Michelle Babbino, REALTOR®

Tag: business insurance

  • Business Contracts & Insurance – How to Protect Yourself

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    Contracts are the backbone of any business, but if you’re not careful, they can create serious financial risks. Many business owners unknowingly sign agreements that conflict with their insurance policies, leaving them vulnerable to denied claims and unexpected liabilities.

    In this post, we’ll break down:
    ✔ How contracts impact your insurance coverage
    ✔ Common contract clauses that can create risk
    ✔ Tips to align your contracts with your insurance

    How Contracts Affect Your Insurance

    Many insurance policies include contractual liability exclusions—meaning if you agree to assume liability in a contract, your insurer might not cover it.

    Example: If you sign a contract agreeing to pay for any damages that occur, but your insurance policy excludes certain damages, you could be forced to cover the full cost out of pocket.

    Contract Clauses That Could Void Your Coverage

    1️⃣ Indemnification Clauses – Shifting Legal Responsibility onto You

    What it is: An indemnification clause is a contract provision where one party agrees to compensate (or indemnify) another party for certain losses, damages, or legal liabilities.

    How it affects insurance:

    • Some indemnification clauses require you to assume liability for things that may not be covered by your insurance policy.

    • Your General Liability (GL) policy may exclude claims that arise from an indemnification agreement if they extend beyond your standard liability coverage.

    • If you agree to indemnify another company (e.g., a vendor or client), your insurer might deny the claim, leaving you responsible for the full cost.

    Example:
    You run a small contracting business and sign a contract with a large company to do repair work on their office. The contract includes an indemnification clause stating that you agree to take full responsibility for any accidents on the job site, even if the client was partly responsible. If an accident happens due to their negligence (faulty wiring, unsafe conditions), your insurance might not cover the claim because you agreed to indemnify them, meaning you’re now paying for everything out of pocket.

    How to protect yourself:


    ✔ Review indemnification clauses carefully before signing
    ✔ Negotiate the clause to ensure it aligns with your insurance coverage
    ✔ Ask your insurer whether your policy covers indemnification

    2️⃣ Hold Harmless Agreements – Requiring You to Cover Damages You Didn’t Cause

    What it is: A hold harmless clause is a contract provision where one party agrees not to hold the other responsible for certain damages, losses, or liabilities. Essentially, it protects one party from lawsuits or claims, transferring the risk to the other party.

    How it affects insurance:

    • If you agree to a hold harmless clause, your insurance may not cover damages because you’ve contractually agreed to take responsibility for something that normally wouldn’t be your fault.

    • Many General Liability (GL) and Professional Liability (E&O) policies have exclusions for contractual liability unless it falls under “insured contracts” (which vary by policy).

    Example:
    You own a janitorial company and sign a contract to clean an office building. The contract includes a hold harmless agreement stating that you take full responsibility for any damage in the building during your service, even if it wasn’t your fault. If a pipe bursts overnight due to faulty plumbing, the building owner could claim you are responsible per the contract—even though the damage wasn’t caused by your work.

    If your insurance sees that your contract made you responsible for damages beyond normal liability, they might deny the claim—leaving you to cover the repair costs.

    How to protect yourself:

    ✔ Avoid overly broad hold harmless clauses
    ✔ Limit liability to only damages directly caused by your business
    ✔ Consult your insurer before signing agreements that extend liability

    3️⃣ Waivers of Subrogation – Preventing Your Insurance from Recovering Costs

    What it is: A waiver of subrogation is a clause that prevents your insurance company from recovering costs from a third party that was at fault for a loss.

    How it affects insurance:

    • Normally, if your business suffers a loss due to someone else’s negligence, your insurance company can seek reimbursement (subrogation) from the responsible party or their insurer.

    • If you’ve signed a waiver of subrogation, your insurer loses this right—meaning they can’t recover costs, and you may end up paying higher premiums or losing coverage altogether.

    Example:
    You own a landscaping company and lease a truck. The rental contract includes a waiver of subrogation, meaning if the rental company’s poor maintenance causes an accident, your insurer can’t sue them to recover repair costs. Instead, your insurance must pay the full amount—and they might pass that cost onto you through higher premiums or denied coverage.

    For more details, check out this National Association of Insurance Commissioners (NAIC) Guide on contractual risks.

    How to Protect Yourself

    ✔ Always review contracts with your insurance agent
    ✔ Negotiate terms that align with your coverage
    ✔ Ask for legal advice before signing major agreements

    If you’re not sure whether your contracts and insurance policies work together, let’s chat! Schedule a call with me today

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  • Cyber Insurance: Why Every Business Needs It

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    In today’s digital world, cyber threats are one of the biggest risks businesses face. Whether you store customer data, process payments online, or simply communicate via email, your business is at risk of cyberattacks—and the costs can be devastating.

    Many business owners assume their General Liability or Business Owner’s Policy (BOP) covers cyber incidents, but in reality, most standard policies exclude cyber risks. That’s where Cyber Insurance comes in.

