Group Health Insurance

One of the benefits of working for a company is group health insurance. Such insurance is purchased by an employer and offered to the employees. Frequently, this group health coverage is also offered to immediate family members of the employee.

The employer usually pays a significant portion of the premium for its employees coverage in the group health plan, and the employee then pays the difference, generally as an automatic deduction from the employee’s paycheck.

Group health insurance policies and coverage vary from state to state because the insurance industry is regulated by the individual state.

Laws about how coverage can be issued to large groups are different than laws regarding the same coverage for small groups, and the way that premium rates are determined is also different. The requirements for sole proprietors purchasing health insurance coverage also vary on a state-by-state basis.

As of right now, businesses are not required to offer group health insurance. Individual insurance companies apply their own set of underwriting rules based on the number of employees and other factors. State and federal laws apply to varying degrees. These are based on factors including the number of employees, the type of business and whether an insurance company is providing the coverage.

One benefit of the group health insurance is the requirement known as guaranteed issue.  The federal HIPAA law mandates that no matter what pre-existing health conditions small employer group members may have, no small employer or an individual employee can be turned down by an insurance company for group coverage.  Some states and policies may have an exclusionary period for coverage of a pre-existing condition of generally six to twelve months.

In the majority of states, the law allows small group health insurance companies the leeway to determine their initial premium rates for each company using a process known as medical underwriting.

The remaining states make small group health insurance companies use processes known as community rating or modified community rating to come up with initial rates.  Additionally, coverage options and variables will also be a factor in determining the cost for the group health insurance policy.

You would do well to check with your state department of insurance for specifics in your area.

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Reducing Business Insurance Costs

While we would never recommend reducing coverage which is necessary to protect your business, we do have some pointers on how to keep such costs down.

Whether you own a taxi company, bed & breakfast, or a daycare center, you are likely to be experiencing a financial squeeze in this economy. You will want to sit down with your licensed insurance professional and ask for recommendations to help you to reduce your premium expense without increasing your risk.

You will likely want to search for duplicate coverage, and then eliminate one or the other from your policies. Such duplications are frequently found in liability coverages that your business already has in place. Your professional liability policy may overlap some protection with your general liability coverage.

With the help of your licensed insurance professional, you will be able to determine if one or another can be excluded, thereby helping you to reduce your premiums.

A realistic scrutinization of the coverage limits you have on your liability should help you figure out if some of them are higher than you need. If that is the case, a look at raising your deductibles might be in order. If your business has grown, you might be able to afford more out-of-pocket costs before you have the insurance cover any losses.

Frequently overlooked are possible reductions to workers comp premiums. Many, if not most, workers compensation carriers reward safety and planning by implementing a reduction in the cost of such insurance. Ask your licensed professional if your carrier would consider reductions in premiums by implementing various risk management and safety programs.

If so, you should look to developing a safety program with the carrier. Better educated and safety conscious employees are a plus for them and for your business.

Ask specifically for the company’s recommendations after a walk-through by the carrier’s representative. You may also want to consider offering fire safety and hazmat training to your employees to further reduce your premiums.

Consult your licensed insurance professional for guidance and advice about such of programs and work with that professional in order to locate a carrier which will offer discounts for using these programs.

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Liability Insurance and Your Business

General liability insurance will help to keep the doors of the business open and operating in the event of lawsuit and judgment against your business. Allow your licensed insurance professional to be your guide as you work toward determining the appropriate amount of insurance and type of coverage needed for your business.

General liability, property insurance, and workers compensation coverage are all necessary to any business, whether it is just starting up or already operational.

In this day and age, where businesses are sued on regular basis, even a small mishap could easily result in a lawsuit.

General liability insurance protects the business and its assets in a scenario wherein it is sued for claims of bodily injury or damages and will generally cover the costs of defending and litigating a claim brought against the company.

Such coverage will pay any compensatory awards or actual damages which the business is obligated to pay up to the coverage limits; however, general liability insurance will not cover punitive damages, due to the fact that those damages are considered a result of intent.

Amounts of coverage amount necessary are determined by a variety of factors, including the type of business, the general area where the business is located, and types of equipment included.

Such coverage will usually specify a maximum paid per time period as well as a maximum per occurrence.

For instance, if a business has a policy which offers $1 million per occurrence, and the business received a $1.25 million judgment against it, the insurance would cover $1 million of the judgment, leaving the business would be responsible for the $250,000 which remains.

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As always, you will need to work with your licensed insurance professional in order to determine how much and what types of coverage you need.

Lawyers and Insurance

We are frequently asked about what insurances are needed for specific types of businesses. To such questions, we respond that there are commercial insurance products for almost all businesses!

Every business, no matter what product or service it provides, needs to be protected, along with the owner, board, and officers.

All businesses, except for those in Texas, are required to carry workers compensation. And while it is not legally required in that state, it still makes sense for those businesses to avail themselves of such coverage. All businesses need to carry a general liability policy as well as property and casualty insurance.

Frequently, a Business Owner’s Policy, also known as a BOP, will cover both.

Property and casualty insurance protects a business’s office, fixtures, inventory, furniture, and equipment. Vehicle coverage may be included or a separate policy but falls under the “P & C” heading. We’ll cover more about vehicle insurance in a moment. Overall, this policy will cover these items whether damaged, stolen, or perhaps even lost.

The general liability policy covers the business owner as well as other people who are involved in the business. Typically, this policy covers legal costs associated with lawsuits including settlements and judgments. This policy will cover damages to a third party and also bodily injury.

Now, specific to the attorney, it is important to determine with your insurance professional whether a Professional Liability policy or Errors and Omissions (E&O) insurance is necessary. E&O insurance is additional coverage not covered in the general liability policy. Attorneys, accountants, and engineers would all be wise to avail themselves of this additional coverage, as it offers a far greater and more specific liability coverage.

Review the specifics of your business with your licensed insurance professional. Together, you will be able to determine the proper coverage necessary to reduce the risk exposure of your business.

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