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Small Business Owners Insurance Guidelines

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Insurance Types Small Business Owners Should Know About

Being a small business owner can be simultaneously exhilarating and terrifying. As the boss, you must keep in mind what’s best for your business and its growth, as well as protecting your assets, your family, and your employees. Given the dizzying array of responsibilities you will feel at any given time, having the right types of insurance coverage is critical to staying safe, protected, and financially prudent.

Which insurance policies should you consider as a business owner?

General Liability Insurance

When you open a storefront or office space, you are suddenly opening yourself up to potential lawsuits should any customers be hurt and you are responsible for what happened. Every brick and mortar business should have a level of general liability insurance to ensure that if something unforeseeable happens, you’re prepared.

Business Owner’s Policy (BOP)

Rather than seek out individual insurance policies for every small risk, small business owners should consider a basic business owner’s policy (BOP). The standard BOPs on the market will help protect you and your business in the event of unexpected issues like property damage, business interruptions, crime, vehicle accidents, and more.

Worker’s Compensation

All businesses are required to carry Worker’s Compensation Insurance. This insurance will pay the medical bills and lost wages if an employee is hurt or gets sick on the job.

Professional Liability Insurance

When you’re offering your services and expertise to your clients, professional error may arise, resulting in issues with the client, your reputation, or even legal action. By purchasing professional liability insurance, also known as Errors and Omission Insurance, you’ll be protected if you fail to provide the quality of services expected on behalf of the client.

Key Employee Insurance

Small business owners may rely heavily on specific employees. These key employees, thanks to their experience, knowledge, skills, or customer relationships, are likely critical players in the success of the business. These are the employees who may be deemed ‘irreplaceable.’ Should these key employees become disabled or pass away, key employee insurance helps protect businesses from the expected impact to their bottom line.

Umbrella Policies

Lastly, an umbrella insurance policy provides greater levels of liability protection than other individual insurance policies. For example, automobile or “slip and fall” liability policies may only cover a certain dollar level, but a significant event might require even greater coverage. In anticipation of such a risk, small business owners can purchase an umbrella policy to give broader and higher levels of protection than the underlying policies provide.

When you’re looking to make sure your business is protected, be sure to consult experts in the insurance world. Schechner Lifson can help guide you through these critical decisions and answer any questions or concerns you may have, even if you’re not a client. Get in touch with us today to learn more.

Long-Term Vs. Short Term Disability Insurance

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Long-Term Vs. Short Term Disability: Understanding the Differences

In the world of insurance, where you purchase protection plans hoping you never actually need to use them, disability insurance is one of those policies that could end up being the most valuable should you ever need it. Disability insurance exists to ensure your basic financial needs are met, including the funds for supplemental care, should something happen to you that inhibits your ability to support you and family.

Many families will recognize that they have disability insurance, whether provided by an employer, union, or purchased on its own, and assume that it means they have nothing to worry about. However, the specific details associated with disability insurance programs are incredibly important, particularly the differences between long term vs. short term disability policies.

So, as you review your existing disability insurance or consider purchasing a new plan that includes it, you must keep in mind the pros and cons of long-term vs. short term disability insurance:

How long will you receive benefits?

The most fundamental difference in short term vs. long-term disability is in the name: how long do the benefits last? Short term disability insurance is intended to cover a period from three to six months. Short term disability insurance is meant to provide income for shorter recovery periods from accidents or health issues that are not permanent.

Long-term disability insurance, on the other hand, is meant to provide a safety net for a much longer period, typically in intervals of five years or even until the policyholder reaches retirement age. The reason for this difference is that long-term disability insurance is provided to make sure that if an accident or health issue arises on a more permanent level, you’ll still be able to meet your financial needs and receive supplemental care if required.

When will you start getting payments?

For short term disability, because the payout period is meant to cover the immediate financial needs and for a shorter length of time, the waiting period (sometimes called the elimination period) is only a few weeks or less. Long-term disability insurance plans will typically start paying after a waiting period of three or six months.

How much will your payout be?

In NJ, short-term disability is required by law. The benefit (as of July 1, 2020) is 85% of pre-disability earnings to a maximum of $881/week. Some employers will have a supplemental plan. Long Term Disability provided by an employer will typically pay 66 2/3rd % of pre-disability income to a monthly maximum, often $5,000, but it may be higher. Individual long term disability policy payments will depend on the amount of insurance purchased.