    What is Cyber Insurance?

    Cyber Insurance helps protect businesses from financial losses caused by cyberattacks, data breaches, and other digital threats. Coverage typically includes:

    ✔ Data Breach Response – Covers the costs of notifying affected customers, legal fees, and credit monitoring services.
    ✔ Ransomware & Cyber Extortion – Helps pay ransom demands if hackers lock you out of your system.
    ✔ Business Interruption – Covers lost revenue if your business is temporarily shut down due to a cyberattack.
    ✔ Legal Fees & Regulatory Fines – If sensitive customer data is leaked, businesses may face legal action or government fines.

    For a full breakdown of what Cyber Insurance covers, check out this National Association of Insurance Commissioners (NAIC) guide.

    Why Small Businesses Are Prime Targets

    Many small business owners believe cybercriminals only target large corporations, but 43% of cyberattacks are aimed at small businesses (Verizon 2023 Data Breach Report). Why?

    • Weaker security measures compared to large enterprises
    • Valuable customer and payment data stored in business systems
    • Phishing scams targeting small teams with fewer security protocols

    Real-World Example: The Cost of a Cyberattack

    A small law firm experienced a ransomware attack, locking them out of critical client files. The hackers demanded $50,000 to restore access. Without Cyber Insurance, they had to pay the ransom out of pocket and still suffered weeks of downtime, leading to lost business and reputation damage.

    According to IBM’s Cost of a Data Breach Report, the average cost of a data breach for small businesses is $4.45 million—a risk no business can afford to ignore.

    How to Protect Your Business

    1️⃣ Invest in Cyber Insurance – Work with an insurance expert to get coverage tailored to your business.
    2️⃣ Train Employees on Cybersecurity – Phishing scams are one of the leading causes of breaches.
    3️⃣ Use Strong Passwords & Multi-Factor Authentication – Reduce the risk of unauthorized access.
    4️⃣ Back Up Your Data Regularly – Ensure you can recover files in case of a ransomware attack.
    5️⃣ Update Software & Security Patches – Keep systems secure from known vulnerabilities.

    Is Your Business Protected?

    If you’re not sure whether your current policy covers cyber threats, it’s time for a review. Cybercrime is evolving, and your insurance coverage should evolve too.

    💬 Let’s chat—schedule a quick call

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  • How Hiring a New Employee Impacts Your Business Insurance

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    Hiring a new employee is a major milestone for any business, but it also brings with it certain legal and financial responsibilities, especially when it comes to business insurance. Many business owners don’t realize that hiring even one employee can significantly impact their insurance coverage. From increased premiums to new policy requirements—it’s important to understand how this decision could affect your business in the long run.

    Before you hire someone, here’s what you need to know about how it impacts your insurance and how to avoid costly mistakes.

    1. Workers’ Compensation – Is It Required?

    Most states require businesses to carry Workers’ Compensation insurance as soon as they have at least one employee. This insurance helps cover medical expenses and lost wages if an employee gets injured on the job.

    If you operate in an industry where physical labor or job-related injuries are possible, workers’ comp is even more critical. Without proper coverage, you could be responsible for paying out-of-pocket for medical bills and legal costs.

    🔎 How to Check Your State’s Workers’ Comp Laws:

    ✅ What You Should Do:

    • Check your state’s minimum employee threshold for Workers’ Comp. Some states require coverage for even one employee, while others allow exemptions.
    • Contact your insurance agent before hiring to ensure you’re in compliance with local regulations.

    2. Payroll-Based Policies – How They Affect Your Premium

    Certain insurance policies, such as Workers’ Compensation and General Liability, base their premiums on your payroll. When you hire a new employee, your total payroll increases, and in turn, so will your insurance premiums.

    🔎 Example:
    A business owner currently pays $5,000 annually for Workers’ Compensation insurance based on a $100,000 payroll. If they hire a new employee with a $40,000 annual salary, their premium will likely rise accordingly.

    ✅ What You Should Do:

    • Estimate your payroll growth before hiring to better anticipate changes to your premiums.
    • Ask your agent if pay-as-you-go Workers’ Compensation is an option, as this allows you to pay premiums based on actual payroll instead of estimates.

    3. Increased Liability Risks – More Employees, More Exposure

    Every additional employee increases your liability exposure. If an employee damages property, causes injury, or even makes a mistake that leads to a lawsuit, your General Liability insurance policy may need higher limits to cover the added risk.

    🔎 Common Liability Risks:

    • A new employee accidentally damages a piece of equipment while performing their duties.
    • A worker leaves a hazard in the workplace, causing another employee or client to trip and fall.

    ✅ What You Should Do:

    • Review your General Liability policy and make sure your limits are adjusted to cover additional risks.
    • Consider Employment Practices Liability Insurance (EPLI) to protect your business from lawsuits related to wrongful termination, discrimination, or harassment.

