One piece of advice Sir Richard Branson offers entrepreneurs is to protect their downside. In an article in Entrepreneur he said,
“Always protect the downside. I think it should be a guideline for every entrepreneur — or anyone involved in business ventures.”
Insurance certainly qualifies as one way to protect your downside. If something goes wrong in your business – it burns down or is struck by a hurricane – you may face overwhelming costs. If you don’t have any insurance, you could even go out of business. Although the likelihood of something going wrong is small, the cost of something going wrong could be large. Without insurance, you face the risks alone; with insurance, the insurance company covers the costs.
Basics of Insurance
Insurance can sometimes appears to be a complex subject – because there are many types of insurance, exhaustive lists about what is and what is not covered by each form of insurance, and many choices when it comes to payment options and coverage. However, the basics of insurance are simple. As a business owner, you pay a premium, an agreed upon sum of money to an insurance company. Should something adverse happen, an accident that is covered by your insurance policy, the insurance company will either pay you for the cost of repairs or replace the damaged item.
For instance, if you had a small business in the construction industry, liability insurance would cover your business if one of your workers damaged a client’s property and your business was sued, or if one of your trucks broke down. The insurance company would take care of the costs. Without it, you might not have been able to pay for the unexpected disasters.
As a business owner, you probably need some insurance, but you have to be clear about what you need. Different businesses need different kinds of insurance. Unless you are clear about why you need insurance, you will either buy too much or too little.
Ultimately, you have to decide between one of two things: the cost of paying for an accident vs. the cost of buying insurance.
Three Questions to Ask
What is it that you need to insure and what are the chances of it happening?
If your business burned down, your company’s machines or equipment broke down, or you were sued by a customer, could you afford to pay for it out of your own pocket? While the chances of these happening are slim, is it worth taking the risk of having no coverage?
What are the worst case scenarios in your business and could some of the downside be covered by insurance?
Although it may seem needlessly pessimistic to think about the worst that could happen, it is better to lean on the side of realism rather than hold on to a nae optimism that nothing bad could possibly happen to your business.
How much money do you have right now to cover a disaster should it occur?
If your business has considerable capital and is making a nice, steady profit, you may not need insurance. However, If your company might go out of business if you could not afford to pay for an accident, then you may seriously have to consider getting insurance.
While you may have to get insurance to comply with federal or state laws, this may not be enough to cover your business’s worst case scenarios. While getting sufficient insurance is a cost, you have to decide whether the cost of getting insurance is less than the cost of paying for a lawsuit or an accident.
Is Your Disability Covered? Know Your State WCL
Disabled workers often face a set of challenges which their colleagues may not even be able to comprehend, much less empathize with.
Even when they work with an employer who provides them with the support they need to do their job to the best of their ability despite their disabilities be they visible or invisible.
Even though all employees have the right to employment without being discriminated against on the basis of disability, they may not have the same provision in place if they leave their home state to pursue a job elsewhere.
Different states have different rules and while you have federal protection against discrimination, some different states have subtly different attitudes towards individual disabilities especially when it comes to workers’ compensation.
Whether you have an existing disability or want to ensure that you’ll have the right to receive workers’ compensation if you suffer a debilitating injury at work it’s worth familiarizing yourself with the disparity between states (and even between organizations).
Workers’ comp is mandatory in all US states… except one!
You could be forgiven for assuming that workers’ compensation is a right for employees in all 50 states and while it is mandatory in most it is not mandatory in Texas.
Of course, that does not mean that a Texan employer will not necessarily award workers’ compensation to their employees, nor does it necessarily mean that an employer’s workers’ comp provision will cover your work-related disability outside of Texas.
This is because different employers have different forms of insurance and thus there may be a disparity between local law and employer policy.
It’s highly likely that an employer in Texas will have a worker’s comp provision in place, but employees will have the option to opt out of it. These people are referred to as “nonsubscribers”.
Where policy meets insurance
Even in states where workers’ comp is mandatory it is not entirely state run. In many cases worker’s comp provision is a combination of state legislature and private insurance policies.
The only states that rely on entirely state-run programs for workers’ compensation are North Dakota, Ohio, Washington, and Wyoming.
Businesses can purchase insurance for compulsory and non compulsory components meaning that two employers in the same state may offer different workers’ comp provisions which cover a different range of disabilities.
Workers’ comp: Know where you stand
As you can see, it’s important to know where you stand in terms of workers’ comp. Read this article by Terry Katz & Associates: what disabilities covered under workers comp laws. There are two ways in which you can (and should) check this out further.
Check employer’s obligations
First, you should check your employer’s (or prospective employer’s) legal obligations by familiarizing yourself with your new state’s workers’ comp laws (WCL). This will outline the bare minimum that your employer is entitled to offer.
However, their insurance provision may be in excess of this legal minimum so even if you have an existing disability that is not covered by local WCL this does not necessarily mean that it’s not covered by your employer.
Ask what disabilities are covered
This is why you should know exactly where you stand with your employer before you join the company. Ask what specific disabilities are covered by their workers’ comp insurance policy. This may be in their employee handbook or their Human Resources department may be able to help.