Which is right for me?

Whether you need short term disability insurance, long-term disability insurance, or both, is a personal question for you and your family. Factors to consider include what type of automatic coverage your employer offers for accidents and disability, whether you’re the only income earner in your household, your savings, and how much accumulated debt you have.

If you have any questions regarding disability insurance, reach out to a trusted insurance broker. Schechner Lifson Corporation is happy to review your situation and help find you a provider. Contact us today!

Small Business Automobile Liability Considerations & More

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Is Your Small Business Protected with Automobile Liability Coverage?

As the majority of Americans are weathering COVID-19, if you’re a business owner, you are seeing challenges that go above and beyond sheltering in place. Overseeing evolving business operations and making adjustments to resources and your business model may suddenly have your employees making deliveries or carrying out new, select tasks on behalf of your company, regularly. Whether you are using rental cars or employee-owned cars, ensuring your company is protected is vital. Your employee may have their own personal automobile insurance, but if driving has now become a part of their job, then you need to make sure you have appropriate automobility liability on top of that as well.

How do you know what type of coverage you need? And, what would happen if an employee of your small business got into an accident while on company time? Keep reading to learn more.

Hired and Non-Owned Auto Insurance (HNO)

For employees who are simply driving to or from work, you don’t need any additional coverage. But if driving a non-company owned vehicle has become a part of their job duties, then you’ll want to explore hired and non-owned auto (or HNO) insurance. HNO insurance specifically covers the business from liability arising from incidents involving an employee driving a rental car or the employee’s own car for business purposes.

Noteworthy, this does not cover business-owned vehicles, as that would already be covered on the business’ auto insurance policy. As well, HNO is only meant to cover liability and not the physical damage to the vehicles or the business property inside the vehicle. Lastly, HNO insurance covers the business for liability from a third party, not an employee. If the employee is injured, that would be covered by worker’s compensation insurance.

Risks of Not Having Automobile Liability Coverage

Many small businesses and their employees will simply assume that the employee’s auto insurance is sufficient or may not have even thought about the insurance, but avoiding having specific automobile liability insurance or simply being misinformed or overwhelmed because of these challenging times may leave you open to additional risks.

The employee’s auto insurance may cover the employee as a result of any incident, but it does not protect the business from a potential lawsuit by anyone else involved in an accident. These types of liability can be a much bigger risk than simply collision damage, so a business that regularly has employees traveling via personal or rental car must seriously consider the risks associated and protect themselves accordingly.

Extra considerations while working remotely: Vacant office spaces

Another important insurance consideration is whether your commercial property insurance has a vacancy clause. While the majority of the American workforce is working remotely, offices are left either vacant or unoccupied. If a business is vacant and there are issues with vandalized windows or graffiti, some coverages may not apply. Under certain conditions, a building cannot be vacant for more than 30 days.

The cost to insure your building is also dependent on what goes on inside, the kind of equipment you use, and more. If you want to review your current policy to make sure you’re properly protected, Schechner Lifson is happy to go over your plan, even if you’re not a client.

Do you have more questions?

Schechner Lifson Corporation can answer your questions about relevant auto insurance policies, commercial property insurance, and more. Get in touch with us today if your employees are using their own vehicles to carry out business operations, you’re unsure if you have a vacancy clause, and more. While you continue to work from home, we want to make sure you’re covered.

Dropping Application Barriers: The Life Insurance Medical Exam

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How Some Carriers are Forgoing the Life Insurance Medical Exam & More

For many life insurance carriers, in a very typical, pre-COVID-19 world, routine steps were necessary to obtain life insurance. Processes were in place and required to purchase a plan, such as the retrieval of medical records sent by specialists or a family doctor, a life insurance medical exam performed in person, and more. But as the world contends with COVID-19 and the coronavirus outbreak, many industries are turning into anything but typical and routine, becoming more flexible to help get you protected.

Requirements to maintain social distancing to prevent the spread of the virus means that some carriers are forgoing the in-person life insurance medical exam as well the requirement to have front line physicians release medical records. It’s best for both medical practitioners and life insurance applicants to avoid the risk of exposure.