    4. Commercial Auto Insurance – Are Employees Driving for Work?

    If your new employee drives company vehicles or uses their personal vehicle for business tasks, you’ll need to update your Commercial Auto Insurance.

    🔎 Why This Matters:

    • If an employee is involved in an accident while driving for business, and they’re not listed on your policy, your insurer may deny the claim.
    • Hired and Non-Owned Auto Insurance (HNOA) may be needed if employees use their own cars for business purposes.

    ✅ What You Should Do:

    • Add new employees to your commercial auto policy if they will be driving company-owned vehicles.
    • If employees use their personal vehicles for work, make sure they’re covered under Hired & Non-Owned Auto Insurance.

    5. Before You Hire: Steps to Take

    Before bringing a new team member on board, follow this simple insurance checklist:

    ✅ Check your Workers’ Comp requirements. Some states require coverage for just one employee.
    ✅ Update your payroll estimates. This affects Workers’ Comp and General Liability premiums.
    ✅ Review liability coverage. More employees mean higher exposure to claims.
    ✅ Confirm auto insurance coverage. If the employee drives for work, make sure they’re listed on your policy.
    ✅ Consult with your insurance agent. A quick conversation before hiring can prevent costly mistakes later on.

    Hiring a new employee is a sign of growth for your business, but failing to update your insurance could cost you thousands in unexpected claims, fines, and penalties. By taking the time to review and update your policies before hiring, you can protect your business and ensure smooth growth as you expand your team.

    Need help reviewing your coverage? Contact us today to make sure your business stays fully protected.

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  • Safeguarding Your Small Business: Understanding and Mitigating Lawsuits

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    Safeguarding Your Small Business: 

    Running a small business is no small feat. Alongside the everyday challenges of managing operations and serving customers, there’s also the looming risk of facing lawsuits. It’s a scenario no entrepreneur wants to entertain, yet statistics show that a significant portion of small businesses end up entangled in legal disputes. However, there’s a proactive measure every small business owner can take to mitigate these risks: investing in comprehensive business insurance.

    The Reality of Lawsuits for Small Businesses:

    It’s a startling fact that around 90% of small businesses will face legal action at some point in their existence. These lawsuits can stem from various sources, including disgruntled customers, contractual disputes, employee grievances, or even regulatory compliance issues. No matter the origin, the financial and reputational repercussions of litigation can be devastating for small enterprises, often leading to bankruptcy or closure.

    Understanding the Risks:

    One of the first steps in safeguarding your business is understanding the common types of lawsuits small businesses encounter:

      1. Customer Complaints: Whether it’s a product defect, service dissatisfaction, or injury on your premises, customer complaints can quickly escalate into legal proceedings if not addressed promptly and effectively.
      2. Contract Disputes: Breach of contract claims can arise from agreements with vendors, partners, or clients, highlighting the importance of clear and legally binding contracts.
      3. Employment Issues: From wrongful termination to discrimination allegations, employment-related lawsuits pose significant risks to small businesses, emphasizing the need for robust HR policies and compliance measures.
      4. Regulatory Compliance: Failure to adhere to industry regulations or licensing requirements can result in costly fines and legal penalties, underscoring the importance of staying informed and compliant with relevant laws.

    The Role of Business Insurance:

    While no business is immune to lawsuits, having the right insurance coverage can provide a crucial safety net. Business insurance policies typically offer protection against a range of liabilities, including:

      1. General Liability Insurance: This foundational coverage protects your business against third-party claims for bodily injury, property damage, and advertising injury.
      2. Professional Liability Insurance: Also known as errors and omissions insurance, this policy shields businesses that provide professional services from claims of negligence or inadequate work.
      3. Employment Practices Liability Insurance (EPLI): EPLI covers legal costs arising from employment-related claims such as discrimination, harassment, or wrongful termination.
      4. Product Liability Insurance: If your business manufactures or sells products, this coverage protects against claims of product defects or failures leading to injury or property damage.

    Preparing for the Unexpected:

    In addition to securing adequate insurance coverage, small business owners can take proactive steps to minimize their exposure to lawsuits:

      1. Implement Risk Management Practices: Conduct regular risk assessments to identify potential hazards and implement preventive measures to mitigate risks.
      2. Maintain Accurate Records: Keep detailed records of transactions, contracts, employee interactions, and safety protocols to provide evidence and support your defense in case of a lawsuit.
      3. Seek Legal Guidance: Consult with legal professionals specializing in business law to ensure compliance with regulations, draft contracts, and address any legal concerns proactively.

    Navigating the complex landscape of small business ownership requires foresight, resilience, and proactive risk management. While the threat of lawsuits may seem daunting, it’s a reality that every entrepreneur must confront. By investing in comprehensive business insurance, understanding potential risks, and implementing preventive measures, small business owners can safeguard their ventures against the financial and reputational perils of litigation. Remember, preparation is key to protecting your business and ensuring its long-term success in an unpredictable world.