Reasons Your Business Will Need To Add Vehicles To Its Fleet
Running a fleet of vehicles in your business is costly exercise, so it’s wise to keep up with developments in vehicle technology, and other areas like financing and tax obligations.
Reducing costs and boosting business productivity is a driving force of change so when is it a good time to add more vehicles or change out the vehicles you’re currently running?
We have some of the reasons right here.
Why Your Business May Add Or Change Its Vehicles
Growth in staff who will need company vehicles
This is a pretty simple and obvious reason to add to your company’s tally of vehicles. As more and more people join your company, you might find that they need to embark on commercial travel as part of their job.
What you need to consider is what type of vehicle will be service their requirements in their role for your business, plus how your business should fund the purchase. There’s also the tax implications to consider too, which will vary depending on where your business resides. Contact your professional advisors and also do some research online on both tax requirements and funding options.
The Telegraph in their article identifies how businesses can choose vans and the financing options including leasing finance.
Your business needs a new type of vehicle
You should take into account not only the number of your workers who might need commercial vehicles at any particular time but also how exactly they would want to use those vehicles.
Fleet News notes that many firms adhere to an “open choice” policy, whereby employees are free to choose the make of car they would like. Don’t just consider the brands, though, but also the colours – some aren’t always business-friendly – and the seating capacity in case you want to transport clients.
To save on running costs and boost productivity
You might already be aware of the eco-friendly benefits of switching from a gas-guzzling vehicle to an electric one. Naturally, these benefits hold true in the business world, too. However, all the same, remember not to insist on such vehicles if there would be worrying practicality trade-offs.
For example, a driver who does over 20,000 miles annually might not find a purely electric vehicle cost-effective. Also, keep in mind that setting a CO2 cap can be a worthwhile alternative green measure.
However most businesses reliant on large vehicles in their fleet have their eye on the advancements in autonomous vehicles like large trucks and vans says better wise insurance. They are keen to find the best prices for fleet insurance and save on costs and boost productivity.
Your business wants to trim its tax obligations
This is another strong reason to consider investing in green tech for your fleet. You might not have realised how much you could save on van tax from switching to a zero-emissions vehicle. Various Government initiatives have ensured this for UK drivers.
Whereas, in the UK, most new small and medium vans attract a universal tax rate of £250 yearly, no annual road tax applies for electric vans. The tax savings could enable you to polish up other aspects of the business.
Get the best deal for your business
When sourcing insurance for multiple vehicles in a single fleet, it’s possible to save money. Check with your broker so you get the best deal by paying less for each extra vehicle you add to the policy.
How Workers’ Compensation Insurance Protects Businesses
Whatever your size from startup, to small business to large corporate, as a business owner, or CEO your many responsibilities include protecting the company against lawsuits and that includes litigious employees.
Workers’ compensation insurance is for the employee. It provides support with wage replacement and medical benefits when employees are injured at work. There’s a more detailed account of workers compensation explained here.
Although workers’ compensation is technically designed to protect workers, it also provides protection for businesses. It can shield your business from lawsuits filed by employees who claim that you or an employee you hired caused an on-the-job injury and also fines.
Protects The Business From Fines
For starters, it protects you from fines. All states, with the exception of Texas, require businesses to have workers’ compensation insurance.
If an employer fails to obtain Workers’ Compensation insurance, they are subject to administrative fines and potential criminal liability and premium penalties and may be ordered to close business until insurance has been obtained and will be held financially responsible for all costs arising from a work-related injury.
The quote above is from Jason D. Mills & Associates
With adequate workers’ compensation insurance cover your business can also be protected in other ways let’s look at a couple of them.
Limits Legal and Financial Liability – Work-Related Injury or Illness
Employees get extensive cover including: medical care for illnesses or injuries; vocational training, income replacement, funeral expenses and death benefits if the employee is killed on the job; and in return employees are prohibited from suing employers for on-the-job injuries, except for cases of gross negligence that leads to an employee’s death.
When your business has the right level of cover, it’s not liable for:
- Medical costs
- Lost wages
- Fines for not having coverage
- Damages incurred by the employee, which may include pain and suffering, punitive damages and loss of life enjoyment
Gets Employees Back to Work
Workers’ compensation ensures that workers receive the medical care and rehabilitation they need to get back to work.
Thus when an injured employee’s needs are met, they are more likely to remain in the job and with the company so it’s a win win for all parties.
An absent worker no doubt puts more pressure on everyone in the business, especially if it’s a small business. Ideally a temporary hire can fulfil the role in the interim.
Implementing an effective transition program, is also wise as it will speed up the the injured employee’s return to work while ensuring they are able to handle all their tasks safely.
With adequate workers’ compensation insurance, employees have the security and peace of mind that they will be taken care of if they are injured on the job.
For businesses irrespective of size, having the right level of coverage is professional and it shows that you are a responsible employer who cares about your employees.
Not all states in USA make the cover mandatory so if your business is located in a state that doesn’t require it,
your business will be attractive to new staff hires and secure employee loyalty.
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