Month: January 2015

Rebalancing High New Worth Insurance: Stop Paying Too Much for Too Little

Written By Charlotte Insurance on January 26, 2015. It has 0 comments.

Too often, high net worth families in Charlotte and the surrounding areas, don’t realize that their personal insurance requires a bit more scrutiny than the average person’s does. The wealthy have more opportunities for savings and frequently miss them by over insuring in the wrong areas. They also tend to put their hard-earned wealth at unnecessary risk by under insuring where it really counts. The Private Client Group at Charlotte Insurance is dedicated helping wealthy individuals fix these inequities by rebalancing their high net worth insurance portfolios. In many cases, we accomplish this with only small increases in overall cost — or with no increase at all.

Where Many Agents Fail

Agents not experienced in high net worth insurance tend to treat the very wealthy like everyone else. Plus, hard-working individuals who have amassed wealth tend to carry the same humility they had when they started their journeys of success. This blinds them to the fact that they aren’t like everyone else anymore. The insurance they carried 10 years ago simply isn’t designed for their current level of wealth.

This isn’t about “special treatment” in the ethical sense, but about the additional options and coverage needs that wealth brings to an insurance program. When you can afford a high deductible in exchange for sharply reduced premiums, it simply makes sense to do it. But agents don’t ask that question when the average client lives paycheck to paycheck, always choosing the lowest deductible possible. It just doesn’t cross their minds that your situation may be different.

Agents that Specialize in High Net Worth Insurance

Individuals working with the average personal lines insurance agent may find that they can afford a 5,000 deductible, yet drive with $500 deductibles, paying hundreds more than necessary every year. With an expensive home, the savings offered by a high deductible are even greater. Considering home ownership is a long-term commitment, saving $900 a year by choosing a high deductible can create substantial value.

Special discounts can also be overlooked. Expensive homes often have security systems, but that’s not the case with an average homeowner. Agents who fail to ask about such features leave wealthy individuals paying more than necessary for their homeowner’s insurance.

Another common mistake lies in considering the type of property a wealthy individual may need to insure or how the property’s value may change dramatically over time. A homeowner’s policy offers limited personal property coverage, so collectibles, antiques and other expensive items are more properly insured under valuable items coverage. Specialty policies are also wise for high value vehicles and jewelry. For an art collection, specific fine arts coverage offers higher levels of insurance. An agent experienced in high net worth insurance will know to re-value fine art every few years to be certain coverage is sufficient.

Choosing the right type of coverage for high net worth families is vital. You may live in a large home or mansion that should be covered by homeowner’s insurance, but the condo you rent in the city needs a different policy. Specialists know that a renter’s policy won’t provide enough coverage for renovations to the interior of the rental. And if you rent your primary residence, a renter’s policy won’t provide full protection for your personal possessions.

Liability is an especially vulnerable area for the wealthy. Not only do they have more assets to protect, but they also are at greater risk of lawsuits. The deeper your pockets, the more likely another is to place a lawsuit. Having the highest available liability limits is vital to protecting your wealth.

And the wealthy often employ workers in their homes, which creates additional sources of liability. Some workers must be covered by workers’ compensation insurance. All workers should be covered under Employment Practices Liability Insurance to protect against suits from unhappy workers.

Rebalancing Your High Net Worth Insurance

An agent that specializes in high net worth insurance understands that insuring a financially secure family is akin to insuring a business. It requires a multi-pronged approach of risk management, guidance and mitigation to protect valuable assets.

By evaluating your high net worth insurance program, the Private Client Group uncovers savings you can then apply to properly insuring your valuable items and purchasing adequate liability insurance. We find gaps in coverage that could lead to devastating losses and discover redundant or unnecessary insurance you don’t need. The result is a well-rounded program that provides the most protection for the least cost.

Image courtesy of Flickr user Bob ~ Barely Time.

How Much Does Commercial Insurance Cost?

Written By Charlotte Insurance on January 21, 2015. It has 0 comments.

You’ve finally done it – become your own boss and started a business. You’re in charge of your future. Hard work, determination, and drive, mixed with great customer service and an amazing product or service, are all you’re going to need to succeed.

