Bob Mazey and Lisa Harrah headshots along with their company logos and the sponsor's logo plus the program name and episode title

The Impact Of Insurance Market Cycles

The Impact Of Insurance Market Cycles

Lisa Harrah of Harrah & Associates, Inc. joins Bob Mazey of New Jersey Agents Alliance on his program “Insurance Insider” to talk about “What are Insurance Market Cycles?”.

Topics Include:

– How Are Insurance Companies Affected By Interest Rates?

– Personal Factors That Affect Insurance Rates

– How Does Reinsurance Work?

Listen to the full episode and comment with questions you have about insurance market cycles!

[00:00:04.550]

Hi, my name is Bob Mazey, I’m the president of the New Jersey Agents Alliance, and welcome to another edition in our ongoing series of key interviews with decision makers and leaders in the insurance industry. Today, I’m going to introduce you to Lisa Harrah, the vice president of Harrah & Associates, located in Hamilton, New Jersey, to talk with us a little bit more about insurance cycles, hard market cycles and soft market cycles and what those impacts may have on business insurance clients.

[00:00:31.610]

But before we start with Lisa, I just want to make a special shout out. And thanks to our friends at Merchants Insurance Group. Merchants Insurance Group has been very supportive with Alliance and the independent agency system in general in New Jersey, and we’re very thankful for their support of this series. So without further ado, I’d like to introduce you to Lisa Harrah from Harrah & Associates, who will talk to us a little bit more about hard and soft market cycles.

Hard Market Cycles vs Soft Market Cycles

[00:00:55.060]

Lisa, my first question is this. We hear a lot about hard and soft market cycles, but that seems to be an insurance term. Can you really talk about what a hard market cycle is versus a soft market cycle? What causes those changes in cycles and what that means to a consumer’s premium when they buy insurance? Not to oversimplify it, but a hard market simply means that prices are going up. A soft market, conversely, means that your premiums will go down.

How Do Interest Rates Affect the Cost of Insurance

[00:01:25.160]

So why does that happen? Does it happen because the insurance company feels they have an opportunity to perhaps exploit increased rates? Or are there other factors that go into that that consumers might have a better understanding of if you understand why things change? I understand that interest rates have an impact on this. How do interest rates assimilate to the cost of insurance? That’s a great question and it confuses a lot of people. Interest rates affect the cost of insurance dramatically because insurance companies invest, they’re limited in how they can invest their cash.

[00:02:03.830]

We’re a regulated industry, which is a great thing for the consumers. So the insurance companies have very limited access, as I said, to what they can do with their excess funds bonds. We all know bonds are so conservative. We all also know what the interest rates have been on fixed income securities. So that year after year after year is having a major impact on the insurance companies and their profit and their revenue that they bring into their bottom line.

[00:02:30.210]

Right. So in addition to making money on collecting more premiums than claims paid out, I guess what you’re saying is insurance companies are also taking those premiums as they collect them and investing those funds. And, you know, I have to agree that we are literally living in the lowest interest rate environment in history. So when the Fed is that close to zero and the best you’re going to do with a fixed income investment is three to four percent, that makes a lot of sense.

[00:03:02.840]

I remember the days when interest rates were 15, 16 percent. And I guess if the insurance companies earning a lot of money on the investment portfolio, they don’t need to charge so much on the retail cost to the consumer. Well, they can make some profit on that line. So there’s an underwriting profit than an overall profit. So if they can get more basis points on their investments, that can that can help with the underwriting profit. Gotcha.

[00:03:28.850]

And, you know, we’re coming out of a pandemic. We’ve had wildfires in the western part of the country, lots of sort of major natural disaster events, as well as social events that have caused a lot of claims. I imagine that when claims activity is up and interest rates are low, there’s an inflection point of the perfect who’s going to pay. Right? So so is that sort of one of the major reasons behind Routley? Absolutely. That’s a major issue.

[00:04:01.640]

And I guess when it’s coupled with the interest rate environment that we’re in, it’s a double whammy, if you will, for the insurance companies, because they can’t they can’t help offset the underwriting losses that they’re having because of the natural fire, the all the natural disasters and claims that we’re having. So it kind of puts them in a precarious situation where they don’t have a choice. Right. And the general public really probably doesn’t think about it because it’s not their industry.

[00:04:27.920]

And they hear even though interest rates are so low, overall investment environment has been very good, especially if you’re investing in tech and the little things that are a little more risky. The problem is the insurance companies can’t invest in those things, those assets, because, again, to protect the consumer so that when the claims come right, they’re going to have this surplus in the money to pay the claims. Right.

[00:04:48.980]

So in addition to some of the natural disasters we’ve had that are, you know, largely funded by the insurance industry, we also hear this term nowadays, at least in the insurance industry, called social inflation and. And the definition that we hear a lot is that the general average settlement or the average lawsuit now is much, much greater than it was this time 10 years ago or 20 years. Do you see that as well in practice or when someone has an auto accident or there’s an injury at a job site, people are just happy getting their medical bills paid and they don’t resort to litigation.

[00:05:28.470]

Feels to me like people are really resorting to litigation more often than next, particularly when you turn on the TV or, you know, go on the Internet. There’s, you know, plenty of law firms, I guess that will be glad to take your case to kind of make the claim a little bit bigger as we see it every day, every day. In fact, this morning I was reviewing a large account, getting ready for renewal and looking at the losses.

How Does Reinsurance Work?

[00:05:52.650]

It’s unbelievable. And they’re minor. They seem to be minor claims. But once somebody hires an attorney, everything just escalates. And the amount that the insurance companies are paying right now compared to, like you said ten years ago, is so it’s crazy. Absolutely crazy right now. Now, we also hear a lot about reinsurance. Can you talk a little bit about how reinsurance works in the insurance world? Because I think most consumers think that if they buy a policy from an insurance company, if there’s a claim, all of those dollars are going to come from that insurance company.

[00:06:31.170]

But that’s not actually how it works, is it? No, no, no, no. So insurance is founded on the spread of risk. That’s the whole idea about our industry. No different than consumers. We spread our risk out. We try to transfer risk. We buy insurance to try to save our assets. And insurance companies are the same. So what they’ll do is when they take when they underwrite or risk, depending upon how large the risk is, what the type of business it is, they will go to another reinsurance carrier to give them some of the risk so that if two million dollars, if they have a two million dollar building loss nationwide is not going to be stopped with the two dollars million building loss they’re going to, the reinsurance company may absorb 50 percent of that or 25 percent of that.

[00:07:14.430]

And sometimes there are multiple layers of reinsurance companies also. So that is another thing that affects overall pricing in that the reinsurance rates when they go up are the companies that I deal directly. I don’t deal with reinsurance carriers. I deal with retail, the retail insurance companies. So a company like Merchants, for example, they when they negotiate their reinsurance rates, that rate is a factor of what they’re negotiating with me. And neither them nor I have any control about that.

