Insurance Industry Advises Small Businesses Not to Skimp on Coverage
insurance coverage is an expense that many small business owners might be tempted to cut back on or even forgo as they try to cut costs during the recession. They're making a bet that they won't need the coverage, but it's a bet they could lose.
Spring floods aren't too far off in the future, to be followed inevitably by tornadoes and the hurricane season. And there are the more mundane disasters that can also threaten a business -- fire, theft, power outages, even someone being injured on the premises.
Loretta Worters, vice president for communications of the Insurance Information Institute, a New York-based trade group, said insurance may seem like a lower financial priority for some small business owners right now.
"They're facing all these challenges today: rents are rising, financing hard to get,'' she said. "Things are daunting to them, but one thing they have to think of is the whole issue of being underinsured.''
An underinsured business doesn't have adequate coverage for disasters or incidents like fires, thefts or accidents. But even companies that aren't cutting back their coverage might be unwittingly uninsured. Worters noted that a business might have made improvements to its building or bought new equipment, and if an insurance policy isn't adjusted upward, payments could fall well short of the replacement costs.
At the same time, she noted, real estate values have fallen and so it might make sense for some companies to reduce coverage.
Still, an owner uneasy in this economy might decide to play the odds and either cancel a policy or cut it back too far. Or, make a mistake out of ignorance, by buying insurance to cover damage from forces such as wind, rain, hail and fire, and not checking to see what isn't covered. For example, damage from flooding or earthquakes isn't covered in such policies. That coverage has to be purchased separately.
Some owners might also decide against business interruption insurance, which is available in what's known as a business owner's policy, or BOP, which also includes property coverage. Business interruption insurance makes the coverage more expensive, but it can mean a company's survival when it can't operate because of a disaster; this type of policy covers a company's expenses and lost profits.
Many workers who have been downsized over the last year have decided to start businesses out of their homes, and many are likely to be underinsured because they mistakenly assume their homeowners coverage will protect them. The same can apply in the case of a vehicle used for both business and personal purposes.
Worters said some homeowners or standard auto policies may include a small amount of business coverage. For example, she said, someone who does freelance writing at home might not need an additional policy. But, the important thing is to check -- nobody wants to find out there is no coverage when a client coming to visit, trips over the family dog and falls.
And, Worters said, the additional coverage may come in the relatively inexpensive form of an endorsement to your homeowners' policy.
Owners of businesses in certain industries should also be aware of policies tailored to their line of work -- for example, restaurant owners might want to take out policies to cover food spoilage.
The Insurance Information Institute has information on its site, www.iii.org/individuals/business. It explains different kinds of general business coverage such as businessowners' policies and business interruption insurance. It also has sections describing the insurance needed by specific industries such as retailing, manufacturing, farming, food service and lodging.
( Source ; http://www.insurancejournal.com)
enhanced competence of directors of insuranceJAKARTA (bisnis.com): Bapepam-LK publish regulations that improve the ability to guide the assessment and consideration for company directors and commissioners perasuransian.
Based on the press of Bapepam-LK today, the latest regulations this decision improved the Director General of No.3603/LK/2004 LK Nom.78/PMK.05/2007 PMK and the ability and propriety of directors and commissioners perasuransian company.
Regulation is the latest refinement of guidelines for load tester team, the assessment system and graduation requirements. Board of Directors declared the company perasuransian get passed if at least 65% of the total value of the competence and integrity and value of the two factors is at least 65 and there is no value of 0 on the integrity factor.
For commissioners, achieve a minimum pass when 60% of the total value of the competence and integrity factors minmal 75%.
For technical director must meet the criteria 100%, while the director of the main 95%, the financial director and 90%. For the director of marketing, or membidangi kehumasan, personnel, human resources or public must meet 85% of graduation requirements. (tw)
3 large insurance company mergers japan
TOKYO (Bloomberg): Three large insurance companies in Japan dikabarkan plan merger to become the largest company in the country with income per year to reach 2.7 trillion yen (U.S. $ 30 billion).
The three insurance companies are Mitsui Sumitomo Insurance Group Holdings Inc., Aioi Insurance Co. and Nissay Dowa General Insurance Co.
According to NHK, the planned merger is the third insurance company will be announced today. But NHK did not notify the source of this news.
If the merger is done, the three union insurance company is the largest in Japan due to a revenue per year is 2.7 trillion yen or U.S. $ 30 billion.
Meanwhile, the big insurance companies in the U.S. that American International Group Inc (AIG) will close the program loan from the government (federal commercial paper) on the business unit International Lease Finance Corp. (ILFC), the company financing the flight. Closing the program after the Standard & Poor's rating down.
Subsidiary of AIG, which is financing the flight company in the world, ILFC, revealed short-term credit ratings of A2 from A1 to be, because the demand for aircraft is reduced.
ILFC loan credit approval in October of U.S. $ 5.7 billion from government programs to overcome the financial problems with commercial paper, short-term financing.
"In the loan program, they must maintain short-term credit ratings remain in the highest order. With the decline in ratings from A2 to be us, we estimate they will not longer have access to facilities to obtain it," said Philip Baggaley, Analyst & Standards Poor's. (er)
Some people ask, what about the insurance products that provide value in cash? Such as unit-linked. Where you can select the type of investment as you want. What type of insurance you should buy this or buy term insurance and invest the rest?
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