    Your GSI Insurance Group (Trusted Choice®) Independent Insurance Agent can be your hero, helping you determine your risks and the types of insurance you should consider. To protect your business, contact your GSI Insurance Group agent today.

    To protect your business, contact your GSI Insurance Group agent today.

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  • Patent infringement risks and related insurance coverages

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    What If Your Big Idea Isn’t Yours? Intellectual Property Risks

    Your business is chugging right along, creating products and efficiencies, offering services and deploying marketing strategies that separate you from competitors. Everything is working flawlessly.

    And then it happens. You receive notice that something about your business has drawn the attention of an intellectual property (IP) owner and she’s not pleased. She demands that you cease and desist any activity involving her IP and informs you of her intent to follow up with a formal allegation of financial damages.

    Hear that sound? It’s your business crashing into a brick wall.

    “You took something of mine without permission, so now I’ll take your money and future.” — Angry person who thought of your idea first

    Such a claim, even if proven groundless, can force your business to make abrupt changes to workflows and incur substantial legal defense costs. At best, the claim is a crushing blow. At worst, it could mean the end of your business.

    To protect yourself and your business, you need to understand the various types of intellectual property, examples of IP-related risks to your business and how to prepare financially for such a risk with insurance.

    Slow Down … What Is ‘Intellectual Property’?

    The World Intellectual Property Organization (WIPO) defines “intellectual property” as “creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.”

    Four common types of IP are patents, trademarks, copyrights and trade secrets.

    Patent: An exclusive right granted for an invention that is registered with the United States Patent and Trademark Office (USPTO).

    Trademark: A sign that distinguishes the goods or services of one enterprise from those of another that is registered with the USPTO.

    Copyright: A sign that describes the rights that creators have over their literary and artistic works. A copyright is not required to be registered, but creators may choose to register them with the Unites States Copyright Office.

    Trade Secret: Broadly defined, this is a way of using information in a business to obtain an economic advantage over competitors who do not know or use it. Trade secrets are not required to be registered.

    How Big of a Deal Is Intellectual Property? It’s big. Really, really big.

    In June of 2018, the USPTO issued patent number 10 million. The first patent, granted in 1790 and signed by George Washington, was for “improvements in the making of pot ash and pearl ash.” Not surprisingly, the influx of internet-based technology led to a surge in patents and copyrights in the late 1990s that continues today.

    IP rights can range from something meticulously described, such as specific software programming code, to something broad in scope. One patent owner, Personal Audio, sued podcasters, big and small, claiming its patent covered the entire concept of podcasting. U.S. Patent Officials invalidated some of Personal Audio’s claims, and the federal appeal court agreed with them. Podcasters everywhere are now safe, unless Personal Audio gains an audience with the Supreme Court and a decision in its favor.

    Is My Business at Risk?

    The range of IP ownership is mind-boggling, and the safest way to identify your exposures is to hire an IP law firm to thoroughly examine your current business practices and evaluate any future plans. For most businesses, doing this is cost-prohibitive, so the burden of due diligence falls on you. (But, hey, searching the USPTO’s patent database sounds like loads of fun, doesn’t it?)

    IP ownership is not exclusive to technology, but if your business uses technology, it’s safe to say that you’re at risk of violating another’s IP. A few examples may include:

      • Building an app for your business that uses code or functions patented by another.
      • Using code from another software program or developer to improve a business function.
      • Copying and pasting content from a website onto your company’s website or social media account without permission.
      • Including a video clip in a marketing email without permission of that video’s owner.

    A few non-technology-specific examples may include:

      • Using a slogan, song or logo that’s trademarked by someone, in any medium, such as radio, television, print, etc.
      • Manufacturing any product — such as auto part, tool, building material, plastic good, pharmaceutical, cosmetic, etc. — for which the design, mold, form and/or chemical compound is patent-protected.
      • Serving a meal at your restaurant using a patented recipe. (Yep, that’s actually a thing.)

    Pretty Please? Must I Always Pay to Use Someone’s IP?

    Obtaining permission from the IP owner is essential, and in some cases, it may be granted at no cost. For example, many companies post on their websites descriptions of their IP, the circumstances in which permission for use is required, and their terms for its use.

    If you want to use a copyrighted work, you might not need permission if the law of fair use applies.

    In other cases, owners charge a licensing fee because they wish to be compensated for use of their intellectual property. If the fee is not paid, they can allege damages ranging from the unpaid cost of a use license to reputational harm, or even punitive damages. To avoid potential legal costs, businesses may rush to settle such disputes quickly — including those in which the business, if it had the funds for legal defense, may have prevailed.

    And speaking of legal costs, according to American Intellectual Property Law Association’s “2017 Report of the Economic Survey,” the average legal cost of one type of IP litigation — patent infringement cases with $1 million to $10 million as stake — was $1.7 million in 2017. In cases with below $1 million at stake, the average legal cost was $800,000.