How Some Carriers are Dropping Application Barriers:

The Life Insurance Medical Exam

The great news is, the life insurance industry is still open for business. For individuals that qualify, and most people will, Schechner Lifson is happy to work with you to find a carrier that will skip the life insurance medical exam. With no personal contact, you can have your application completed, your prescription records released by your pharmacy, your medical records reviewed, and get a final determination of a clean bill of health to move forward without an exam.

Retrieval of Medical Records

Thanks to the digitization of our medical records and online in-patient portals, it’s never been easier to get our hands on our medical records. In-patient portal records are being electronically released directly to the carrier, streamlining the application process and alleviating just one extra duty for our front line workers.

Could this new process affect premiums?

No, if you obtain a life insurance policy from carriers offering more flexible options, such as retrieving records from a portal rather than a physician, and skipping the medical exam if you have a clean bill of health, your policy would be considered the same as a policy that was attained via traditional, pre-COVID-19 means. Therefore, your policy and its premiums will not be impacted.

Schechner Lifson Corporation, an independent insurance agency, is happy to help you find a more flexible life insurance carrier, giving you the ultimate peace of mind as we continue to navigate these challenging times. Get in touch with us today to get started.

Business Interruption Insurance and Covid-19

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Will Business Interruption Insurance for Pandemics and Covid-19 Cover My Losses?

Currently, there is no coverage under business interruption coverage for pandemics and Covid-19. There is talk of possible legislative action that will enact coverage changes and provide business interruption during a stipulated period, which is to be determined.

If this action is approved, it will not be easy as there are millions of affected policyholders and not nearly enough adjusters. These are not easy claims to adjust, and as stated, there are not enough adjusters to handle the masses.

If you feel you have suffered a business interruption loss as a result of Covid-19, we suggest you notify your insurance agent to put your carrier on notice and get you logged into the system. If the action is approved and coverage is afforded, being in the system will provide a leg up on the process and help expedite getting payment.

As these are the opinions of Schechner Lifson, you have to understand that submitting a claim will not impact your policy or coverage as currently written. When submitting, you should reference your company name and date you had to shut down and/or release employees. Be patient, but proactive. If you have any questions – don’t hesitate to contact Schechner Lifson today. We are currently working remotely but happy to help during these unprecedented times.
Marc Rosenkrantz,CRM,CIC,AAI

Notice to NY Policyholders

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Dear New York Policyholders,

 

A recent Executive Order issued by Governor Cuomo, together with recent amendments to the insurance and banking regulations (the “regulations”) issued by the New York State Department of Financial Services (“Department”), extend grace periods and give you other rights under certain property/casualty insurance policies if you are an individual or small business and can demonstrate financial hardship as a result of the novel coronavirus (“COVID?19”) pandemic (“affected policyholder”).  These grace periods and rights are currently in effect but are temporary, though they may be extended further.  Please check the Department’s website at https://www.dfs.ny.gov/consumers/coronavirus for updates.

If you are an individual, generally, personal lines property/casualty insurance policies are covered by these amendments, including auto, homeowners’ and renters’ insurance.  If you are an individual and an affected policyholder, please contact your insurer or broker if you are uncertain whether your policy is covered.

If you are a small business, only certain types of commercial lines property/casualty insurance policies are covered by these amendments, generally including property, fire, commercial general liability, special multiperil, medical malpractice, workers’ compensation, commercial auto (including livery and other for-hire vehicles), and commercial umbrella insurance. A business qualifies as a “small business” if it is resident in New York State, is independently owned and operated, and employs 100 or fewer individuals.  If you are a small business and an affected policyholder, please contact your insurer or broker if you are uncertain whether your policy is covered.

Moratorium on Cancellation, Non-Renewal, and Conditional Renewal

If you are an affected policyholder, there is a moratorium on your insurer cancelling, non-renewing, or conditionally renewing your property/casualty insurance policy for a period of 60 days.  If you do not make a timely premium payment and can demonstrate financial hardship as a result of the COVID-19 pandemic, your insurer may not impose any late fees relating to the premium payment or report you to a credit reporting agency or a debt collection agency regarding such premium payment.

