Risk & Business

Every small business owner that has purchased commercial insurance will have to deal with insurance audits. Mostly these audits are on the liability and work comp policies. The purpose of these audits is for the insurance companies to charge the correct premium for the exposures. So if your business has sales and or payrolls that were greater than what was expected, the insurance company will charge you the difference. If they were less then expected,  the company will return the premium to you. There are a two "gotcha's" that every small business owner needs to be aware of to avoid having to pay a large additional premium after an audit. Lets go over these. If your business is experiencing a great year and sales and payrolls are growing, don't forget to let the insurance company know. You will be able to adjust your insurance policies to pay in  during the year to avoid a large premium bill at expiration. This strategy also allows for better cash flow as you are ma

Hartford, one of the largest small business insurers in the US just published a report about the most common and costliest claims to small business. The most common claim is theft and burglary. The most costliest is reputational harm. Lets discuss each one. According to the article the claims average for theft was around $8000. This would include employee theft,  which also is very common. Twenty percent of all small business owners experienced a theft in a 5 year analysis. Reputational claims affected 35% of the small businesses analyzed. These claims averaged up to $50,000. They would include libel, slander, and privacy breaches. The good news for small business owners is that insurance policies cover both of these risks. With proper insurance protection the most common and the most costliest, claims to small business will not cause you to go out of business. Until next time be careful out there and know your risks. G. Kevin Nemith  President of CNC Insurance Assoc. & The Sma