[00:07:47.170]

So that’s a fixed increase cost. Right. And we’re seeing insurance rates, reinsurance rates excuse me, heading north also. So that’s another factor in the overall hardening. So it seems like with any other manufacturer or distributor, insurance is no different because there’s other components to it. There is reinsurance costs, there’s litigation costs, there’s, you know, social inflation, things that they have to deal with. And I guess like any price of an ultimate product, it’s based on the sum of all the ingredients.

[00:08:21.090]

So that actually makes good sense. I think the public would probably appreciate knowing that they’re not the only people that have to buy insurance and learning that insurance companies have to buy insurance on their policies sort of makes sense of of spreading that risk among the globe, really, when you look at all the reinsurance companies. So that’s very, very interesting. So obviously, this is out of the client’s control. Absolutely. So these things happen and in a hard market where we have such things as lower interest rates and higher claims and such.

[00:09:00.540]

How do you prepare that customer for that? Because, you know, I know not everyone wants to pay more for insurance, but I think it it’s sort of indisputable that with the cost of lumber going up, home prices are going up with the cost of raw materials going up for automobiles, the cost of an automobile goes up. So I’m sure your business clients price their services based on their raw materials as well and cost of labor. So how do you prepare a client for that?

[00:09:30.960]

Do you talk to the client about that or is it simply, hey, your rates have gone up this year? Sorry, it feels like to me I would want to know more as a business owner. Yeah, absolutely. We that’s something that I take to heart very much because I try to always put myself in the position of my clients. And being a business owner myself, I would much rather know sooner than later. I’d also rather try to understand I don’t always understand everything, but when I can understand stuff, sometimes I can, you know, Rasht.

[00:10:03.050]

It just reason with it myself, communication is absolutely the key, and having a relationship with your clients and consumers should have the relationship with whoever their insurance broker or professional is that you can talk about things and not be so fearful of bringing up the elephant in the room. Nobody wants everybody wants to see their prices go down. And that’s just human nature. And unfortunately, we don’t have rabbits to pull out of hats, you know? So I find it’s better to educate and tell my clients sooner rather than later that the market is hardening so they can plan and incorporate those into their product.

[00:10:39.610]

Absolutely. And initially, I have to say, I was a little hesitant about doing it because I was concerned. If I tell them now that rates are going to go through the roof there, you know, maybe they really don’t trust me or maybe they’ll go out and look for another broker. But it’s really been beneficial. And I find I find that it works much better getting them the information sooner than later and just having open lines of communication and trying to explain to them why the rates are going up.

Personal Factors That Affect Insurance Rates

[00:11:05.740]

Right. So it seems like when these hard markets occur globally, if not nationally as well, insurance rates go up. And I suppose the better clients that have better claim experience or stronger safety programs might not feel so good about being plunged into a wholesale price increase across the board. So does the insurance. Do the insurance companies rather take individual risk characteristics into account when deciding whether or not to apply a small increase, a moderate increase or a high increase?

[00:11:45.310]

So I guess the question restated is, does the client have any control in their ultimate price or are they just simply a victim of whatever the insurance company comes out with? I would say that there is some control that the client can have for it and it’s being prepared and being ready. The agent that they choose to do business with, the broker that they choose to do business with, will also play a key part because that agent will be preparing them.

[00:12:17.020]

We see in the industry trends that come so before the market really, really hardened, we saw the trend of a hardening market approaching any you can see when you look at loss ratios, when you see when they’re just getting to the point where they’re not profitable, that, you know, something has to be done with the rates for the industry to be able to sustain itself. So having that information and educating your, again, communication is key. Educating your client helps them.

[00:12:44.320]

And it also helps. I found what we’ve done in the last couple of years is we’ve concentrated a lot more on risk management tools for our clients. We sent we have a portal where they can do driver safety, winter driving, warehouse safety and anything like that to help them be a better risk for the insurance company. And then ultimately, when we go to market, when the agent goes to market it, there should be an executive summary. There should be like you and I are having a conversation.

[00:13:12.160]

That’s what I try to do with my clients and and write down why they’re best in class. And that truly, truly does help. It also helps when there’s a good relationship I can get. Relationships are the key to everything. It also helps when the agent or the broker has a great relationship with the insurance carrier, when the insurance carrier and the underwriters respect them. And they know that if they say it’s green, it’s green, it’s not yellow with a little green, it’s green.

[00:13:38.620]

So that that’s one of the benefits about being a New Jersey Agents Alliance member because of our reputation and the quality of the people associated with us. It kind of it makes my job so much easier to be able to to be able to do the very best that I can for my clients, even if I’m bringing them an increase. I know at the end of the day that it’s the smallest increase that we could have possibly gotten for them.

[00:14:04.870]

Right. So so I guess in summary, what I’m hearing from you is, although let’s say the insurance industry needs to increase rates 10 percent or 20 percent or whatever the percentage is, if you were a better than average risk, you should expect a lower increase because your safety protocols, your loss experience, your claims have been better than then, let’s say, one of your competitors, as long as that’s communicated. So you could have the best you could do all these wonderful safety protocols yourself as a business owner.

[00:14:36.580]

And some businesses take it on their own. They don’t rely on their agent for it. Some of them are so that they’re passionate about that. But if that’s not communicated, if the if the agent doesn’t know about it or if it’s not communicated ultimately to the carriers, that’s not going to matter. So, yes.

[00:14:51.130]

So it’s nice to hear that better insureds are rewarded for better practices. So it sounds to me like in addition to just completing an application with, you know, name. Rank and serial number, what your values are, it sounds like the story is important and telling that story as the broker agent to the insurance community is really important to, I guess, validating or supporting why this particular business owner isn’t deserving of this increase and they deserve this increase. So that’s interesting.

[00:15:27.190]

And when you have these conversations, do your clients appreciate them, these conversations or do they dismiss? It feels to me like most business owners are reasonably sophisticated in how they come up with their rates and prices and such. So it seems to me that if they have a better understanding, then they would probably feel better about, you know, maybe making some changes in their practices and things. I think I think because it feels like it gives them a little bit of control in an area where sometimes we all feel like we have no control.

Being Educated About Insurance in a Changing Landscape

[00:15:57.250]

And that’s that’s the worst feeling to feel like you’re just in a situation, especially as a business owner. Right. That you I equate it to myself when I’m purchasing technology for the agency because I just I hate that feeling of not really knowing I need something. So I believe that when somebody is educated a little more or just or just informed, not that they’re not educated, they are, but they’re just they’re informed about how the industry works, the mechanics of it, and what they can do to to to make their to position themselves the best they can.