    Insurance for IP Claims

    Traditional business liability insurance is designed for claims alleging:

      1. Bodily injury.
      2. Property damage.
      3. Personal and advertising injury.

    The only one of the three that might kick in for an IP claim is personal and advertising injury. Unfortunately, even if it does, coverage is typically limited. In many policies, for example, coverage may apply only if a claim alleges that your business infringed on certain IP rights specifically in an advertisement for your goods or services.

    There are specialty insurance policies designed to cover a variety of IP exposures.

    For example, patent insurance is available to provide coverage should your business be sued for infringing on a patent. Other types of IP insurance policies are available and vary depending on the nature of your business. Such policies are typically sold at limits starting at $1 million.

    The flip side. If you are concerned about others infringing on your IP rights, there are policies designed to cover your legal costs if you are the one who needs to sue.

    “This IP stuff is confusing and scary!” — An overwhelmed business owner

    Yes, technology has made IP rights easier to violate, and IP owners can be relentless in their pursuit of perceived offenders, big and small.

    But technology has made IP rights easier to protect, as well, and you don’t have to brave the world of intellectual property risks alone.

    Your GSI Insurance Group (Trusted Choice®) Independent Insurance Agent can be your IP hero, helping you to determine your risks and the types of IP insurance you should consider.

    To protect your business, contact your GSI Insurance Group agent today.

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  • Insurance Menu for Fast Food and Quick Service Restaurants

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    Insurance Menu for Fast-Food and Quick-Service Restaurants

    Fast-food and quick-service restaurants carry many of the same risks as other restaurants and businesses — for example, property damage, employee theft, and cyberattacks. A typical commercial policy generally will cover these common types of risks for a fast-food restaurant. However, if a restaurant is part of a franchise, leases its premises, or seeks a bank loan, it may be required to purchase additional insurance to cover risks that are specific to the fast- and quick-service food industry.

    If you own or operate a fast-food or quick-service restaurant and are concerned about whether you are properly insured, talk with your local Trusted Choice Independent Insurance Agent®. As a trained professional, your agent is there to help you determine which insurance coverages your business is required to maintain as well as those it would be prudent for you to consider.

    Here’s a look at typical coverages that the owner of a fast-food or quick-service restaurant might need:

    General commercial insurance

    General commercial insurance, including property and liability, provides standard coverages that all restaurant owners need. Commercial property insurance covers damage from fire and weather events and generally replaces damages to a building, its fixtures, and contents. For restaurants, commercial property usually extends to exterior signage and landscaping for the business as well.

    Commercial liability is needed for claims that others can make against a quick-service food business. Two types — product and premises — are available to help protect businesses against risks like food poisoning, hot coffee spills, and slip-and-falls, to name a few.

    Business interruption insurance

    If your fast-food or quick-service restaurant ever is forced to close temporarily, business interruption insurance can help you replace lost income. Different types of business interruption insurance can also cover income losses due to events like food spoilage. Your Trusted Choice agent can help you determine what would be most suitable for your restaurant.

    Cyber liability insurance

    Any business in the modern age needs cyber liability insurance. For quick-service restaurants, cyber liability is essential to replace lost income if a business is temporarily unable to do business because a computer system is under attack by hackers. Depending on the policy, cyber liability can also cover security system repairs and upgrades. If customer data is affected by a cyber breach, cyber liability insurance also covers credit monitoring for those customers.

    Workers’ compensation

    Even the safest fast-food and quick-service restaurants can be dangerous for employees. You provide your employees with the best safety training possible but working in kitchens still comes with risks of fires, burns from hot food, injuries from knives, and slips and falls. A workers’ compensation policy is not only recommended but often required by law depending on the state where your restaurant does business. Your Trusted Choice agent will know the local insurance laws and regulations you must meet.

    Commercial vehicle insurance

    Does your restaurant offer delivery service? Does your restaurant own those vehicles? Do employees use their own vehicles? Commercial vehicle insurance is necessary to cover any cars, trucks, or vans used for business purposes.

    Insurance requirements

    You will need to check with your GSI Insurance agent to ensure that your coverage meets the requirements of those your restaurant is under obligation to. For example, if you are a franchisee, your franchises will have specific insurance requirements. When you meet with your independent agent to discuss coverage, be sure to have your franchise agreement on hand to make sure all requirements are met.

    Similarly, banks and mortgage companies can also have insurance requirements for the businesses they work with. To protect its own financed assets, your financial institution may require you to meet minimum amounts of coverage for your restaurant.

    Oftentimes, fast-food and quick-service restaurants lease the property they operate in. Those landlords may require specific insurance coverage for your restaurant. Once again, make sure to review your lease with your Trusted Choice agent at GSI Insurance Group.