Catching up on Overdue Insurance Payments

The regulations also require your insurer to permit you, as an affected policyholder, to pay the overdue premium over a 12-month period if you did not make a timely premium payment due to financial hardship as a result of the COVID-19 pandemic and can still demonstrate financial hardship as a result of the COVID-19 pandemic.  This also applies if the insurer sent you a nonpayment cancellation notice prior to March 29, 2020.

 

Policies Financed by Premium Finance Agencies – Grace Period

If your insurance policy has been financed through a premium finance agency, and you, as an affected policyholder, do not make an installment payment, the premium finance agency may not cancel your policy for a period of at least 60 days, including any contractual grace period, and subject to the safety and soundness of the premium finance agency.  In addition, if you do not make a timely installment payment to the premium finance agency, the premium finance agency must extend the due date for the installment payment by at least 60 days, may not impose any late fees relating to that installment payment, and may not report you to a credit reporting agency or a debt collection agency regarding that installment payment.

Catching up on Overdue Payments to Premium Finance Agencies

If you, as an affected policyholder, do not make a timely installment payment to the premium finance agency due to financial hardship as a result of the COVID-19 pandemic, the premium finance agency must permit you to pay the installment payment over a 12-month period if you can still demonstrate financial hardship as a result of the COVID-19 pandemic, subject to the safety and soundness of the premium finance agency. This also applies if the premium finance agency issued a non-payment cancellation notice prior to March 29, 2020.

How to Demonstrate Financial Hardship

If you, as an affected policyholder, are unable to make a timely premium payment due to financial hardship as a result of the COVID-19 pandemic, you may submit to your insurer or premium finance agency, as applicable, a statement that you swear or affirm in writing under penalty of perjury that you are experiencing financial hardship as a result of the COVID-19 pandemic, which the insurer or premium finance agency, as applicable, shall accept as satisfactory proof.  Such statement is not required to be notarized.

Questions

If you have any questions regarding your rights under the Executive Order or regulations, please contact your insurer, broker, or premium finance agency.

 

Cyber Criminals Seeking to Capitalize on Coronavirus

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Cyber Criminals Seeking to Capitalize on Coronavirus

 

Criminals prey on unfortunate circumstances, seeking to capitalize on victims during times of panic and hardship. Unfortunately, the coronavirus disease 2019 (COVID-19) pandemic is no exception.

The Cybersecurity and Infrastructure Security Agency (CISA), part of the U.S. Department of Homeland Security, told individuals to be vigilant about scams related to COVID-19.

Cyber criminals have been known to pose as charities or legitimate websites to lure victims into sending money or revealing personal information. Individuals should scrutinize any email, text or social media post related to COVID-19 and be cautious when clicking any links or attachments.

CISA offered specific guidelines for individuals to avoid being scammed online:

  • Avoid clicking links from unsolicited emails, and be wary of email attachments.
  • Use trusted sources when looking for factual information on COVID-19, such as gov.
  • Never give out personal or financial information via email, even if the sender seems legitimate.
  • Never respond to emails soliciting personal or financial information.
  • Verify a charity’s authenticity before making any donations.

It’s not always easy to disregard messages from senders that seem reputable, like banks. If individuals have any doubts about an email from a seemingly legitimate source, they should navigate to the organization’s website and use the contact information there to reach out. Individuals should never respond to the initial message.

 If individuals have any doubts about a message’s sender, links or attachments, they shouldn’t click anything in the message.

What Can Employers Do?

Employers should consider notifying employees about the existence of these COVID-19 cyber scams. Especially during times of crisis, scammers will pose as reputable sources and use fear to solicit personal information. Employers should also communicate best practices so employees know how to respond to such solicitations.

It may also benefit employers to back up data and bolster network protections in case an employee clicks the wrong link and compromises the entire system.

Speak with Schechner Lifson Corporation for more cyber security guidance.

Key Person Disability Insurance

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Protect Your Key Assets

 

Most organizations employ at least one individual who is essential to the company’s success. This person may be a partner, majority stockholder or an individual with expertise that is unmatched throughout the rest of the company. If this person’s exit from the company is planned, such as retirement or voluntary termination, then you can prepare for the loss and take the necessary precautions to minimize the impact. However, if the departure is unplanned due to a disabling accident or another unexpected occurrence, then the company is exposed to financial risks. Consider key person disability insurance to offset your risk. This insurance solution can protect your organization’s solvency in the event that you lose the key person or people without warning, and also the investments made by lenders and investors to the company.