[00:16:29.500]

Right. I think that that works wonderful. And people love to tell their story. Everybody loves their story and what they do differently and why they’re better than, you know, the plumber down the street. Sure. Sure. It seems that with the changing consumer behaviors and more do it yourself policyholder’s. They don’t necessarily want to talk to people or talk to an agent and they will go online to get a quote and you turn on the TV or whatever the case might be.

[00:16:56.260]

And there’s all sorts of ads to, you know, get insurance on your cell phone in 15 minutes or 15 seconds or whatever the case might be. I wonder if those platforms even have an option or a medium to tell your qualitative story, or is it just here’s your address, here’s your values, here’s your payroll, here’s your sales, here’s your premium.

[00:17:17.890]

It seems to me like for those risks that are either exceptional risks that are better than average need, that agency representation, that mouthpiece to the to the companies, whereas the clients that, let’s say, have poor experience, probably also need some counseling on how they can make changes in their business to get to that that’s best in class place. So I imagine you must see clients on all sides of the spectrum. Right. So are they different conversations? Absolutely.

[00:17:49.200]

They are in conversations. And sometimes people sometimes people are more interested. So they want they want to know more. They want to know how they can affect or, you know, increase make make themselves more marketable when other times people unfortunately, sometimes they don’t. They don’t they don’t feel the need for it or they don’t think that it matters as much until it becomes too late. And then they have to start from square one. Right. Right.

[00:18:13.270]

Well, I’ll tell you. So this has been very, very insightful. I really appreciate your feedback. I think this reinforces why there’s certain things you can automate and certain things that you really need personal intervention, whether it be medical care, legal advice and certainly advice on your insurance purchases. So thank you for sharing this with us today. If people want to reach you, how is it best to to reach you?

[00:18:36.580]

You can reach me at the office number, which is 609-587-8030. Our website is harrah-assoc.com, and I’d love to speak to anybody about any questions that they may have or any way I can help. That’s great. Well, thank you once again. Thank you again to our friends at Merchants Insurance Group for sponsoring this series. My name is Bob Mazey and I look forward to seeing you again.

[00:19:01.240]

Thank you for watching.


cyber insurance in the palm of man's hand

What is Cyber Liability Insurance & Why Companies Need it

Did you know that the average cost of a data breach for a public trading company is $116 million?

Technology is a business tool that you can no longer ignore, and it has made a lot of aspects of your company easier to handle. With those benefits, however, come plenty of risks.

Cyber attacks threaten to damage your firm's reputation and finances, and one way to lessen the harm is by having cyber liability insurance. This article will explore the cyber liability insurance definition and why your company needs it.

What is Cyber Liability Insurance?

Cyber liability insurance provides coverage for issues and financial repercussions that result from data breaches or cyber-related events. The insurance policy usually includes first-party and third-party coverages.

First-party coverage offers financial compensation and support when your company is the one that was targeted by a data breach.

This includes direct financial losses, the investigation and legal costs, and the costs incurred when you notify customers that their information was compromised.

On the other hand, third-party cyber liability coverage includes coverage for data breaches of other companies or parties that affect you.

Why Does Your Company Need Cyber Liability Insurance?

Cyber breaches can seriously harm your firm, in more ways than one. These are the main reasons and scenarios that display why your company will need cyber liability insurance.

1. Your Company Relies on Technology

Can you imagine continuing with your business processes and dealings without computers or technology? If the answer is no, then you need cyber liability insurance.

By an act as simple as using the Internet - perhaps to send an email, or perhaps you have a business site where you process orders - you can put yourself at risk of hacking.

Despite your best prevention methods, such as using stronger passwords or continuously updating your software, it only takes one thing to go wrong for everything to fall apart. If your company relies on technology, being safe is better than being sorry.

2. Your Company Handles Sensitive Client Information

If your company deals with sensitive personal information from your customers, such as their credit card details, addresses, and more, a cyber attack will heavily impact you.

If a hacker gains access to these details, it can cause more attacks that will jeopardize your clients.

It opens you up to the possibility of lawsuits from customers who believe you didn't incorporate the necessary protection procedures when dealing with their information.

When clients entrust you with sensitive information, you are responsible for making sure that you minimize risks as much as possible. This includes having cyber liability insurance.

Even without a lawsuit, the cost of a cyber attack can already be quite significant.

If you have to deal with a legal dispute, this will damage your company's finances even more. Not to mention, the hit to your reputation may result in the loss of future clients.

While cyber liability insurance cannot reverse the tide and prevent a cyber attack from happening, the insurance coverage allows you to recover client data and compensate their losses accordingly.

3. You Cannot Survive a Financial Attack on Your Company

If you believe that your company cannot maintain your finances in the event of a cyber-attack, you will need cyber liability insurance. The costs of a cyber event can seriously harm your finances, both directly and indirectly.

You will have to face additional costs such as installing new protection software for your computers, having to face operational delays, engaging in a lawsuit filed by a client, and the costs of having to recover lost data.

If you have cyber liability insurance, the coverage will provide you with some financial support during this period of time, enabling you to continue financing your business operations even when faced with a devastating attack.

When you're not certain your company can survive a financial attack, having cyber liability insurance is a necessity, not a choice.

4. Cyber Liability Insurance Protects Your Reputation

Imagine a scenario where you inform a client of a data breach that jeopardizes their personal information, and, when asked, you admit you didn't have cyber liability insurance.

The damage that this does to your reputation will result in significant financial losses in the future. Even more disastrous is if your client files a legal claim against you, and you don't have the finances to defend yourself in court.

Having cyber liability insurance doesn't just protect your finances - it safeguards your professional reputation, too.

By being able to compensate for the loss your clients face and pay for the necessary legal defenses, you can still salvage your reputation in the case of a cyber hit that affects your clients.

This also ensures future clients that you have the necessary safeguards to make sure that their information is safe or will be recovered in the case of an attack.

Cyber Liability Insurance for Companies

Many consider that only larger businesses are at risk of cyberattacks, but the truth is, a lot of small businesses in the United States have experienced data breaches. This means that every business should consider having cyber liability insurance.

Cyber insurance coverage is important for firms who rely on technology, who handle sensitive information, and may be able to protect your finances and professional reputation.

The cyber liability insurance cost is worth it to reduce the consequences you have to face as a result of a breach.

Contact us today for cyber liability insurance coverage.


employees of a startup meeting in small colorful conference rooms

Learn The Basics of Business Insurance for Startups

As many as 40 percent of small businesses don't have business insurance.

When you're first starting your small business, insurance can feel like an afterthought. With so many things already happening to begin with — business insurance may even feel unnecessary.

This couldn't be any further from the truth.

Read on to learn about the basics of business insurance for your startup.

Why Do You Need Business Insurance?

Before you can understand business insurance, it's important to know why you need it. Here are a few reasons.

Better Safe Than Sorry

When you're starting out, you might not foresee a future where you're involved in a lawsuit. While it's likely that that is the truth, you're also better off safe than sorry.

