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Why Business Interruption Insurance Is Important
To ensure the survival of a company, business interruption insurance is a valuable tool. Although some companies may never use it, having this coverage can be the difference of recovering from a detrimental event or closing the doors forever.
Business interruption coverage is just as important for any business as flood insurance is for an oceanfront business. Most people would never start a company without insuring their property and inventory from storms, vandals and perils.
Fires, mold, floods and even injury lawsuits may cause a business to close its doors temporarily, and the building or machinery may be unusable for some time. Business interruption insurance is added to a property insurance policy. After any type of disaster, shutting down the business costs the company a considerable amount of money in lost revenue each day. When this happens, customers start going to competitors. In some instances, they may be less likely to return even if the business reopens in a timely manner and offers incentives for returning.
Business interruption insurance covers any lost income if the company must shut down the building. Estimated earned revenue is based on average calculations that use the past year's financial records. Also, this type of insurance covers expenses that still exist without operations continuing. For example, the electricity may be left on, and that would be covered.
When adding business interruption insurance to a property policy, be sure that the limits are enough to cover the company's expenses for at least a week or more. This amount may need to be adjusted each year for a new and growing business. Many people make the mistake of buying insurance for an inadequate time period. In some cases, it takes a few weeks to resume operations. In most cases, business interruption coverage does not start until 48 hours after the business shuts down.
The cost of business interruption coverage depends on the nature and location of the business. For example, a real estate business located in an area that receives plenty of rain would cost less to insure than a restaurant that is located in a known fire risk zone. The added risk of ovens and stoves would increase the cost further. Also, insurers consider how easily a business could operate elsewhere. While the real estate company may be able to work from a temporary office location, the restaurant would not be able to easily resume offsite operations.
There is also coverage for extra expenses. This type of insurance reimburses a company for the amount of money spent that exceeds average operating costs. If it helps lower business interruption costs, extra expenses coverage will be paid in most instances. For some people, extra expenses coverage by itself may be sufficient instead of business interruption insurance. However, this only applies to businesses with workers who can work from home, at a library or at another location.
Speak to your agent about your insurance coverage and questions at HALO Insurance and Benefits Group 314-351-HALO(4256).
How Much Umbrella Liability Protection Do You Need?
One million dollars is the minimum amount of coverage for an umbrella policy. However, insurance companies usually offer these types of insurance policies in one million dollar increments and often go up to five or ten million.
Some companies that target high net worth individuals may offer up to fifty million or more in coverage. Most people who purchase an umbrella policy choose the one million dollar amount, but many choose two million dollars or more. A rough estimate of what it costs for the first million is about $200 to $250 a year, but can be higher if you have more than two cars, young drivers or points on your record. While each incremental amount above the first million is slightly less, increments exceeding ten million can be higher.
The more coverage you have, the more bullet proof you will be if you become liable for a catastrophic incident. One of the best aspects of this coverage is that it's very inexpensive. It's important for those considering this type of insurance to avoid cutting corners. Shortcuts cannot be afforded when all accumulated assets from an entire lifetime are in question. Some believe that all they need is coverage for whatever their net worth is, but settlements and judgments can go beyond someone's assets because damages are never limited to someone's net worth.
It's also important to protect future wages from garnishment. The future income of an individual who doesn't have ample coverage can also be jeopardized. If the person who is injured earns a considerable amount of money, that individual is more likely to be a target of the best liability attorneys.
Although one million may appear to be more than enough coverage, the total cost of liability claims can multiply quickly. In today's world, a million isn't much. It's not unusual to read in the news of settlements over well over five million. Losing the ability to earn an income and facing a lifetime of injuries or medical care can easily total beyond several million dollars over the span of an individual's lifetime, not to mention situations where multiple people are injured, which would multiply the total damages. It's important to consider what amount would be acceptable for various conditions. For example, ask yourself how much you would settle for if you were paralyzed and unable to work the rest of your life.
Anyone who has something to lose should have at the very minimum a two million dollar umbrella, but if you really have a lot to lose and don't want to gamble with your life's wealth, your options are at least a five million dollar policy, if not more. The coverage you get should be discussed with your agent at 314-351-HALO(4256), and it may not be a bad idea to get input from a personal injury attorney as well.
Safety and Health Tips for Halloween and Harvest Day Celebrations
Harvest Day and Halloween celebrations are fun for children who enjoy wearing costumes and eating treats. The Centers for Disease Control encourages adults to plan parties with healthy snacks and to pass out healthy treats to kids on Halloween. The CDC also emphasizes the importance of safety during these Autumn celebrations.
To make parties fun for guests and to promote safety for trick-or-treaters, use the following helpful tips:
- Make sure an adult accompanies children who go trick-or-treating.
- Make sure all knives and swords that accompany costumes have soft, flexible and short blades.
- When children return from trick-or-treating, examine their treats for choking hazards or packaging that may have been tampered with.
- Put reflective tape on costumes or bags to make sure motorists see trick-or-treaters.
