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“Insurance 101 ”. Small Business Insurance as one piece of your Business Contingency Plan. Business Insurance 101. Key Objectives: Understanding your risks Protecting your assets. You Don’t Have To Be A Statistic. One of every Five businesses experiences a major disruption each year. - PowerPoint PPT Presentation
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““Insurance 101Insurance 101””
Small Business Insurance as one piece of your Business Contingency Plan
Business Insurance 101Business Insurance 101
Key Objectives:
Understanding your risks
Protecting your assets
You Don’t Have To Be A StatisticYou Don’t Have To Be A Statistic
One of every Five businesses experiences a major disruption each year.
Small business owners have a higher probability of being impacted by a disaster.
Small business owners have fewer recovery resources and a lower tolerance for losses. (Compared to BIG Business)
According to NAMIC 60% of Businesses do not fully recover after a Business Interruption of 3 months or more
As many as 90% of small businesses do not have a business continuity plan in place.
Business Interruption Claims from Hurricane Katrina cost Insurance Companies between $5 and $9 Billion Dollars* * Towers Watson 2005 Report Hurricane Katrina: Analysis of the Impact on the Insurance Industry
Basic Property & Liability Basic Property & Liability ExposuresExposures
Damage to property (building, contents)
Loss of revenue Loss of Income Extra Expense
Theft (General, Employee)
Liability arising from business operation (ex: customer slips/falls)
Standard Business Owner’s Standard Business Owner’s PolicyPolicy
Section I• Property• Loss of Income
Section II• CGL Liability• Medical Payments
Business Owner’s Policy – Business Owner’s Policy – Typical Built-insTypical Built-ins
Buildings – for owners. Includes permanently attached equipment
Contents – Furniture, equipment, supplies, inventory (Business Personal Property)
Tenant improvements and betterments – for Tenants
SignsLoss of Income (Incredibly Important!)Liability
Business Owner’s Policy – Business Owner’s Policy – Other OptionsOther Options
Money (on and off premises)Computer Property Temperature changeEmployee DishonestyIncreased Liability LimitsMechanical Breakdown Coverage
Workers CompensationWorkers Compensation
Coverage• Part A – Statutory limits• Part B – Employer’s liability
• Rarely used• Must waive Part A Settlement and sue in court
(BI by accident/by disease/policy limit) Premium
• Estimated Payroll• Employees• Owners
Annual Audit• Premium Adjustment
Small Business Relationship ManagementSmall Business Relationship Management
Business Policy Business Auto
ENOL
Business Continuity Planning
Business Life
Retirement PlansCommercial
UmbrellaBondsSpecialty Products
Bank Products
Mutual Funds
Disability
Workers' Compensation
Inland Marine
Business Planning & Business Planning & ContinuationContinuation
Business Life Insurance• Key person Life Insurance• Group Life Insurance• Buy/sell agreements
Business Retirement PlansHealth Savings AccountLong-Term Care Insurance
Why Plan?Why Plan?• Business viewpoint
◦ Protect assets and investment◦ Remain competitive/preserve reputation◦ Process Improvement
• Insurance viewpoint◦ Reduce property damage◦ Reduce down time and expedite recovery◦ Insurability◦ Due diligence – obligation to inform/annual
review• Community viewpoint
– Preserve jobs/contribute to tax base• It’s is outlined, encouraged and
supported by Federal Legislation– Public Law 110-53 Title IX, Section 24– Signed into law August 2007– Section 524 encourages voluntary
accreditation & Certification– PS Prep
You Can Survive a DisasterYou Can Survive a Disaster
Comments – Questions – Follow up
David M. Hall, CPCU, ALCM
Section Manager for Innovation and Small Business Solutions, State Farm Companies
Disaster Resistant Business Council ChairStephenson Disaster Management Institute Senior Fellow
CPCU Interest Group Governor
