitive Edge to find out more information.

What Classifies High Risk?

At Competitive Edge, we specialize in high-risk insurance. We often get the question, “What is high-risk insurance, and how do I know if I need it?”

Well, the answer is, if you’re a small business owner, general contractor, or even car owner, you likely need high-risk insurance. Depending on the industry you’re in, however, it can be difficult to fund coverage or losses. 

There are a couple of ways to identify what classifies high-risk insurance. 

Risk Class

Investopedia defines risk class as, “A group of individuals or companies that have similar characteristics, which are used to determine the risk associated with underwriting a new policy and the premium that should be charged for coverage.” 

There are some main points that are needed to understand the risk that is associated with coverage: 

  • “An insurance risk class is a way for insurers to underwrite policies based on one’s belonging to a particular risk group.
  • People in each risk group will generally share similar characteristics that help insurers better estimate the chances that the policyholder will file a claim
  • Riskier risk groups will pay higher premiums—for example, people who are sick, older, or have a poor driving record.” 

Once you determine if you qualify for high-risk insurance, there are additional factors that will determine your premium. These might include: 

  • Age
  • Amount of coverage
  • Number of years the coverage is guaranteed
  • Risk class
  • And more!

Additional Classifications

One example of a scenario of hard-to-place insurance is from our very own founder, Brenda Jo Robyn of Competitive Edge Insurance. Brenda Jo had to pay an extra $15,000 in order to get her directors on board for her project.

If you have had excessive losses, shock loss, or are a startup (tech and service), it can be challenging to get professional liability coverage. There are, in fact, some extreme costs associated with high-risk coverage.

So, even the professionals have dealt with the difficulties and hoops that surround high-risk insurance (trust us, we get how frustrating it can be to navigate). That’s also why we’re here to help! 

Contact Us Today! 

Competitive Edge Insurance can help you perform a comprehensive review of all your risk exposure. 

Reach out today for more information from our experts on high-risk insurance! 

BEWARE: Workers’ Comp Insurance for Independent Contractors

As you may know, most states require employers to have workers’ compensation insurance. These insurance policies can help recover most of your employee’s lost wages while they recover from a work-related injury or illness.

It also helps to cover your employee’s medical expenses as it provides their family with death benefits if they, unfortunately, pass away.

What is Workers’ Compensation Insurance?

Workers’ compensation insurance are policies that provide medical benefits and wage compensation to workers injured on the job, in exchange for eliminating their right to file a lawsuit against their employer’s negligence.

Workers’ compensation benefits are designed to help employees if they are unable to work, cover medical expenses, as well as other expenses and rehabilitation costs associated with disability or illness. As you look to explore workers’ compensation options, it’s important to look for one that provides adequate coverage and compensation for your employees.

When you invest in a properly designed policy, it ensures you and your employees remain financially secure. It’s also important to look at the specific benefits that are offered within your policy. Typical workers’ compensation insurance policies cover medical benefits.

What is Covered with Workers’ Compensation Insurance?

Specific workers’ compensation laws vary depending on your state; however, the most common compensation states that require workplace injury insurance include the following:

  • Payment for lost wages
  • Vocational rehabilitation
  • Permanent disability
  • Temporary disability
  • Medical costs and treatment 

How to Prepare for Employee Claims

Accidents happen. It’s part of life. It doesn’t matter how safe your business is, there’s always the chance an employee will get sick or injured on the job. For this reason, nearly every state requires business owners to have coverage for their employees. Different states, however, have various regulations. 

Ensure you have an expert on your team to help understand what your specific business needs are. For example, if your business is in California, you are required to obtain workers’ compensation insurance even if your business is as small as just one employee. In Florida, however, you need this coverage if you have at least four employees. 

Signing up for workers’ compensation depends on the location of your business. Typically, states recommend you purchase workers’ compensation insurance through a private insurance company, while others may require you to buy it through a state-run insurance fund.

It’s also important to understand the cost associated with investing in workers’ compensation insurance. The risk associated with your specific business will determine the cost of your insurance payments. This all sounds pricey, but remember: the costs associated with not having workers’ compensation insurance might be the motivation you need to start considering your options.

Without workers’ compensation insurance, you put yourself and your business at risk of fines, and could even face potential jail time for not complying with regulations. If an employee runs into a problem that would have been covered by workers’ compensation insurance, you may be responsible for covering their expenses, and you may also open yourself up to litigation.

What You Need to Know About Workers’ Compensation as an Independent Contractor

Every contractor needs general liability insurance. While the law does not require it, it is considered best practice to ensure against the kinds of injuries and lawsuits general liability is targeted to.

Large contractors may own commercial buildings that require property insurance, where smaller contractors or those with a specialty may need different coverage. 

At Competitive Edge, we don’t claim to know your needs until we talk to you. What’s right for one company may not be a choice that meets your needs. Even if you have suffered a shock loss, large claim, or lawsuit, and find that your options have narrowed, we can work with you.