- Test makeup on a small area of a child's face prior to applying it for Halloween, and be sure to remove it completely before the child goes to bed.
- To stay more visible and to see others, use a flashlight while going trick-or-treating.
- Do not walk in the street. Try to use sidewalks if they are present.
- Whenever possible, use crosswalks to cross the street. Look twice before crossing.
- Reduce eye injury risks by not wearing decorative contact lenses.
- Make sure costumes fit children properly to avoid falls and obstructed vision.
- Do not allow children to enter strangers' homes.
- Allow children to wear only flame-resistant costumes, and make sure they do not walk by lit pumpkins, candles, luminaries or other decorations with open flames.
- Never allow children to eat homemade treats. All treats should be wrapped in a form of factory packaging.
Any homeowners planning a party for guests or expecting trick-or-treaters must take steps to ensure their guests stay safe and healthy. It is best to serve healthy snacks whenever possible. For home parties, provide fresh fruits, vegetables, cheeses and low-calorie snacks. Since sodium and sugar can be harmful for many guests, make sure any packaged snacks are low in both ingredients. For trick-or-treaters, buy healthy snacks that come in factory packaging.
When planning games for a kids' party, pick games that require physical exercise. To keep kids' attention, plan several games to ensure they reach their daily dose of 60 minutes of exercise. All common areas, hallways, sidewalks and stairways should be free of debris or runners that may cause guests to trip. Although it is best to use flameless candles and luminaries, keep any decorations with open flames out of the reach of children and out of areas where they could be hazards. Do not leave them unattended. As party guests leave, remind them to watch the streets carefully to avoid hitting any trick-or-treaters. For adult-only parties, do not let guests drive home if they have been drinking. Call a cab for them, allow them to sleep over or ask another sober driver to take any intoxicated guests home. Check twice for any hazards on the property to avoid lawsuits and increases in homeowners insurance premiums.
Call us today to review your coverage with our licensed agents at 314-351-HALO(4256)
Counting On An Inheritance For Your Retirement? You May Be Disappointed.
If you are counting on an inheritance as a critical part of your financial plan, you'd better make sure your parents are on board with the same idea because chances are good that they aren't.
The survey found that, on average, U.S. retirees expected to pass on about $175,000, on average, to their children and grandchildren. Sure, this is a decent sum of money, but it is nowhere near enough to provide anything close to a secure retirement to a married couple that has spent their entire working years neglecting their own retirement saving and planning.
What's more: Only 56 percent of American retirees surveyed expect to be leaving an inheritance at all.
Inheritance may be under pressure for a variety of reasons - and not just because older Americans simply want to blow the family wealth on Caribbean cruises and casino vacations.
Low interest rates have been good for younger generations who have been able to get cheap home loans but they have been very tough on older Americans. They have been earning razor thin returns on bank CDs and other forms of saving traditionally popular with risk-averse senior citizens for generations. Twenty years ago, retirees could earn 6-8 percent on CDs. Today, a 5-year CD pays an average yield of 1.66 percent.
So where a $1 million nest egg once generated $70,000 to $100,000 in income per year on minimal risk, the same portfolio now generates income of around $10,000 to $20,000 per year. The difference has to come from somewhere: Seniors are increasingly forced to spend down principal to live on - and that eventually drains inheritances.
Americans are living longer than ever before. One in three of today's 65-year-old women can expect to live to age ninety. If two 65 year olds are married, there is an 18 percent chance that one of them will live until age 95.
If you don't take charge of your own retirement, you may well be in the unhappy position of having to borrow money from your parent or parents to pay for a plane ticket to come to their 95th birthday party.
And you may have to take off work.
Long-term care costs
Increasing long term care costs including adult day care, assisted living facilities, skilled nursing facilities and hospice care are also eating up many older Americans' nest eggs. According to the 2016 Genworth Cost of Care Survey, the cost of an assisted living facility has gone up to $43,539 per year, while a semi-private room in a long term care facility now costs $82,125 per year, on average, with many areas costing even more.
Medicaid will cover some of these costs, but only after almost all a family's potential inheritance is used up. If the individual receiving benefits owns a home, state officials may put a lien on the home, reimbursing the state for benefits being paid on the beneficiary's behalf before sales proceeds are released to heirs.
Many seniors have pledged their homes to lenders in exchange for income, essentially borrowing against the equity in their homes in reverse mortgage plans. In many cases, these reverse mortgages are necessary to provide needed income for older Americans to live on but when you inherit the estate, the home may well have to be sold to pay back the reverse mortgage loan. You may not get the inheritance you were planning on.
The responsible course of action is clear: Americans of all generations should take responsibility for their own retirement planning and security. If an inheritance comes it comes, but Americans should not be banking on it. Consuming your entire income is a dangerous plan. Act now to begin saving for your own future, and don't rely on parental wealth to bail you out.
Please call us today and schedule a meeting, 314-351-HALO(4256)