Who Needs Key Person Disability Coverage?

Your company may take out key person coverage on you if you fall within the top 20 percent of the company in terms of salary. Of course, before your company takes out a policy, you must consent to the coverage. If you fall into any of the descriptions listed below, you may want to bring up key person disability coverage for consideration with your employer or—if you own the business—with your employees. Key person disability coverage is crucial for the following:

  • Employees who would be extremely difficult, time-consuming or expensive to replace
  • Highly skilled employees with unique training or skills
  • Employees with exclusive ties to key clients, like sports stars
  • Employees who are company leaders and have irreplaceable knowledge
  • Small business owners who would face financial hardship in losing a key staff member, employee or client

How Does It Work?

Here are the basics of key person insurance:

  • The employer pays the premiums and serves as the beneficiary in the event of the employee’s disability.
  • Tax-free dollars from the policy can be put towards finding, hiring and training a replacement employee, compensation for lost business during the transition and/or financing timely business transactions.
  • The policy is used to protect the business, not the key employee—in the event the key person becomes disabled, the policy proceeds can be used by the company for any purpose.
  • Premiums are based on several factors, including the key employee’s age, physical conditions and health history. The amount of coverage also affects the premium.

In addition to proper coverage, create a business continuation plan that outlines how your business will function if you lose key employees.

Why Do I need Life Insurance?

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Why Do I Need…
Life Insurance?

Life insurance isn’t a pleasant thing to think about, and it may seem like an unnecessary expense. But if you have dependents who rely on you for financial support, then life insurance is really about protecting them in case something happens to you. Your designated beneficiary would collect a financial benefit upon your death.

Youth minister Preston Newby and his wife, Tara, met during college and were soon married. After visiting their local insurance agent to purchase auto and renters insurance, they decided to look into life insurance policies. With a 19-month-old son and another child on the way, life insurance policies made a lot of sense in case anything ever happened to either of them. Unfortunately, this worst-case scenario became reality a couple of months later.

While driving to Canada to visit Tara’s parents, a group of cars up ahead of the Newbys slammed on their brakes and veered to the right side of the road. After coming to a stop, Preston hopped out of the car to find out what happened. One of the cars had hit an elk, and when Preston realized a passenger was bleeding, he ran back to his car to tell Tara to dial 911. As she reached for her phone, a car flew by and hit Preston, killing him instantly.

Thanks to the life insurance policy the Newbys purchased months earlier, Tara was able to pay off the family’s existing debt and provide for her two young sons after Preston’s death.

Whether you are 25 or 55, a life insurance policy gives you the peace of mind that should the worst happen, your loved ones will be taken care of.

Even if you already have life insurance through your employer, you may be underinsured. Call Schechner Lifson Corporation today—we can work with you to ensure that there aren’t any gaps in your current coverage.

SECURE Act (Setting up Every Community for Retirement Enhancement

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SECURE Act (Setting up Every Community for Retirement Enhancement) signed into law December 20, 2019 is the biggest piece of retirement plan legislation since the Pension Protection Act of 2006. The Act is designed to:

Encourage employees to save more for retirement by

• Repeal of age limitations for IRA contributions
• Moved the required beginning date for Defined Contribution Plan (includes 401(k) Plans, Profit Sharing Plans and IRAs) from 70 ½ to Age 72
• Make retirement savings available to more people by expanding 401(k) employee coverage to part-time employees working 500 hours annually for the past 3 years
• Requires lifetime income disclosures in addition to simply showing your account balance
• Makes it easier for your employer to offer lifetime income options

Encourage more businesses to offer a retirement plan to their employees

• Tax credit for retirement plan start-up costs
• Makes retirement plans affordable for small businesses

The Act also eliminates “Stretch” IRAs with certain exceptions which include a surviving spouse and disabled/chronically ill beneficiary. We do have some ideas for stretching the IRA wealth into the third generation. Contact Michael Schechner (michaels@slcinsure.com) for more information.

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