    Work with a reliable expert

    From general commercial coverage to specific coverage requirements, your restaurant has unique insurance needs that aren’t always easy to navigate. Working with your Trusted Choice agent at GSI Insurance Group today can save you time, frustration, and potential legal difficulties. And you’ll be a happier restaurateur when you have the assurance that you’re properly protected and insured.

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  • Hurricane Insurance for Business

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    Before the Hurricane: Safeguard the Future of Your Business

    Are you a business owner? Here are two alarming statistics about natural disasters for you: As many as 4 of 10 businesses that experience a natural disaster never recover. Worse, at least 1 in 4 businesses that are forced to close in the wake of a disaster never reopen. And if your business is small, or if all of your operations are in one location, the outlook worsens.

    If your business is located in a hurricane zone, you need to have a disaster plan in place.

    Luckily, you have an abundance of resources. You can find step-by-step help for disaster planning, response and recovery in FEMA’s Emergency Management Guide for Business and Industry. Other sources include ready.gov and the Insurance Institute for Business and Home Safety (IBHS).

    Insurance Considerations

     Once the hurricane has passed, you may need quick access to funds to:

    1. Repair damage to your business
    2. Mitigate lost

    Does your business have insurance to provide the funds necessary to survive a disruption in your income? What should you consider when reviewing your business’s insurance plan?

    Direct Hurricane Damage

    Review your property insurance for common threats. Be sure your policy includes coverage for the threats commonly associated with hurricanes, such as wind damage and falling trees. Note that many standard property insurance policies do not include coverage for common threats such as damage caused by flooding, power outages, or the cost for repairs specifically associated with building code compliance. (For example, if the electrical wiring in your building is not up to code, any additional cost incurred during storm repair to update the electrical system to meet code would not be covered).

    Don’t assume coverage is perfect. Even if you see that a threat is covered by your policy, note that the coverage for some items may be limited. For example, many policies will cover damage caused to your property by a fallen tree, but the cost of removing the fallen tree may be limited or not covered at all.

    Your policy may also may include coverage limitations for outdoor property such as fences and signs as well as personal property (like tools, equipment or stock) that is left outdoors. To help identify coverage and limitations, consider scheduling a policy review with your GSI Insurance Group Agent.

    Review your deductible. Some policies include a separate deductible for claims caused by a hurricane or named storm. Such a deductible is typically higher than the policy’s deductible for other types of claims like fire or theft.

    A hurricane deductible may be calculated based on a percentage of the value of property at the time of the damage. For example, say your building is valued at $100,000. Your policy includes a standard deductible of $1,000 and a separate “hurricane deductible” of 4%. If your building is partially damaged by a fire, you are responsible for the first $1,000 before the insurance company will kick in any funds. However, if your building is partially damaged by a hurricane, you are responsible for the first $4,000.

    Note that some states have laws regarding the application of such deductibles. To see if your state has special rules regarding deductibles, contact your Trusted Choice® Independent Insurance Agent.

    Floods, a Consequence of Hurricanes

    Floods are the most common and costly natural disaster in the U.S., according to FEMA. The definition of “flood” encompasses many sources of rising or flowing water and includes torrential rain and tidal surge. It’s no surprise that flooding usually accompanies a hurricane, and the damage it causes can be costlier and more widespread than that caused by a hurricane’s winds.

    It’s essential for you as a property owner to know that most property insurance policies do not cover flood damage. Flood insurance is typically available through the National Flood Insurance Program (NFIP).  Your Trusted Choice® Independent Insurance Agent at GSI Insurance Group is the best source to assist you in putting together a flood insurance plan for your business.

    Lost Income

    It’s easy to see how significant property damage from a storm could harm your business. But here’s something you may not know: The resulting loss of continued income is the leading reason so many businesses are never able to reopen after the storm has passed.

    The good news is that there’s a type of insurance designed to help businesses like yours maintain an income stream after the storm. It’s called business interruption insurance, and it provides income for your business to fulfill its financial obligations (like bills and payroll) as well as to mitigate financial losses due to fewer customers.

    Unfortunately, all too few business owners know about business interruption insurance, or they make the costly decision not to purchase it.

    Business interruption insurance can also mitigate supply chain disruption caused by a hurricane. For example, say your restaurant survived the storm with little or no damage, but your primary food supplier’s warehouse was destroyed. Even though your restaurant was not directly damaged, the financial consequence of the hurricane on your business is still significant. Ask your Trusted Choice® Independent Insurance Agent if it may be possible to amend your business interruption insurance policy to include coverage for your business should another business on which yours depends suffers crippling damage.

    Include Insurance in Your Disaster Plan

    You need a disaster plan for your business, and no disaster plan is complete without a review of your insurance coverage. For assistance, call your Trusted Choice® Independent Insurance Agent at GSI Insurance Group today.