Investing in business insurance is a great way to ensure that you're covered, no matter what comes up.

Can Feel Confusing

Some business owners avoid the process because it can feel confusing, but it doesn't have to. There are steps you can take to make the process that much easier.

The best thing that you can do, however, is plenty of research. Also, don't be afraid to ask any and all questions you have throughout the process.

So, What Needs Coverage?

Once you've decided on getting business insurance, your next step is to decide what exactly needs coverage. Here are a few things to consider.

  • What kind of accidents may your business be prone to?
  • What kind of natural or unexpected disasters may affect your business?
  • Do you have employees?
  • What kind of lawsuits could your business face?

Asking questions is a good way to make sure all of your bases are covered. If you can't think of questions, or just want to make sure you're fully protected, it's also smart to speak with a professional.

Types of Business Insurance

Once you decide what needs coverage, it's time to choose your coverage. There are a lot of options on the market, but here are a few that can help you in the long run.

Business Income Insurance

Business income insurance covers your business and its revenue if something happens. Not only does it generate the revenue that you would normally bring in, but there are also a few other things:

  • Day-to-day running costs
  • Temporary relocation costs
  • Taxes
  • Loans

This policy is great for planning ahead. You might never need it, but as we said earlier, it's better to be safe than sorry.

Business Auto Insurance

If your business owns and operates vehicles, fleet insurance is a must. These policies can sound confusing because it's a business policy, but there are also different coverage options within it.

In actuality, treating it as though you bought insurance for your own car is the simplest approach to take. It's normal auto insurance, but for your business.

General Liability Coverage

There are many benefits to general liability coverage. In short, this type of insurance covers you from a variety of dangers, typically accidents, injuries, or damages caused by employees.

Cyber Liability Insurance

Cyber liability insurance covers any liability in the event of a security breach or other cyber attack.

It's easy to never see your business getting hacked. It might feel like something you only read about in the news when it happens to big tech companies, but you are just as susceptible.

Commercial Umbrella Insurance

Commercial umbrella insurance is often viewed as general coverage for business owners that want to cover a comprehensive set of things for their company.

Any coverage in this plan is only activated if you exceed the benefits you have through another type of business policy.

Say, for example, your restaurant goes through some flooding during a storm and the repairs are taking longer than expected. Once the coverage from your business income insurance ran out, the commercial umbrella policy would kick in to bridge any gaps.

It's the back up for your back up.

Employment Practices Liability Insurance (EPLI)

EPLI is an important thing to have in your insurance artillery.

Even if you do everything right when firing an employee, or you treat your people well at all times, there are still some bad eggs out there. EPLI covers you from claims made by employees, past and present.

These claims can include:

  • Wrongful termination
  • Failure to employ or promote
  • Breach of employee contract
  • Discrimination
  • Harassment
  • Mismanagement of employee benefit plans

EPLI covers all legal fees associated with these claims. That includes solicitor fees and any payout you might owe if the employee wins the case.

Professional Liability Insurance

Professional liability insurance is similar to EPLI, but claims are made by customers. A few of these claims can include:

  • Providing inaccurate advice or information
  • Selling a faulty product
  • Leaving work unfinished
  • Failing to meet the promises of a contract

Traditionally, this coverage was used by lawyers, doctors, and accountants for claims of negligence. Today, however, any business can benefit from this coverage.

Whether you're a freelance writer that didn't meet the requirements of a contract or a small store owner that sold a product that didn't work. Mistakes happen.

Remember the Basics of Business Insurance When Choosing Your Policy

Now that we've covered the basics of business insurance, it's your time to go out and find the best policy for you and your business.

We know that choosing an insurance policy, especially when you're starting a new business, is the last thing you want to worry about. Luckily, Harrah & Associates is here to make the process easy for you.

If you have any questions or inquiries, feel free to contact us today.


8 Steps to Choose the Right Small Business Insurance

We all know how important it is to make sure you’re properly insured. Having vehicle, homeowners, life, and health insurance will help protect you from the financial devastation that can arise from unexpected situations.

However, when it comes to selecting the right small business insurance, things can get a bit more confusing.

Whether you’re just starting a small business, or you want to make sure your established business is fully protected, understanding the basics of buying commercial insurance will help you choose the right coverage.

The following ten tips will help you get started.

1. Review the Types of Small Business Insurance

The first step to picking business insurance is understanding your options. Some of the most important types of insurance business owners need include:

  • Business interruption – helps you pay operating expenses and recover lost income if you’re shut down because of a disaster like a building collapse, flood, fire, or theft
  • Management liability - this covers various types of liability including fiduciary, directors and officers (D&O), and employment practices liability
  • Errors and omissions (E&O) – also called “professional liability insurance,” this covers claims that your services caused a customer “financial distress”
  • Worker’s compensation – this covers expenses associated with an employee’s work-related injury
  • Product liability – covers injuries or damage caused by your products
  • Auto insurance – this is necessary if your employees use vehicles for business purposes
  • Cyber insurance – this coverage will protect your from damages that could result if you’re hacked, have a data leak, or another business-related cyber-security issue

A Business Owner’s Policy is comprehensive coverage that usually combined general liability and property insurance.

This means it would cover property damage, personal injuries, bodily injuries, and advertising injuries as well as product-related injuries and damages. Sometimes, you can also add an employment practices liability policy (ELPI) to your policy.

2. Consider Your Assets and Responsibilities

Once you’re familiar with the types of insurance available to you, it’s time to evaluate your legal responsibilities and your business assets. First, which types of insurance are you required to have?

If you have employees, there’s a good chance that you’ll have to carry worker’s compensation insurance. The same goes for auto insurance if you have a company fleet.

Other types of insurance are optional and may or may not be appropriate for your business. When deciding what you need, it’s also a good idea to consider your business assets and operations.

For example, if you own a jewelry store, you’ll want to make sure you’re insured against theft.

If you own a manufacturing plant, you’ll want to make sure your employees are protected against injuries. Professional advisors, like accountants and financial consultants, are prime candidates for carrying E&O insurance.

3. Evaluate Your Risks

When choosing your insurance coverage, you’ll also want to analyze your risk.

For example, a company that stores customer data on their server or in the cloud faces the risk of it getting into the wrong hands. For this reason, cyber liability insurance is a great idea.

On the other hand, a single-person law practice probably has no need for worker’s compensation.

Choosing the correct business insurance coverage means finding the balance between covering likely risks and avoiding wasting money on insurance for incidents that are extremely unlikely to occur.

4. Estimate Your Costs

While it would make you feel good to have millions of dollars in coverage for every possible scenario, this is usually cost-prohibitive.

Once you’ve evaluated your responsibilities and risks, you need to weigh this against the cost of purchasing comprehensive insurance coverage.

The ultimate goal is to ensure you have enough coverage to protect yourself without overpaying for coverage you don’t need.

