How to Lower Your Property Insurance Costs

How Much Business Auto Insurance Does My Company Need?
You probably realize you need insurance on your business vehicles. What you may not know, however, is what commercial auto insurance covers, what vehicles need coverage, and how much insurance you’re actually going to need. To help, here’s a quick overview of commercial vehicle insurance:

What it covers: A business auto policy provides coverage for physical damage and liability costs incurred in an accident involving a company vehicle. This includes the cars, trucks, trailers, vans, and other vehicles used on public roads that your business owns, hires, or leases for business purposes.

When it’s needed: Keep in mind that your personal auto policy may provide some coverage for business use of a vehicle, but if a vehicle is primarily used for business purposes, a separate commercial policy is required. Also, basic business owner’s policies (BOPs) do not include coverage for vehicles. So, if you use vehicles in your business, you should have a commercial auto insurance policy. If you’re unsure whether a vehicle qualifies, you should discuss it with your commercial insurance agent.

How much is required: The fact is you probably need a commercial auto policy. But it’s not always easy to decide how much business auto coverage to get. The rule of thumb is that all businesses should carry a minimum of $500,000, but most companies opt to carry $1,000,000.

Consult with your agent on your individual business needs. By asking detailed questions about your needs and vehicle usage, he or she can determine exactly what type of coverage is best for you.

What is the Cloud?

Everyone uses cloud computing, but not everyone gets it. Simply put, whether you’re searching online, creating documents with web-based software, or accessing a web-based e-mail account, you’re using the cloud.

Cloud computing means that the infrastructure enabling your web tasks is accessed via the Internet. The processing, storing, and filtering of information is done through a server that may be thousands of miles away or just next door. And as this activity happens seamlessly and invisibly, it seems to be happening “in a cloud.”

The pros of cloud computing are many. With cloud services, you eliminate the up-front capital cost of computers and peripherals, as well as the need to buy and maintain software licenses. Others have to worry about virus attacks, and you don’t have to back up files. Plus it’s quick and easy to add applications and purge those no longer needed.

But convenience has a downside. Up-front capital savings will likely become ongoing operating costs. And with cloud services, you may be limited to off-the-shelf solutions rather than tools designed for your specific needs. As well, suppliers may stop supporting a product you depend on, and there are privacy and security issues that arise because your data is on someone else’s system in an unknown location.

The search for a “better” cloud has been under way for many years. Edge computing, which brings the processing of data closer to home, is one alternative. And there will be more: these days the cloud – or something like it – has become virtually indispensable.

Commuting: Getting There’s Not Half the Fun. But We Do It

Despite the advent of the mobile work-anywhere-anytime economy, computers and smartphones have not yet replaced brick-and-mortar offices.

According to a Pacific Standard article recently reprinted in CityLab, “the vast majority of us still travel to work most days: only about 2.8% of the total workforce says they work from home ‘at least half the time.'”

Since 1980, when the Census Bureau began keeping track, commuting time for the average American worker has increased by roughly 20%. A typical worker now spends over 26 minutes commuting each way, and some spend more than an hour and a half a day. In areas such as New York or Los Angeles, “extreme commuters” may travel two or more hours each way, often journeying by car, train, ferry, bus, bicycles, and/or foot in the same trip.

When asked, most people say they hate commuting. It’s unproductive, unpaid time. It’s costly, it’s environmentally unsound, and it wastes gasoline. Plus, it’s stressful. Commuting is associated with high rates of anxiety, depression, obesity, cardiovascular disease, and other maladies.

Workers would prefer to work from home.

So, why do we still commute? The reality is that for many companies, technology is not a good substitute for face-to-face interaction. Existing technologies such as e-mail, instant messaging, and even Skype just don’t convey information efficiently or get across nonverbal cues like body language, facial expressions, and eye movements. Especially in group meetings.

The solution, some believe, may lie in virtual reality (VR). In a Pacific Standardarticle, Jeremy Bailenson, head of Stanford’s Virtual Human Interaction Lab, suggests that test subjects seem as comfortable dealing with avatars as with a flesh-and-blood person.

The upshot: VR may soon spell the end of the unhappy commuter.

How to Lower Your Property Insurance Costs
Property ownership is a significant investment. The purchase price is only the beginning: maintenance, repairs, and property taxes add to the price of owning a commercial building – as does obtaining the proper insurance coverage to keep your investment safe.

Insurance coverage can influence where to locate a building, what upgrades to install, and how the building is constructed. At least, it should. Many property owners don’t realize how much these factors can affect property insurance rates. To save on insurance, owners should understand what influences property rates and what to do to reduce their insurance costs.

Following are seven factors to keep in mind. As you consider investing in a new building or research insurance options for a current property, ask yourself:

How old is the building? Older buildings typically cost more to insure, as they’re more susceptible to damage from issues such as old wiring or worn structural components. Additionally, if a building must be brought up to code, this can translate into costly repairs. All of these factors will drive up the premium.

What type of equipment does it house? If your building is home to older equipment that is harder to maintain and repair, this will increase your insurance costs. However, you should weigh the pros and cons of paying this rate and keeping the equipment you have versus investing in new equipment, which may be even costlier. The type of equipment is also a factor, since heavy industrial machinery is typically more expensive to insure than office equipment.

Where is the building located? Buildings in low-crime areas are generally cheaper to insure than those in high-crime neighborhoods. Also, locating in areas prone to natural disasters, such as hurricanes or tornados, will also affect insurance rates. Choosing an investment property in a safe area will save on premiums.

What security is in place? A building that is well-protected from vandalism and theft generally earns lower premiums. If your building offers low-security measures, consider investing in a better system that will help you save on insurance costs.

How much space do I really need? If you rent a small space for your business, your insurance policy will cost less than one for a large office or factory. Consider how much space you realistically need in your operations. Unnecessary space raises insurance premiums and property taxes.

Do I want replacement value or actual cash value coverage? Too often, property owners overlook this distinction. Replacement value pays what you need to replace the damaged goods with brand-new items. Cash value pays what your depreciated property is worth. Logically, replacement-value coverage costs more, so you must determine if this coverage is worth the higher premium.

Can I combine my coverage? A business owner’s policy (BOP) may offer potential savings. This combines your coverage for property insurance with other types of business insurance coverage. The bundle is designed to provide adequate coverage plus savings for business owners. Consult with your insurance agent to review the options for your business.

February 26th, 2018 by Lightship Insurance