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  • Are You a Management Consultant? Insure the Future of Your Business

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    Are You a Management Consultant? Insure the Future of Your Business

    Workforces have changed. Today, consultants are commonly found in strategic roles across businesses. The evolution began long before the pandemic. Decades ago, management consultants began to stake out functions where they could step into companies and other organizations, teaming with their management to map strategies to cut costs, improve customer relationship management, leverage data analytics, introduce new business processes, introduce new technologies, augment skillsets, make supply chains and procurement more efficient and effective, and in some instances, assume responsibility for functions, such as public relations, payroll or external workforce management. Those are just some of the ways in which management consultants engage with organizations.

    Large or small, management consultancies must manage the risks that accompany their operations. If you own a management consultancy, GSI Insurance Group, your Trusted Choice Independent Insurance Agent® can help you analyze and mitigate the risks with the right insurance coverage. Your agent will also touch base with you regularly to understand how your business is evolving and consequently, how your insurance needs are changing.

    What coverages does a management consultancy need?

    Professional liability coverage. As is true of other professionals, consultants are hired for their experience and knowledge. Irrespective of their expertise, mistakes happen. Someone misses a detail, or something happens that has a negative financial impact on the consultant’s customer. The customer sues if they believe the consultant failed them and cost them money. That leads to legal expenses and more if a court finds in favor of the plaintiff. In some instances, such a lawsuit could jeopardize the consultancy’s business and put an individual’s assets at risk, depending on court costs and the damages awarded to the customer.

    General liability insurance. If someone is injured on the job; if property is damaged by an individual working for the consultancy; or if remarks are made that are thought to be slanderous, general liability insurance can provide protection, particularly if legal action is taken. Costs can mount whether a consultant is at fault or not, and, as in the case of a professional liability claim, a court award can be sizeable.

    Additionally, when engaged by a company, government agency, or other organization, a consultant may be required to demonstrate that they have a certain amount of liability insurance before a contract is signed.

    Property insurance. In the event of a fire, a natural disaster, or theft, it’s important that your property is insured. In addition to rebuilding or repairing a facility, equipment may need to be replaced or an alternate work site may be required for the short term so that work can continue, making it possible for the consultancy to fulfill its contractual obligations even as a facility is being repaired or rebuilt.

    Clauses in these policies vary. Coverage for lost revenue may be included. Your Trusted Choice agent can assess your needs and determine which marketplace policies will be most appropriate for your management consultancy.

    Directors and officers liability insurance. A sole proprietor may not need this type of policy, a consultancy with directors and officers will most likely want the company to insure them in the event they need to defend themselves against a lawsuit or other legal costs associated with actions involving criminal or regulatory proceedings.

    Cyber risk insurance. Given the growth in cybersecurity crime, nearly every business needs this coverage, and management consultants are no different. They handle customers’ proprietary information or even personal data. As explained by the U.S. Department of Cybersecurity & Infrastructure Security Agency, this insurance helps organizations mitigate against the risk of a cybersecurity incident whether it damages an organization’s network, brings business operations to a halt or a hacker accesses proprietary or personal data. Such coverage is usually not included in liability policies.

    Automotive or fleet insurance. If a consultant or its employees drive a company vehicle or rent vehicles that are operated while doing the consultancy’s business, the company will need automotive  or fleet insurance. The policy may need to include comprehensive, liability, medical and property coverages.

    Other potential insurance needs. If a consultancy has employees, the business will need to look at coverages for them. Among those are: workers’ compensation, healthcare, life insurance and disability coverage.

    While management consultants have much to consider as it relates to insurance and risk mitigation, the good news is that we are available to help evaluate what coverage is needed and to identify the policies that will best meet the consultant’s needs. Call GSI Insurance Group today.

     

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  • Do You Need Employment Practices Liability Insurance?

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    Do You Need Employment Practices Liability Insurance?

    As a business owner, you’re likely familiar with the various risks and liabilities that come with running a company. However, one type of insurance that you may have overlooked is Employment Practices Liability Insurance (EPLI). EPLI provides coverage for businesses against claims made by employees regarding employment practices, such as wrongful termination, discrimination, harassment, or retaliation.

    The National Law Review explains that “EPLI provides coverage for claims made by employees alleging various employment-related wrongs such as wrongful termination, discrimination, harassment, and retaliation.” These types of claims can be expensive and time-consuming to defend, and EPLI can help cover the costs of legal fees, settlements, and judgments.

    Here are a few reasons why you should consider purchasing EPLI for your business:

    1.  Employment-related claims are common. Unfortunately, employment-related claims are not uncommon in the business world. Even if you have strict policies in place and follow all employment laws, an employee may still bring a claim against your company. EPLI can help protect your business against these claims and the associated legal costs.

    2.   It can save you money in the long run. Defending against an employment-related claim can be expensive, even if you win the case. EPLI can help cover the costs of legal fees, settlements, and judgments, potentially saving your business a significant amount of money in the long run.