5. Work with a Professional

If all of this is making you feel anxious, you’re not alone. That’s why many people choose to work with a professional who will help you analyze all of these factors and choose the perfect coverage.

You can choose to work with a professional insurance broker, financial advisor, or another professional business advisor with financial experience.

Having a second opinion will help you feel more comfortable and ensure you haven’t missed any important considerations.

6. Choose a Great Provider

Not all insurance providers are the same. Before you commit to a policy, take some time to research the company. Check the company’s reviews and whether they have a history of paying claims without the hassle.

Obviously, you’ll want to make sure the company is licensed to serve customers in your state.

Also take the time to research the company’s ratings by third-party agencies like A.M. Best, Moody’s, and Fitch. This will help you evaluate the financial stability of the company.

A company can only pay out your claim if they’re still in business and financially viable, so this is critical.

7. Read Your Policy

After you receive your insurance policies, make sure you take the time to read through them.

This will help ensure that it actually covers everything you think it does and that you’re aware of any “fine print.”

While it’s not the most exciting thing you’ll ever do, reading your policy will help you avoid unexpected (and unpleasant!) surprises.

8. Plan an Annual Review

Lastly, you’ll want to review your insurance coverage once a year.

This way, if there have been any significant changes in your business needs, you can proactively make adjustments.

Doing an annual review will also help you make sure you’re not overpaying for your policies.

Get Help with Your Small Business Insurance Today

It’s not always easy to choose the right combination of small business insurance coverage. That’s why you want to turn to the pros!

The experts at Harrah & Associates will evaluate your business needs and make sure you’re covered! Contact us today to schedule a consultation.


while male businessperson with arms crossed looking over a cityscape

Business Insurance: 5 Benefits of General Liability Coverage

75 percent of all businesses in the United States are underinsured.

It’s a shocking statistic, given the potential devastation the unexpected can have for ill-prepared companies. 40 percent of U.S. business businesses hit by a disaster never reopen.

As the owner of a small business, one of your biggest responsibilities is to protect your enterprise from hazards and potential catastrophes.

One way to do so is by ensuring you have business insurance. In particular, you need general liability business insurance.

But what exactly is general liability commercial insurance? What and who does it cover? Why should you get it?

These are some issues we highlight in today’s comprehensive post. Read on to learn more.

What is General Liability Business Insurance?

General liability insurance refers to an insurance policy that provides liability coverage for general business risks.

It’s one of the different types of insurance that a company needs for protection against potential business risks.

What Does General Liability Commercial Insurance Cover?

General liability insurance for small business enterprises covers a wide variety of issues. These include:

Bodily Injury

When a third party suffers bodily harm as a result of your business activities, they may file a claim against you. Your general liability coverage can help take care of that.

Property Damage

You or your workers might accidentally damage the property of a third party during your business activities. These damages are included in your general liability coverage.

Personal and Advertising Injury

Sometimes, a company’s advertising efforts lead to the financial loss of a third party. This type of harm is considered a personal and advertising injury.

You are liable for this type of injury if you are found to have committed libel, slander, invasion of privacy, or copyright infringement.

Your general liability policy can help cover the costs associated with this injury.

Medical Payments

When a third party at your business location suffers injuries, you may have to pay for their treatment.

The same applies when third parties suffer injuries at other locations where your workers are involved in business activities. Your general liability policy can take care of these issues.

Defense Costs

When facing a lawsuit, one of the biggest expenses you can face is paying for your legal defense. Your general liability coverage can assign and pay for your legal counsel.

Who is Covered?

General liability insurance covers your business and your employees against claims when your business operations cause damages of injury.

This insurance can also cover manufacturers and wholesalers if the products they deal with have the potential to hurt third parties.

General liability insurance also provides coverage for vendors who sell your products in case they face potential lawsuits related to the products.

Benefits of General Liability Insurance

Now that we’ve seen what general liability insurance is and what it covers, it’s time to look at some of the top reasons to invest in the policy. Here are five top benefits of general liability coverage.

1. It Demonstrates Responsibility

When you get small business insurance, you're communicating to your clients you're ready to assume responsibility in case liable for accidents that occur in your business locations.

It shows that besides doing your best to protect your company, you have your clients’ best interests in mind.

2. It Shows You're Established

Having commercial general liability business coverage demonstrates that you’re serious about protecting your livelihood for the long-term.

It tells your prospects, customers, and other stakeholders that you don’t want to risk claims that might threaten the future of your business.

As a result, you reinforce that trust that your clients have in you. If clients trust you and love your products or services, they’re most likely to give you repeat business and refer others to you.

3. It Could Increase Client Contracts

Many clients insist on working with businesses that have general liability insurance. Why? Because no client wants to be liable for your mistakes.

Not having this type of policy could also make clients think you want to avoid claims. On the other hand, having general liability coverage can significantly boost trust and lead to new and bigger business opportunities.

4. It Keeps You Afloat During Troubling Times

While no one wants to imagine that something bad will happen to your business, sometimes the unexpected happens.

In case of a disaster, your general liability insurance can help cover the cost of repair and replacement.

The policy helps make sure that your normal operations don’t stall in the event of these theft, damage, or fire incidents.

5. It May Protect Your Company Against Cybercrime

Cybercrime is a very real threat today, affecting millions of businesses every year.

A single cybercrime incident can devastate your business, both financially and in terms of your reputation. That’s why you need to stay prepared for cyberattacks at all times.

One way to do so is to have the right coverage against cybercrime.

A general liability insurance policy with data breach coverage can help you get your business on track quickly in case you become the victim of cybercrime.

The policy pays for legal costs, remediation expenses, and other costs associated with data breaches.

Tips for Buying General Liability Business Insurance

So, how do you go about purchasing the right general liability insurance coverage?

The first thing you need to do is to identify your risks. Thoroughly analyze your operations and identify all potential risks so you can cover the appropriate coverage.

Be sure to choose a competent, independent insurance agency to guide you through the process of choosing and applying for the ideal policy for you.

Don't forget to compare offers from several business insurance companies, so you get the best deal for you. Your insurance agent should be able to suggest the best insurance providers for you.

Protect Your Business by Getting the Right Insurance Coverage

Every small business needs to prepare for potential crises. No one knows when disaster will strike.

By having general liability business insurance, you can get your business back on track in case of anything.

Are you interested in getting general liability coverage for your business? Please contact us today.


Transporting freighting service lorry trucks

The Essential Guide to Buying Commercial Auto Insurance

Roughly 75 percent of businesses around the world are underinsured. It’s a shocking statistic given the many business risks that companies face today.

For businesses that operate vehicles, commercial insurance is especially important. The road can be a dangerous place, and auto businesses have unique risks that most other businesses don’t.

That’s why having commercial auto insurance is so vital.