The first step is to show us under the hood so we can help you find the right carrier and coverage to protect your business today and always. Contact Competitive Edge Insurance today for more information about high-risk coverage today!

Unique Risks of Cannabis Insurance

The emerging cannabis market has created a new space for industry coverage. There are unique risks that come with cannabis insurance that shouldn’t be overlooked. If you’re wondering the difference between cannabis and hemp insurance, read our article explaining the differences here. But for now, let’s talk about the unique risks of cannabis insurance.

General Risks

Cannabis and CBD products require a custom product liability policy for their manufacturers, retailers, distributors, cultivation, facilities, and more. This coverage applies to any business working to bring a product to market. These custom product liability policies help to defend your company against claims and allegations and to pay damages if your business is found liable if an incident were to occur.

These claims can vary, but some of the most common in the cannabis industry include:

  • Bodily injury or property damage caused by a product misuse
  • Product-related/manufacturing defects that result in some kind of loss
  • Inhaled, edible, and infused products that may have caused illness
  • Faulty/misused equipment (which includes vape cartridges, batteries, and lighters)
  • Marketing/labeling misrepresentations

For these reasons, product liability insurance is essential to your cannabis coverage. Similarly, you may want to consider product recall insurance that would cover the costs of removing a defective product from the market, and further preventing third-party claims. 

Unique Risks

The National Association of Insurance (NAIC) acknowledges that companies might need to reevaluate their coverage when considering cannabis and hemp. With the rising popularity of different forms of cannabis (think edibles), there are mental effects that need to be accounted for with insurance risk.

NAIC claims that products like edibles, “increase the risk of product liability and safety recalls. The psychoactive effects of CBD raise the risk that products may be deemed mislabeled, misrepresented or harmful.”

Young people have shown more interest in illicit drug use in recent years, which could change the insurance services and risks available.

Some other unique risks associated with cannabis coverage to consider: 

  • Cannabis businesses are complex
  • The market is constantly changing
  • Policies are not on the same playing field
  • Vaping products are muddling the market

Carriers have their own best interests at heart and only cover the safest bets to protect themselves. At Competitive Edge Insurance, we build your case with the carrier to ensure that you get the right coverage at the best price based on your real-world conditions. Learn more at our website today! 

Payment and Performance Bonds Explained

The two are an odd pairing—unique in their own way but dependent on each other. While payment and performance bonds have their differences, both are essential to protect yourself as an individual or even business owner. Let’s explore the differences.

Payment Bonds

In simple terms, a payment bond enforces that everything must be paid once a project is completed. Payment bonds are also surety bonds and are required for most state projects based on the Miller Act

The Miller Act was passed by the U.S. General Services Administration Public Buildings Service (GSA) with the intention to explain how payment bonds protect subcontractors and suppliers.

The GSA responds to any reports of nonpayment, following the legal action needed and protected by the Miller Act. The GSA states that “the Miller Act requires that prime contractors for the construction, alteration, or repair of Federal buildings furnish a payment bond for contracts in excess of $100,000.” 

Payment bonds additionally play a major role in construction. As an insurance company, we have relationships with carriers who understand the specifics of construction risk and can provide better solutions, better prices, and more comprehensive coverage—even for hard-to-place and high-risk companies.

This is where payment and performance bonds come into play. The reasoning behind payment bonds is protection. Investopedia states that “a payment bond guarantees a party pays all entities, such as subcontractors, suppliers, and laborers, involved in a particular project when the project is completed.”

There are legal consequences to breaking a contract through the Miller Act. The GSA expands on the topic: “Failure by a contractor to pay suppliers and subcontractors gives such suppliers and subcontractors the right to sue the contractor in the U.S. District Court in the name of the United States.” 

Performance Bonds 

The main differentiator between payment and performance bonds is that a performance bond ensures the employer is satisfied with the job. While both are surety bonds, performance bonds can be helpful in industries apart from construction. 

A performance bond, according to Investopedia, “ensures the completion of a project. Setting these two together provides the proper incentives for laborers to provide a quality finish for the client.” 

A performance bond has three parties involved: 

  • The principal is the primary contact in the performance bond and is responsible for performing the contract
  • The obligee is the person receiving the obligation
  • The surety is responsible for making sure each party complies with the performance bond obligations

Surety bonds are a line of credit granted to the principal to reassure the obligee that the principal will fulfill their side of the agreement. 

Often used in contracts where trust or relationships have not yet been established, surety bonds put the company’s financial well-being at risk. In these cases, the hiring entity can request that the contractor be bonded.

Competitive Edge Insurance offers various types of bond coverage. But remember, a surety bond is not an insurance policy. The payment made to the surety company is paying for the bond, however, the principal is still liable for the debt. Learn more about bond coverage by contacting Brenda Jo today.

Multifamily Property Owners, What’s Next?

Here are a few ways you can begin preparing for a better 2021 in the multifamily real estate industry.

Cyber Liability Coverage for the New Era of Ransomware

With cybercrimes on the rise, it’s time to look not only at your practices but also your cyber liability coverage.