Did you know...

October 2015

ABS Launches Liability Coverage for Portfolio Management Firms ▼

ABS continues to deliver more liability insurance products for the financial services industry with the new launch of Liability Coverage for Portfolio Management and Asset Management firms. ABS now delivers individually underwritten coverage for portfolio management and asset management firms that is tailored to your firm’s unique practice and protection needs. This program is individually underwritten through Liberty Mutual, an industry leader in liability insurance products and services with extensive knowledge of the portfolio management and asset management sector.

Contact ABS for more information.

Disaster Preparation isn't just about tsunami's and earth quakes ▼

Disaster preparation isn’t always about disasters of biblical proportions, the majority of risks that a business faces are much common, but it isn’t meant to minimize their potential impact on a business. Many common disasters can shut a business down for weeks if not months, disasters such as floods and loss of key business information.

When we talk about flood the general cause is usually water damage to an office, its equipment and information (both paper and electronic). A broken pipe flooding an office over a weekend can seriously damage an office. Do you have the right office contents insurance in place because damaged furniture and equipment is on thing that you need to prepare for.

The second common disaster is damage or loss of key business information such as client or member files. How do you replace lost information through breach of confidential information from loss or theft of business computers and laptops?

The first place to start is by taking inventory of all the property (both physical and information) that you need to protect in the event of a disaster. Review your office contents or property insurance with your broker to ensure that your specific needs are addressed, don’t just assume that general policies will always provide the coverage you need. Ensure that electronic information is backed-up on a regular basis and that those back-ups are kept off site in a secure location - computers are easy to replace, the information on them is not. All computer equipment should have proper passwords on them so that if lost or stolen confidential information cannot be accessed.

Develop a plan for how your business will operate should your office not be useable after a fire or flood. How will you re-route phone lines, will your website and email still be accessible, how will you communication this situation to clients/members, and, assure them that you can still provide the service they expect?

Importance of Plans for Small Business & Practices ▼

Business Plans are not just for start-up or major corporations, small and medium sized businesses also need these important road maps to be truly successful. A planning document should cover a two to three year period and it is important to organize and understand how you want to grow and manage changes in your business.

Risk identification and Risk Mitigation:

A business plan should outline your strategic objectives, but for every objective you can’t just look at the opportunity, you have to look at the potential risk involved. Business plans help to distill what risks you are willing to take and how you plan to manage or avoid the risks that you are not willing to take.
A small business plan should cover the following:

  • Strategic objectives
  • Management expectations
  • Objectives and strategies for growth
  • Managing staff and operations
  • And acquisition of new business or succession planning for exiting the business.

You don't have to develop a small business plan from scratch, by using Google searches it can lead you to many different templates that are available to you on the internet. Simply find a template that best suits your needs and modify it according to your specific requirements.

Selecting the Right Business Insurance 

What are the types of business insurance that are available?

There are different types of business insurance that provide different types of coverage. There's coverage against damages to the location of your business (office, factory, etc.), vehicles, and equipment and inventory. There is business insurance to protect against losses resulting from crimes, such as theft or even employee fraud. There are many types of business liability insurance, protecting your company in the event of a lawsuit. There is also business insurance to provide coverage for extended leaves of absence due to illness.

What are the general categories for business insurance?

Business insurance can be divided into four broad categories:

  • Business property insurance — reimburses any insured party who has suffered a financial loss because property (land, buildings, personal property, etc.) has been damaged or destroyed.
  • Business liability insurance — delivers protection to pay for bodily injury or property damages when the insured is legally responsible.
  • Business automobile insurance — provides protection against damages caused by the vehicles used for business purposes. Similar to personal auto insurance, comprehensive coverage provides compensation for vehicle damages resulting from fire or theft; collision covers losses due to an accident; and liability coverage protects you if you are sued for an accident involving a company vehicle.
  • Business umbrella insurance — extends coverage for losses above the limit of another policy or policies. An umbrella policy may also extend coverage for losses not normally covered in the other policy.

Outside of these four primary categories, other types of business insurance coverage include: workers compensation insurance, business interruption insurance, group health insurance, group life insurance and disability insurance.

Choosing the right limits and deductibles

Once you select the right type of coverage for your business, you'll also need to choose the appropriate limits and deductibles to suit your needs. These factors can greatly influence the premiums you pay:

  • Get the best coverage at the best price — obtain and compare multiple quotes from reputable carriers and independent insurance agents. If you are a member of an industry organization, check to see if they have a recommended insurance provider
  • Compare the details — policies from different carriers may have the same name, but not the same coverage. Be very clear on what is and is not covered in each policy.
  • Considerations for home-based businesses — owners of small home-based businesses can often add a rider to their homeowner’s policy instead of needing a separate business insurance policy. Discuss your particular situation with an insurance agent to determine what is best for you.

Understanding the common elements and exclusions in policies

Before deciding the type of coverage for your business, be sure you know what various policies will cover. Here are some common elements and exclusions:

  • Endorsements — specialized coverage types are more restricted in scope and cover situations excluded in a comprehensive general liability insurance policy. Sometimes you can pay an additional premium for an "endorsement"–an amendment to a comprehensive that will cover a standard exclusion. When liability relates to a unique risk (e.g., professional services by an accountant), a specialized policy will be required (e.g., an errors and omissions or E&O policy), in addition to a comprehensive general liability insurance policy.
  • Coverage of occurrences — a comprehensive policy covers liability for any "occurrence" during the period—that is, the policy will cover liability for personal injuries or property damage that the insured caused to another party while the policy was in effect. A lapse in insurance coverage opens a window of vulnerability.
  • Expected or intended damages — damages that were subjectively "expected or intended" by the insured are excluded from coverage. Courts have ruled that to deny a claim, it is not sufficient for the insurance company to prove that a "reasonable person" would have expected the outcome. Rather, the insurance company must prove what the insured party was actually thinking at the time, which is a tall order to meet.
  • Intellectual property, advertising, etc. — coverage for personal injuries to other persons—as a result of libel; slander; defamation; invasion of privacy; copyright, patent, trade name and trademark infringement; and unfair business practices—traditionally has been included in a comprehensive policy. Recently, however, insurance companies have added exclusions from coverage for copyright, patent, trade name and trademark infringement. They are also narrowly defining "advertising," to limit or deny coverage. Be sure to examine any proposed comprehensive general liability policy for this type of coverage.
  • Data as property — coverage for damages to another person's property only may apply if the property is "tangible," or the damage "physical." It's up for debate as to whether computer data is "tangible," or capable of "physical" harm. So if you provide computer hardware, software, or programming services, make sure you know what your policy covers.
  • Property insurance distinguished — a single policy may provide for comprehensive general liability coverage (for damages caused to other persons in the form of personal injuries and property loss) and separate coverage for damage to property owned by the insured. Remember that comprehensive general liability coverage alone does not offer protection for damage to property owned by the insured. Property insurance must be included in the policy for the insured's property to be covered.

Advocis Broker Services | 390 Queens Quay West, Suite 210, Toronto, ON M5V 3A2 | (416) 646-9888
(877) 646-9888