While on the road, your vehicles and drivers are always at the mercy of foul weather, poor road conditions, careless road users, and heavy traffic. Add these risks to vandalism, uninsured drivers, and America’s litigious culture, and the potential costs escalate.

With the best commercial auto insurance, however, you can reduce the financial impact of any interruptions, damages, or losses that occur because of the unexpected.

But what exactly is commercial auto insurance? What does it cover? How can you identify and purchase the ideal insurance policy for your auto company?

These are some issues we cover in this comprehensive guide. Read on to learn more.

What Is Commercial Auto Insurance?

Commercial auto insurance refers to insurance that covers businesses that operate vehicles. This insurance helps businesses cover expenses associated with repairing or replacing company vehicles.

All companies that use vehicles for business purposes need commercial auto insurance coverage. A commercial auto insurance policy provides a higher level of coverage than a personal car insurance policy.

This insurance coverage also boosts your risk mitigation strategy. How? Well, it gives you better chances of keeping your operations running, even when one or more of your vehicles have been involved in an accident.

Commercial auto insurance is available for all types of vehicles. These include cars, vans, semi-trucks, trucks, and specialist vehicles.

What Business Auto Insurance Covers

Commercial auto insurance carriers provide coverage for expenses associated with an accident. These costs include:

  • Physical damage or theft
  • Medical payments and expenses
  • Car accident liability
  • An accident with an uninsured driver

Study the fine print to find out any policy exclusions, coverage eligibility, and so on when applying for this type of insurance.

Purchasing Commercial Auto Insurance

The best commercial auto insurance is the one that fits your company's needs perfectly. Here are a few smart tips for purchasing coverage that you won't regret.

Understand Your Needs

How often do you use vehicles for business tasks? If you only use one vehicle occasionally for business purposes, then you may want to consider expanding your personal car coverage.

Do you only use rental vehicles in your business? Then you’ll want to go for hired auto insurance. If some of your employees regularly use their personal vehicle, then you want to get non-owned auto coverage.

Know Your Unique Business Risks

Every type of business has its unique risks. Carefully examine your company and take stock of your operations, how heavy your vehicle use is, and the different risk scenarios in your business.

Depending on whether you transport clients, deliver food, haul construction equipment, or are in the moving business, your business will have specific hazards. By identifying these unique risks, you can decide which types of auto coverage you should look at.

Purchase the Highest Amount of Coverage You Can

There are minimum auto coverage requirements in every state. However, your business may require more, depending on the nature and scope of your operations.

Always go for as much coverage as your business can afford. This way, you are more insulated in case one of your employees gets involved in an accident.

Understand the Difference Between Commercial and Personal Auto Insurance

A personal auto insurance policy generally doesn't cover accidents that occur when driving your personal car for business purposes.

It's why you need business auto insurance to cover any damages to your vehicle or other vehicles involved in an accident during business operations.

As we pointed out earlier, commercial auto insurance can also cover other costs related to the accident, including medical expenses and legal fees, should the other driver sue your business.

Find Out What’s Covered in the Policy

Not all commercial auto insurance policies are the same. Most policies cover auto liability, uninsured and underinsured motorists, medical expenses, physical damage, collision, rental assistance, and vehicle rental reimbursement.

Contents of the vehicle are usually not covered by these policies.

Look for Ways to Proactively Cut Costs

You want to keep your insurance premiums low. One way to do so is by taking appropriate actions to minimize the likelihood of accidents and other unpleasant occurrences.

Invest in safety devices for your vehicles. For instance, consider installing anti-lock brakes, automatic seat belts, side airbags, and daytime running lights. You could also go for anti-theft devices such as GPS and alarm systems.

Don’t forget to do your research when hiring your drivers. Check employee driving records before entrusting them with company vehicles. Hiring employees who have stellar driving records helps keep your insurance premiums low.

Choose the Right Auto Insurance Provider

Once you start shopping for commercial auto insurance, the first thing you'll realize is that there are countless agencies offering this service.

Given that not all business auto insurance carriers are created equal, you need to be careful when choosing the right one for you. Keep in mind that the kind of insurance provider you choose will determine what experience you have with them.

Start by getting recommendations from people you can trust. Next, look at whether the company is properly certified to operate in your state.

Other factors like the company’s history and reputation, ease of doing business, rates, and special offers should also come into play.

Get the Right Commercial Auto Coverage for You

A huge part of being a responsible business owner is planning ahead for potential risks. This includes getting a suitable commercial auto insurance policy if vehicles play a role in your business operations.

Are you interested in a business insurance policy that’s tailored for your needs? Please contact us today.


a person holding a ball accompanied by cyber security terms

10 Tips to Help Reduce the Likelihood of a Cyber Attack

What is cyber liability insurance and why is it important?

It covers you for liability that you may endure because of somebody hacking into your system also covers you for first-party issues. That's your stuff.

If somebody infiltrates a virus in your system and enables it to operate, or if somebody hacks in and transfers money from your bank account erroneously, those are the things that cyber liability covers.

We know many times clients of ours may not be able to allocate additional funds to insurance. As we all know, insurance can be costly.

We wanted to give you some tips that might insulate yourself from an attack, so here are 10 tips to help you reduce the likelihood of sustaining a cyber attack.

1. Train Your Staff

First and foremost, train your employees on the importance of cybersecurity and what could happen to your business if you sustained a cyber attack, data breach or hack.

2. Install Security Software

Next, make sure you have antiviral and anti-spyware software on your system and make sure it's updated regularly.

We'd also caution you here in this environment to make sure your employees have that as well on their laptops or their connections when they're working remotely.

It's critical right now during the pandemic that we all take the extra step to make sure that our security that we have in our businesses is extended to all these home offices that we all now have that we didn't have in the past.

3. Have a Firewall

The same applies to a firewall. It's critical to make sure you have a firewall that covers all of your computers and again, your remote employees need to have a firewall as well.

4. Back Up Your Data Regularly

Backing up data is extremely important. It sounds simple, but so many people forget to do it. So, that should be done regularly.

5. Update Your Software

Software updates on your operating systems should be done regularly as well. Most times the updates contain enhanced security.

6. Control Physical Access

Controlling physical access to your computers is also very important. You want to do what you can to prevent strangers or unwanted people from getting into your building and possibly turning on your computers

7. Make Your WiFi Network Secure

Having access to a secure Wi-Fi network is also critical. We know it sounds kind of like common sense, but sometimes you'd be surprised at how many people don't have that.

Or again, more importantly, your employees, when they're working remotely for you, make sure they know they have to work on a secure network.

8. Provide Employees With Their Own Logins

Each individual employee should have their own login and password to all the sites they access on your behalf. If everyone shares a login, it increases the likelihood of a damaging cyber attack.

9. Limit Who Can Install New Software

You also need to limit the people that have the ability to install software. This should be limited to the business owners and maybe the operational manager.