Actually, no, you need something more. You need protection for yourself and your business. You need insurance for your business.

Before you think of this as yet another expense, insurance protects you and your business. Depending on the type of business you operate, your insurance needs and costs will vary.

TYPES OF COMMERCIAL INSURANCE

For businesses that have multiple employees, products, and maybe even a few company vehicles, your insurance needs will vary from a consultant who works out of a coffee shop or a home office.

  • General Liability insurance protects your products and operations. Think of the customer who gets food poisoning in a restaurant or a shopper who slips and falls in a store.
  • Errors & Omissions, also known as E and O, is used mainly for anyone marketing themselves as an expert who offers consulting services. This insurance covers legal fees and defense costs. An example of a business who needs this insurance are real estate agents who may be sued by a buyer or seller in a transaction that doesn’t end well.
  • Commercial Auto insurance is needed if you have company vehicles that are operated by yourself or your employees.
  • Workers Compensation is required by law for any business with employees.
  • Employment Practices Liability is used for sexual harassment, discrimination, and hostile workplace claims, as well as claims of unfair employment practices.
  • Medical Malpractice is something to consider if your business sells or creates products that are regulated by the FDA.
  • Commercial Excess Liability, or an umbrella policy, is extra insurance to be used if you exceed the limits of your general liability or business auto insurance policies.
  • Cyber Theft insurance protects your business against cyber theft or fraudulent wire transfers against your business bank account.
  • Commercial Property insurance covers your building, personal property, office equipment, and inventory to name a few against loss or damage.
  • Data Breach insurance is ideal for businesses that house sensitive data about customers, clients, or employees. If a breach occurs, this insurance protects the business against loss.
  • Directors and Officers insurance is something to consider for companies with a Board of Directors to protect the members of the board against the actions they make that affect the profitability or operations of the company.

Lowering the Costs

The costs will vary depending on what type of business you operate, what kind of product or service you provide, and if you have any employees. One option for keeping your insurance costs low is to consider a Business Owner’s Policy (BOP) which is a bundled package of required or recommended coverage for a business. It often includes business interruption insurance, property insurance, vehicle coverage, and liability coverage. Bundling coverage in a BOP may qualify for discounts.

The best way to make sure you pay only what you should for your commercial insurance is to speak with a qualified, professional insurance agent. The agent will help you assess your business hazards, help you understand all your options and how each type of coverage works. Having the best information will help you make the most informed decision. An independent agent can also get estimates for you to help you make sure you get the best possible price.

When you’re ready to determine your business insurance needs and get the best coverage to protect you and your business, contact us. We’re here to help.

Fidelity Bonds vs Surety Bonds – What’s the Difference?

Written By Charlotte Insurance on January 5, 2015. It has 0 comments.

Surety bonds come in all different shapes and sizes, depending on your business needs, but they are designed to do one thing – protect everyone involved in a contract.

Most surety bonds protect the customer who hired you to complete a job. Others, like fidelity bonds, protect both the customer and your business. Charlotte Insurance understands the different types of surety bonds and can help you make a more informed decision for how best to protect your business and your customers.

Surety Bonds

A surety bond is a legal document guaranteeing the completion of a contract. It requires the person performing the job to pay a specific amount of money to a bond company in order to guarantee performance. You, as a business owner, may pay to give your customer peace of mind. Alternatively, you may require independent contractors or subcontractors who work for you to pay to guarantee the work that you hire them to do is completed properly.

Fidelity Bonds

Fidelity bonds are a type of surety bond designed to protect your business and your customers. Depending on the type of bond you purchase, you may be covered against specific types of loss:

  • Employee theft and dishonesty
  • Loss due to false or forged documents – these documents would have been used in good faith but caused a loss when the forgery was discovered.
  • Loss due to counterfeit or unauthorized instructions – forged signatures on checks, theft of customer information, unauthorized use of bank account information
  • General theft and fraud

In the case of fidelity bonds, the loss experienced affects both your customers and your business, both of whom must be protected. While there are specific limitations with fidelity bonds, they can give you, as a business owner, peace of mind.

Contractor and Construction Bonds

There are some bonds that only contractors will be required to carry or have the option of carrying.