    Forbes stresses the importance of EPLI for small business owners, stating that “even if a small business owner thinks they can handle any claims against their company, the reality is that lawsuits can quickly become expensive and time-consuming.” The article notes that a single employment-related lawsuit could potentially bankrupt a small business, making EPLI a wise investment.

    3.  It can protect your business’s reputation. If your business is faced with an employment-related claim, it can damage your reputation, making it difficult to attract new customers or clients. EPLI can help mitigate this risk by providing coverage for public relations expenses, which can help repair your business’s image.

    Insurance Journal highlights the increasing prevalence of employment-related claims and the importance of EPLI for businesses of all sizes, stating that “even if an employer does everything right, they could still find themselves facing a lawsuit.” EPLI can provide peace of mind and financial protection for businesses facing these types of claims.

    Is EPLI insurance right for my business?

    It’s required by law in some states. Some states require employers to carry EPLI coverage, so it’s important to check the laws in your state to see if you’re legally required to have it. Even if it’s not required by law, it’s still a good idea to consider purchasing EPLI to protect your business.

    If you’re a business owner, Employment Practices Liability Insurance is an important consideration. Even if it’s not required by law in your state, it can protect your business against costly and damaging employment-related claims.

    At GSI Insurance Group, your Trusted Choice Independent Insurance Agents®, we are trained professionals who can help you determine if EPLI would be a smart purchase for your business. After assessing your needs, we can recommend a selection of coverages that best suit your company’s unique needs.  

    Get a quote today!

     

     

     

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  • Commercial Umbrella Insurance: When General Liability Meets Risky Business

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    Commercial Umbrella Insurance: When General Liability Meets Risky Business

    Insurance considerations for businesses can be many and overwhelming, and even with the best coverage in place, there can still be limits. That’s where a commercial umbrella policy comes in. Designed to give businesses extra coverage for those costs that exceed policy limits, an umbrella policy can be a saving grace for businesses hit with a claim that results in legal costs, medical bills, damage to others’ property, and judgments and settlements — to name a few examples.

    How does commercial umbrella insurance work?

    Basically, umbrella coverage extends the coverage that a business already has, providing insurance coverage beyond the limits of general policies.

    Most businesses have general liability coverage as well as other coverages that pertain to the specifics of their business, such as commercial auto, hired and non-owned auto insurance, or workers’ compensation. Depending on the business’s risk level, however, additional coverage may be needed to provide extra payouts for substantial liability claims that can strike at unexpected times.

    Examples of what commercial umbrella insurance can cover include:

    • Customer injury (e.g., slip and fall injuries)
    • Employee injury lawsuits
    • Libel
    • Product liability
    • Property damage lawsuits
    • Reputational damage
    • Vehicular accidents

    What can’t be covered by a commercial umbrella policy?

    There’s a lot that commercial umbrella insurance can cover, but underlying coverages must be in place in order for a commercial umbrella policy to be effective, and oftentimes the umbrella policy insurer will require a certain amount of coverage for the underlying policies. So, for example, commercial umbrella may not provide any coverage for commercial auto claims if a company does not already have a commercial auto insurance policy for a specific amount of coverage in place.

    Additionally, commercial umbrella doesn’t extend all commercial insurance policies. Typically, this type of insurance doesn’t cover claims for insurances such as property or errors and omissions (E&O).

    Other examples of liabilities that commercial umbrella typically doesn’t cover are discrimination and malpractice lawsuits and business property damage.

    Who needs umbrella insurance?

    Commercial umbrella insurance isn’t necessarily for everyone, but with how quickly lawsuit costs can escalate and result in catastrophic losses for many small businesses, it is increasingly becoming a necessary coverage.

    Businesses that would most benefit from commercial umbrella include those with increased risks of exceeding their typical business insurance coverage limits. For example, a company that has commercial property that is open to the public has increased liability, because working directly with people in an area with high foot traffic exposes the business to lawsuits related to third-person injury (e.g., slips and falls).

    Businesses that own and/or operate many vehicles are also great candidates for commercial umbrella, as well as those that work in hazardous conditions, such as construction. Oftentimes, businesses like construction companies may be required to have a certain amount of coverage as dictated by a contract. Umbrella coverage can often bridge that gap. For example, say a general liability policy has a limit of $2 million and a contract requires a business to have coverage up to $5 million. Umbrella insurance can step in and cover the additional $3 million required by the contract.

    How much coverage a company should get depends on the industry and risk level. Properly assessing a company’s risk is crucial. First, it’s important to ensure the company is covered for the often-catastrophic costs of legal counsel, lawsuits, medical care, or other damages. Second, properly assessing risk will protect a company from paying too much for coverage that isn’t right for it.

    Is umbrella insurance right for my business?

    At GSI Insurance Group, your Trusted Choice Independent Insurance Agents®, we are trained professionals who can help you determine if umbrella insurance would be a smart purchase for your business. After assessing your needs, we can recommend a selection of coverages that best suit your company’s unique needs.

     

     

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