10. Change Passwords Regularly

And last but not least, this is an easy one. You want to make sure that you and your employees regularly change passwords.

Taking these steps will definitely help make your business more secure. However, in no means do we think having these steps can replace the importance of a cyber liability policy.

We would strongly suggest you reach out to your broker and talk to them about it, or reach out to us.

We'd love to talk to you and give you further detail about this coverage. It protects you tremendously and the coverage is less expensive than you'd think. Don't be frightened by another policy...


a male and female business professional working together

What Is Professional Liability Insurance & Why Is It Important?

You started a business, and you want it to be covered, so naturally, you look into insurance. You come across professional liability insurance and wonder what it is.

Well, you're in the right place. In premise, PLI is insurance that protects professionals (lawyers, physicians, accountants, etc) against negligence initiated by clients.

In this article, we will cover in-depth what is professional liability insurance so you can make an educated decision about it.

What Is Professional Liability Insurance?

As mentioned earlier, professional liability insurance protects professionals (physicians, accountants, lawyers, etc) against negligence and similar claims from their clients.

Professionals who have expertise in any area require this insurance because general liability does not offer the protection against claims that come from the business or professional practice, such as misrepresentation, negligence, and malpractice.

What Does It Cover?

Professional liability insurance covers many things, some which are but not limited to:

  • Misrepresentation
  • Negligence
  • Malpractice
  • Inaccurate advice

Even if you are not in the wrong, your client still has the option to sue the business if they feel you've made a mistake. Without this coverage, you will be responsible for paying the legal costs out of your own pocket.

However, PLI does not cover everything. For instance, it will not help your business against claims like this:

  • Any claim of property damage or bodily harm. For this, you need general liability insurance.
  • Any claim of illness or work-related injury. If your employee gets sick or hurts on the job, you need workers comp to help them recover and return.
  • Any claim of a data breach. In this case, you need cyber insurance to cover business loss of sensitive information.
  • ...And many more

Who Is Professional Liability Insurance for?

Professional liability insurance is perfect for a variety of businesses, and some states actually require this insurance to be active.

In other states, business owners choose this coverage in fear of a customer or client suing them.

Typically, you want PLI if you:

  • Offer professional services to your clients directly
  • Provide specialized advice to your clients regularly
  • Have to sign contracts that require you to have this type of coverage

However, there are a myriad of other reasons someone would want PLI, so keep that in mind. Whatever reason you need PLI for, make sure you find a specialized and experienced provider who is there for you, and not just themselves.

How Does PLI Work?

Depending on the field of expertise, professional liability insurance might have a different identifying name, such as errors & omissions for real estate, medical malpractice for medicine, so on and so forth.

PLI is specialty coverage that is not provided under the in-home business policy, homeowners endorsement, business-owner policy. It only corresponds to claims made within the active policy period.

PLI policies are developed on a claims-informed basis, which means the insurance is only good for the claims within a certain timeframe.

PLI will indemnify the insured against loss arising from these claims by reasons of all covered errors, negligent acts, or omissions that are committed in the regular conduct of the professional business throughout the policy period.

Incidents occurring before the policy are most likely not applicable to coverage, however, some policies might possess a retroactive date.

For instance, the retroactive date references that you are covered for incidents that occur on or after the specified data.

Whereas, the extended reporting period assists coverage for claims that have been filed within a period of time after policy expiration. This is generally two months of time, but the timeframe can be extended for a year or more at the expense of additional costs.

Your insurance provider will only cover claims made against the business during the period or within the extended reporting timeframe.

The claim must be from an omission or error that occurred after the retroactive date. That's professional liability insurance.

PLI Policy Wording

Some policies are worded in a very specific way than others (more restrictive than others).

While the majority of the policy wording is developed to satisfy the minimum approved wording, which makes it easier to compare to other policies. Some policies differ tremendously in the type of coverage provided.

For instance, breach of duty can be included if the incident has happened, and was reported by the policy owner to the provider within the policy period.

Wordings with extensive legal variations can be quite confusing to non-lawyers.

For example, coverage for error, omission, or negligent act can indemnify the policyholder against circumstances or loss that has occurred only because of any of the three (negligent modifier does not apply to all three categories, though a non-legal reader might assume so).

Furthermore, a negligent act, negligent omission or negligent error is significantly more restructure, which would most definitely deny coverage for a lawsuit that has alleged non-negligent omission or error.

And that's why the importance of a lawyer is so stressed by individuals in the community. The policy provider might not care for you to have legal representation, but without it, you might inflict unfavorable terms upon the security of your business.

PLI for You

Now that you know what is professional liability insurance, you are well on your way to determine whether or not it's the right option for you.

However, for some individuals, it's not really a choice, but more of a consideration upon which provider is the best for them.

If you're interested in learning more about PLI or want to check out our policies, get in touch with us and we will happily accommodate your professional needs.


Factors That Impact Personal Car Insurance In New Jersey

Auto insurance is a requirement for both all new drivers in New Jersey and all its counties.

There are different types of car insurance, which come at different prices. Quotes for car insurance in New Jersey varies from company to company, and that is usually based on certain factors.

Companies use information based on these factors to determine how much the client will pay for their insurance coverage.

The information tells them whether you are high or low risk and give you a quote based on that. Ideally, the higher your risk, the more money you will pay for your auto insurance.

The factors involved in calculating your car insurance amount range from driving to non-driving and include the following:

Location Location Location

When it comes to location, insurance companies analyze the location where your car is usually parked and how populated the area is.

For rural and less populated areas, the risk of accidents, vandalism and theft are relatively lower as compared to urban areas, and so you’re likely to have a lower quote.

Mercerville, New Jersey is considered a suburban community, and so the quote will probably be somewhere in the middle. In some states, however, your location is not a major consideration.

Age & Experience

The consideration made based on age is centered around driving experience.

Generally, for young, novice drivers, it is their lack of experience, and for the older citizens, it is their slower response to reflexes that makes these groups more prone to accidents. Therefore, the older or younger you are, the higher your quote may be.

How well of a driver someone is, also contributes to how prone they will be to accidents. The rule of thumb is that more experience means lower risk, which may also lead to lower rates.

Driving Record

Some companies are big on safety and will consider how safe of a driver you are to set your insurance rates. The number of accidents, violations and your general history as a driver is a few things that they will consider.

The lower the quality of your driving history, i.e. more accidents and violations, the higher your rate is meant to be. In some cases, you may find it difficult getting insurance that doesn’t require costly premiums.

Type of Car

The different modifications that cars have can affect how a person drives. While some vehicle comes with easy-to-use features, others may be a little more technical to operate, thereby affecting the driver’s experience.

The smoother the car is to use, the less likely it is for the driver to get into accidents. Other things about the car model that can be used to determine the insurance rate include the price of the car, the cost of repairs, safety tests, accident and theft rate.