  • Contractor License Bonds: These bonds may be known as “contractor bonds” and are often required by local governments to guarantee that local licensing laws are followed.
  • Construction Bonds: These bonds are typically called “contract bonds” which can include bid bonds, payment bonds, performance bonds, and maintenance bonds. There are also supply bonds, site improvement bonds, and subdivision bonds. The specific type of bond a contractor needs will depend on the project type and requirements.

Types of Construction Bonds

Many of the bonds available protect against very specific situations. The purchase of these bonds can be used to show your customers and clients that you take their job seriously and that you guarantee completion of the work to be done. Some bonds protect your business directly ensuring that you are paid for your work.

  • Bid Bonds: These bonds make sure that those who bid on a contract will enter into the agreement.
  • Payment Bonds: This type of bond makes sure that you are paid for the work you perform.
  • Performance Bonds: This bond guarantees that whatever is outlined in the contract will be completed correctly and properly.
  • Maintenance Bonds: This type of bond ensures that maintenance and warranty provisions within your contract are carried out to the letter.

There are many types of surety bonds available for businesses. Depending on the type of business you operate, you may need simple surety bonds to ensure the completion of a contract or you may need something more specific like a fidelity bond or construction bonds. Understanding the different types will help you make a more informed decision.

When you’re ready to discuss the details, give us a call. We can help you figure out what’s best for your company.

Understanding Fidelity Bonds

Written By Charlotte Insurance on January 2, 2015. It has 0 comments.

You’ve worked hard to build relationships with your clients and customers. You’ve got amazing employees who care about taking care of customers and seeing the business grow. But it only takes one bad apple to destroy everything you’ve built.

As careful as you may be when you hire new employees, there could easily come a time when you hire someone who is dishonest. Their theft of goods or their dishonesty could cost your customers money, time, and property. Wouldn’t you want to know your business is protected and can handle the costs created by the theft or dishonesty of someone you and your customers should have been able to trust? Fidelity bonds can help you do that, but first it helps to understand what they are, what they cover, and what they don’t cover.

What Fidelity Bonds Do Cover

Don’t forget that every bond is different. Some of the coverage options will vary.

Employee Theft and Dishonesty

There are a few things to remember with this type of coverage:

  • The theft or dishonesty can be completed by the employee alone or with help from others.
  • The act must be committed for financial gain outside of salary, bonuses, and other pay and with the intention to cause a loss to the business.
  • Any losses that occur after the initial theft or dishonesty are discovered could be excluded from the bond’s coverage.
  • If an employee is represented by a union, the policy could require the union to pay the costs incurred due to losses caused by dishonest employees.

Good Faith Reliance on False Documents

This type of coverage is fairly specific.

  • The false or forged documents can be certificated securities, deeds, mortgages, titles, securities of debt, and other documents.
  • The loss typically occurs when money is paid out or credit is extended based on the documents themselves.
  • Example: payment made for real property based on a forged title of ownership.

Relying on Counterfeit or Unauthorized Instructions

You may be familiar with losses due to counterfeit check payments or forged signatures on a check. Other situations are also covered.

  • In today’s world, electronic information including instructions is much more prevalent and may be covered by fidelity bonds.
  • Coverage may protect from loss due to stolen customer information on an e-commerce site.
  • It may also protect against loss due to theft of online banking information.

Theft or Fraud

While theft or fraud caused by a dishonest employee is a type of coverage offered by fidelity bonds, general theft and fraud may also be covered.

  • Loss of property, money, and records are typically covered.
  • The loss is typically due to robbery or burglary.
  • The loss may occur to a customer while on the business’s property.
  • The loss may also occur while the property, money, or records in question are in transit.

What Fidelity Bonds Do Not Cover

As with anything, there are some limitations and exclusions to fidelity bonds’ coverage. In most policies, the loss must occur as a direct result of a covered cause. There can be no secondary or intervening reason for the loss. Also, other than in the case of employee dishonesty or theft, the loss caused by errant employees who did not follow policy or made a mistake are typically not covered.

When you’re ready to protect your business, give careful consider to fidelity bonds. Contact Charlotte Insurance with your questions. We’re here to help.