Rethinking the What, Where and When of Work, and Commercial Auto Insurance

When do You Need Commercial Auto Insurance?

Commercial auto insurance or personal auto insurance? That is the question. How do you know which you need, and what defines a commercial vehicle?

Auto insurance carriers have specific guidelines that distinguish personal vehicles from commercial vehicles, but these lines blur when it comes to issues such as telecommuting.

If you’re driving your vehicle to and from work, you don’t need commercial coverage. However, if you use it in your job, or if you’re self-employed and use it for business, you’ll probably need a commercial policy – especially if you have passengers.

You definitely need commercial coverage if you transport people, products, food, or other goods; or if employees drive your vehicle. If you own a business, and a vehicle is in your business’ name, you’ll need commercial coverage, regardless of how often or how it’s used.

Be forewarned: If you list a commercially used vehicle on your personal auto policy, your insurer won’t pay the claim. This leaves you responsible for all accident-related expenses such as medical costs and property damage.

It’s also not uncommon to see claims and lawsuits skyrocket when people realize the involved vehicle is a commercial one. Without coverage this could cost you your business, and your home and other assets.

Commercial auto insurance isn’t that much more expensive than personal insurance, especially if usage is limited and you don’t transport people. But it’s worth the peace of mind, even if you never need to file a claim.

Subtract and Conquer: Remove Barriers to Success

You’re there. You’ve survived the headwinds and added technology, staff, new customers, and maybe a new location. Now it’s time for the next stage: improving your operations by removing obstacles to success.

The key to accomplishing this is by subtracting rather than adding. That means identifying and eliminating two factors that have been obstructing production: activities that produce a low return; and problem customers.

Lose low-return activities

To reduce those tasks that take time and energy yet yield minimal results, make a short list of key executive functions. Ask yourself what activities are absolutely necessary to deliver the products or services your customers demand, and what can be safely eliminated.

You’ll find that many should be delegated, outsourced, automated or simply discarded. By working on truly vital activities, you’ll have time for long-term planning.

Dump problem customers

Every business has some customers you just can’t satisfy, as well as good ones who deserve more attention. To focus on the latter, get rid of the former.

This strategy may seem financially risky, but, in fact, you’ll likely come out ahead by ridding yourself of customers who suck up more time than they’re worth.

Concentrate on the customers who genuinely value doing business with you. You’ll have more energy to address them – and attract others like them – after dumping your problem customers.

It’s taken effort and resources for you to reach this stage. Now it’s time to be ruthless and direct your energy to where it will do the most good.

Rethinking the What, Where and When of Work

Co-working is not just for startups and freelancers anymore.

Co-working started out as a way for freelancers, solopreneurs, and independent contractors to relieve the isolation and avoid the distractions of working from home by sharing working space with other kindred spirits. The benefits of working in a supportive environment of like-minded professionals soon became apparent.

In its global co-working survey, published in late 2013,  reported that:

  • 71 percent of respondents reported a boost in creativity after joining a co-working community;
  • 62 percent said the quality of their work was better in a co-working space;
  • almost 90 percent of co-workers reported higher self-confidence;
  • 70 percent of co-workers reported feeling healthier than they did in a traditional office setting.

One of the greatest benefits of working in a curated work space surrounded by talented people is that it enables creative collaboration and collective problem solving. Co-working communities often host meetups and skill-sharing events, and offer many opportunities for impromptu whiteboard and brainstorming sessions.

In addition to synergies, co-working sites offer flexibility: Large companies, even multinational organizations such as Google, Amazon and Twitter, use co-working locations to hold meetings and as temporary touch-downs for traveling executives. In the wake of Hurricane Sandy, many offices without power turned to powered co-working spaces nearby to maintain their productivity.

More and more employers are realizing they need to provide access to a range of workplaces to accommodate a diverse workforce. They’re rethinking the evolving definition of what constitutes work, as well as when and where work takes place.

Should You Buy a “Claims-Made” Insurance Policy?

One of the most important things to understand about commercial insurance policies is what’s called “claims-made policies.” If you own a business, you need to understand this, because if you don’t, it could cost you everything.

When you purchase standard business insurance such as professional liability coverage, you’ll likely be offered two options: a claims-made policy and an occurrence policy. The online definition of occurrence policy is: “Insurance that pays claims arising out of incidents that occur during the policy term, even if they are filed many years later.”

Claims-made policies

Most standard commercial policies are claims-made policies. Although there are many variations, Claims Made and Reported policies are most common. These policies sound simple – they pay for claims made during the time you hold your policy – but it can get more complicated: It hinges on the time period in which your policy is active.

Businesses can be sued long after they’ve finished work – and after insurance policies have been canceled.

And that’s the issue: If, for example, the materials used in your products were identified as being dangerous, or the structure your company erected turned out to be constructed in a way that pointed to negligence – and this didn’t happen until years after the work was done – you can still be sued.

Policy must be active at two points

Although your policy would cover claims just like any kind of insurance policy would, there’s a common misunderstanding. In order for a claims-made policy to cover things you’re liable for, either because of negligence or because of the use of faulty or dangerous materials, your policy needs to be active at two points:

  • when the claim is reported to your insurer, and
  • when you performed the work.

For example, say you owned a computer repair shop from 2009 to 2011. You buy a claims-made policy we’ll call Policy A. This business insurance policy is active from 2009 to 2011, and then you cancel it, either because you’re changing businesses, closing down, or purchasing a new claims-made policy.

Six months after you’ve closed down or moved on, a claim is filed against you for using defective/damaged parts during the time you were covered by Policy A (from 2009 to 2011). Unfortunately for you, in this instance, your claim won’t be covered.

All too often, a policyholder assumes Policy A would cover claims stemming from work done while insured under Policy A, even if they no longer have the policy.

It wouldn’t, though; you, the policyholder, have to meet both the aforementioned requirements for claims to be covered under Policy A.

Because Policy A is now cancelled, it’s not going to cover claims arising from work you did while insured under it.

The chance of this happening depends on the type of work you do, so take that into consideration. And although you may subscribe to the adage, “never look back,” many claimants do.

Talk with your insurance agent to find out whether a claims-made policy is right for your business.