Software of the Month Club 1996 May/Software of the Month Club 1996 May.iso/mac/ISO9660/ZIPFILES/SBA962.ZIP/F411.SBE

Text File | 1996-02-15 | 5.6 KB | 130 lines

@127 CHAP ZZ

        ┌───────────────────────────────────────────────┐
        │ BUSINESS INSURANCE  -- GENERAL CONSIDERATIONS │
        └───────────────────────────────────────────────┘

Insurance, like death and taxes, is an inevitable necessity
for the owner of any small business.  For almost any busi-
ness, even one that has no employees, insurance coverage
for general liability, product liability, fire and similar
disasters, robbery, theft, and interruption of business in-
surance should be considered.

For a business that has employees, workers' compensation
insurance is usually mandatory under state laws, and is
usually highly advisable even if not required; and employee
life, health and disability insurance have become virtual
necessities in many businesses and professions, if you wish
to be competitive with other firms in hiring and retaining
capable employees.

@IF005xx]Also, because your business has @EMP employees, you should
@IF005xx]be concerned about the rash of employment-related lawsuits
@IF005xx]that cost firms billions of dollars in liability settle-
@IF005xx]ments each year in the U.S.  Just one such claim, even if
@IF005xx]entirely bogus, could bankrupt @NAME.
@IF005xx]
A new form of business insurance, employment-practices lia-
bility (EPL) insurance is now available, which can protect
your firm from liability lawsuits from employees under var-
ious employment laws and regulations, such as for sexual
harassment, negligent hiring, racial bias, wrongful dis-
charge, and violations of the Americans with Disabilities
Act civil liability provisions.  Most standard business
owners' and commercial liability policies do not cover
these risks.

@IF003xx]Talk to your insurance broker about getting EPL coverage
@IF003xx]for your business, since you have employees.
@IF004xx]Talk to your insurance broker about getting EPL coverage
@IF004xx]for your business, since you have employees.
@IF005xx]Talk to your insurance broker about getting EPL coverage
@IF005xx]for your business, since you have employees.

Fidelity bonding should be considered for employees who
will have access to the cash receipts or other funds of the
business.  If you have an employees' pension or profit shar-
ing plan subject to the Employee Retirement Income Security
Act of 1974 (ERISA), employees involved in administering the
plan or handling its funds are REQUIRED to be covered by a
fidelity bond.


INSURANCE AGENTS

Since it isn't realistic to expect you to become a sophis-
ticated comparison shopper for insurance while you are trying
to get a business off the ground, you should put considerable
emphasis on seeking out and finding a good insurance agent
whom you can trust and rely on to give you good advice. There
is no easy way to find such an agent, just as there is no
sure way of finding a good lawyer or accountant.  In general,
the best approach will be to ask friends, lawyers, account-
ants or other business people you know to refer you to a top-
flight insurance agent.

Agents who have earned the Chartered Life Underwriter (CLU)
designation will, as a rule, be more experienced and capable
regarding life insurance matters than those without the CLU
credential.  This can be an additional factor to consider to
consider when selecting an insurance agent for any kind of
life insurance products.

Agents who deal primarily in property and casualty insurance
will not usually have CLU on their business cards.  Instead,
they may have the initials "CPCU" -- Chartered Property/
Casualty Underwriter -- after their name, which is a similar
mark of distinction in the field of property/casualty insur-
ance.

Another good tip in finding an insurance agent or in select-
ing coverage is to analyze your own insurance needs.  There
are several how-to books that can help you analyze your
risks and compare insurance prices.

One such book, RISK ANALYSIS:  HOW TO REDUCE INSURANCE COSTS,
written by Gary Robinson (Oasis Press, 300 N. Valley Drive,
Grants Pass, OR 97526; 1-800-228-2275) provides insider tips
on buying insurance, selecting insurance agents and lowering
your premiums and rates.  It also explains how not to buy
any more insurance than your company actually needs.


INSURANCE CONSULTANTS

If you cannot find an agent with whom you feel comfortable,
call an insurance consultant.  Ask if--and satisfy yourself
that--the consultant is a member of the Society of Risk
Management Consultants.  To belong to that group, the indi-
vidual or firm cannot be an insurance broker.  These consul-
tants are insurance experts and can give you an objective
analysis on risk management and insurance, usually at a flat
hourly fee.  Their usual hourly fee rates may seem high, but
most new businesses probably will not need more than an hour
or so of their time.  Most will bill you in quarter-hour
increments.

You will probably recoup the insurance consultant's fee
several times over in premium savings in just the first year
alone.  You should, however, be wary of a consultant who
wants to increase the number of hours by offering to create
specifications and provide a number of additional services.

Once you have met with an independent consultant and know
what is needed, shop for the insurance you need from insur-
ance brokers.  Don't let them bid up the amount of coverage
or additional types of insurance.  Use the insurance consul-
tant as you would an attorney or physician--follow his or
her advice.

If you don't know how to go about finding an insurance
consultant in your area, contact:

    Society of Risk Management Consultants
    300 Park Avenue
    New York, NY 10022
     (800) 765-SRMC