The higher the chances of these factors, the more you are likely to pay for insurance, and vice versa. If you have additional safety features on your car, then you also have a better chance of getting a lower rate or a discount on your insurance premium.

Credit Score

The use of credit score or history to determine car insurance premium rate is a controversial topic in NJ.

The assumption, which is backed by research, is that the lower a person’s credit score, the more likely they are to file inflated claims, file many claims and sometimes even engage in insurance fraud.

Insurance companies, therefore, charge higher ratings for people with low credit scores. Also, how a person is allowed to pay their premiums is affected by the credit score because the statistics show that people with low credit scores are likely to miss payments.

For example, you may be asked to pay premiums upfront or make some months’ (usually six or 12) payment in advance.

Family Situation

Statistics show that married couples are less likely to get involved in accidents than their single counterparts, which include widowed and divorced individuals.

The reason is that married people are less active, and because they have their families in mind, are relatively safer when on the road.

So, insurance companies usually have discounts for married drivers, especially when they combine their policies with the same company.

Gender

While this may sound strange, some statistics show that gender determines driving behavior.

There is evidence that shows that males are riskier drivers, especially at a young age. Females are known to engage in safer driving habits such as wearing a seat belt, adhering to speed limits and not driving when intoxicated.

Males, on the other hand, sometimes become over-confident behind the driving wheel, which tends to make them more likely to crash. Therefore, based on this, car insurance companies in New Jersey tend to have lower rates for females than for males.

However, as males and females reach their 30s, driving behaviors become similar, and so there isn’t any significant difference in the rates charged. However, statistics show that males go back to being high-risk drivers over females as they grow older.

Claims Record

The claims you have already made, whether with them or previous auto insurers, are also going to be analyzed by insurance companies when setting rates.

The more at-fault claims made, the higher your rate is likely to be, and vice versa. Not at-fault or comprehensive claims also have a higher chance of attracting lower rates. In both cases, some companies will consider the amount paid and losses incurred.

The number of claims you make is also important to some insurance companies and the more claims you make within a year, the more likely you are to be considered a high-risk consumer. In that case, you may experience an increase in the amount you pay for your car.

If you will need car insurance in New Jersey, then you would have to consider what factors are considered when setting your insurance rate.

While some of these factors like age and gender cannot be controlled, you should try to control those that are. Putting yourself on the lower end of the risk spectrum will help you reduce costs in the long run.


Builders and contractor talking on a construction site

What is Contractor Insurance & Do I Need Coverage?

Today, many skilled professionals are striking out on their own and starting a contracting business.

However, if you’re not careful, you could end up owing more than you’ll ever earn as a contractor. Accordingly, it’s important to have the right contractor insurance for your business.

Construction work is very aggressive–and dangerous. Because of the nature of the field, it’s not unheard of for construction contractors to damage property – or worse – hurt themselves.

Liability insurance protects contractors who are on the job. If something should go wrong during a job, it will also protect your assets.

A good contractor liability coverage policy will protect you financially should an accident, injury or property damage incident take place on the job.

To learn more about how contractor insurance can protect you and your business, read on.

Who Needs Contractor Insurance?

Contractors perform skilled services for people and businesses. Contractor insurance is a good idea for nearly anyone who performs professional services for other people.

Contractors work in nearly all industries. However, people most often mean construction professionals when they use the word contractor.

If you work in construction, insurance is more than something that’s nice to have. In some instances, the law requires it.

In some states, you cannot ply your trade without contractor insurance. In New Jersey, for instance, you must have a minimum of $500,000 of general liability insurance.

Also, you must have workers comp insurance if you employ workers. New Jersey law also requires painters to obtain a special license if they work with lead paint.

You may also want insurance for your equipment. For example, you can purchase insurance to cover miscellaneous tools such as wrenches or hammers. You can also buy contractor insurance coverage for heavy equipment, such as trailers and forklifts.

What Does Contractor Insurance Cover?

On work sites, you could find yourself in one of many dilemmas. For instance, you may need your insurance to cover injuries.

Injury insurance may cover unforeseen costs, such as court awards, funerals, or medical expenses. It’s essential not to confuse this kind of insurance with Workmen’s Compensation coverage. That’s a different type of insurance for employees.

Contractor insurance may also cover you for damage claims. If you accidentally damage someone’s property, for example, insurance may keep you from having to pay the cost of repairing it out of pocket. Contractor insurance may also cover the cost of interrupting someone’s business due to an accident.

In some instances, you may find yourself liable for things out of your control. For example, the court can award someone a reward for an injury that occurred because of a defect in a product you installed on their property. Contracting insurance can help you mitigate your losses.

Insurance can cover contractors and other ways. For instance, you may design products. If you create something similar to someone else’s product, insurance can protect you if that individual sues your company.

How Much Does Contractor Insurance Cost?

The cost of contracting insurance varies. Insurers calculate premium rates by assessing the risks associated with your business.

For instance, you may frequently do low-risk work. In this case, a business owner’s policy may serve your needs well, as opposed to contractor liability insurance.

Alternatively, you may work in a high-risk industry. For example, you may repair and replace roofs.

Working on roofs presents an inherent risk. If you work in this field, you’ll naturally have to pay higher insurance premiums.

Insurance can protect you from significant losses. Insurance policies are relatively inexpensive compared to what you’d pay out-of-pocket if something goes wrong. Coverage usually lasts from six months to a year.

When considering a policy for your business, it’s important to think about the work that you regularly perform. Also, for large projects, it’s a good idea to purchase a policy that’s above two to three times the estimated cost of the work that you’ll perform.

Depending on your trade, general liability insurance can cost you about $700 to $9,500 per year. Professional liability insurance can cost you from $550 to $2,000 yearly. Meanwhile, builder’s risk insurance may cost you from 1% to 4% of construction costs.

Saying Yes to Insurance: The Smart Move for Contractors

Very few business owners have enough capital to pay for accidents out of pocket–even if they’re well-established. It’s important to buy the right insurance to protect your business and your source of income.

Basic coverage–such as unemployment, workers’ compensation and property insurance–are a good place to start. However, by purchasing independent contractor's insurance, you can make sure you’re covered completely.

There’s no way to predict when an accident will occur. You don’t want something to go wrong and then find out that your current insurance doesn’t cover you for all possibilities.

If you wait until something happens, it’s too late to buy insurance. Now is the time to protect your business and your livelihood–before the unimaginable happens.

An Insurer That’s Got You Covered

Harrah & Associates has served consumers and businesses since 1955. We understand the distinctive needs of your business. We have the experience and skill to craft a contractor insurance program to protect your business from nearly all unforeseen circumstances.

Contact a Harrah & Associates representative today to find out how easy it is to access comprehensive business insurance. Our experts are standing by and waiting to help you fulfill your insurance needs.