Business Insurance Needs
Table of Contents
Chapter 1: The Basics |
6 |
Group Insurance Principles |
6 |
Eligible Groups |
6 |
Single Employer Groups |
6 |
Multiple Employer Trusts (METS) |
7 |
Unions, Associations, and Other Groups |
7 |
Creditor-Debtor Groups |
7 |
Underwriting Advantages |
8 |
Keeping Current With Business Needs |
9 |
The Informed Consumer |
10 |
Providing a Quote |
11 |
The Contract Participants |
13 |
The Insurer |
13 |
The Insured, Insurance Contract, Underwriting and Rating |
14 |
Finance, A Public Interest |
15 |
Insurance Helps Social Values |
16 |
Affected with the Public Interest |
18 |
The Insurance Contract |
18 |
Defining the Contract |
19 |
An Agent’s Responsibility |
20 |
The Application for Coverage |
20 |
The Binder |
22 |
Contract Elements |
24 |
Contract Agreement (Offer & Acceptance) |
24 |
Competent Parties |
26 |
Insurer Incompetency |
27 |
Public Interest, Consideration |
28 |
Contract Characteristics |
28 |
Adhesion |
29 |
Unilateral Contracts |
30 |
Good-Faith Contracts |
31 |
Warranties |
32 |
Representations |
34 |
Concealment |
35 |
Principle of Indemnity |
37 |
Insurable Interest and Subrogation |
38 |
Subject, Owner & Beneficiary |
39 |
|
|
Chapter 2: Managing Risk |
41 |
Chance of Loss |
41 |
What is the Degree of Risk? |
42 |
Basic Definitions |
43 |
Peril |
44 |
Hazard |
44 |
Loss |
44 |
The Insurance Company’s Role |
45 |
The Risk Manager |
47 |
The Group Buyer |
49 |
The Seller or Advisor |
49 |
Group Insurance Administrators |
50 |
The Risk Management Process |
51 |
Business Management |
51 |
Worksheet Example |
53 |
Identifying Potential Loss Exposures |
53 |
Risk Transfer |
54 |
Retaining Risk |
55 |
Risk Avoidance |
56 |
Risk Reduction |
57 |
A Recap |
57 |
The “I am Insurance Poor” Defense |
58 |
Reducing Hazard |
59 |
Reducing the Loss |
59 |
What Is Indemnity? |
60 |
Insurers Face Their Own Risks |
60 |
|
|
Chapter 3: Types of Insurers |
65 |
Private and Government Insurance |
65 |
Private Insurers |
65 |
Life Insurance |
66 |
Property and Liability Insurance |
66 |
Government Insurance |
67 |
Voluntary Government Insurance |
67 |
Compulsory Government Insurance |
67 |
Mutual Companies |
68 |
Assessment Mutuals |
68 |
Non-Assessment Mutuals |
71 |
Conversions |
71 |
Reciprocal or Inter-Insurer Associations |
72 |
Stock and Mutual Underwriting |
73 |
Factory Mutuals |
74 |
Superior Agents and Brokers |
75 |
|
|
Chapter 4: Coverage Options |
78 |
Coverage Checklist |
78 |
Working From a Standardized Format |
79 |
Property Insurance |
80 |
Deductible Versus Self-Insured Retention |
80 |
Replacement Cost Versus Actual Cash Value |
81 |
Functional Replacement Cost |
81 |
Coinsurance Versus Agreed Amount |
82 |
Property Coverage Forms |
83 |
Earthquake, Flood Insurance |
84 |
Building Ordinance and Law Coverage |
84 |
Glass, Construction or Builder’s Risk |
85 |
Pollution Coverage, Reporting Form Coverage |
86 |
Property in Transit |
87 |
Business Income, Extra Expense, & Rent Loss |
87 |
Blanket Coverage, Business Owner’s Policy (BOP) |
88 |
Locations of Coverage |
89 |
Liability Insurance Coverage |
89 |
General Liability Forms |
89 |
Aggregate Limits |
92 |
No Policy Covers Everything |
93 |
Claim Payments |
93 |
Deductibles |
94 |
Costs of Defense |
94 |
Payment Approaches |
95 |
Umbrella and Excess Liability Policies |
95 |
Errors and Omissions Coverage |
96 |
Ostensible Authority |
97 |
Serving as a Director or Officer |
101 |
Underground Storage Tanks |
102 |
Auto Coverage |
102 |
Coverage Symbols |
102 |
Uninsured & Underinsured Motorist Coverage |
103 |
Coverage for Rented Vehicles |
103 |
Garage Liability |
104 |
Garage Keeper’s Liability |
105 |
Actual Cash Value or Stated Amount |
105 |
Accessories |
106 |
Miscellaneous Insurance Coverage |
106 |
Crime Coverage |
106 |
Boiler and Machinery Coverage |
107 |
Inland Marine Insurance |
107 |
Ocean Marine, Electronic Equipment Coverage |
109 |
Utilizing a Checklist |
110 |
|
|
Chapter 5: Evaluating A Business |
119 |
General Information |
119 |
Historical Information |
120 |
Insurance Policy History |
121 |
Current Operations |
122 |
Property Information |
123 |
Checklist of Enclosures, Vehicle Schedule |
125 |
|
|
Chapter 6: Workers’ Compensation |
127 |
Calculating Workers’ Compensation Premiums |
129 |
Applying Payroll Classifications Properly |
129 |
Experience Modification Factors |
130 |
Minimizing Experience Modification |
130 |
Loss Control Services |
131 |
Dividend Programs |
133 |
Dividend Types |
133 |
Comparing Dividend Proposals: Terminology |
134 |
Retention, Loss Conversion Factor (LCF) & Loss Development Factor (LDF) |
134 |
Incurred But Not Reported (IBNR) |
135 |
Dividend History Matters |
136 |
Commissions |
137 |
Good Accounting Is a Must |
137 |
Other Considerations |
138 |
Illegal Immigrants, Owners and Officers, Independent Contractors |
138 |
Volunteers, Out of Territory Employees |
139 |
Workers’ Compensation Coverage Checklist |
140 |
|
|
Chapter 7: Group Health Insurance |
142 |
Terminology |
142 |
Defining Group Insurance |
149 |
The Group Contract |
150 |
Experience Rating |
150 |
Group Underwriting |
151 |
Group Classification, Individual vs Group |
152 |
Franchise Health Insurance, Blanket, Group Credit Insurance |
153 |
Self-Insuring |
154 |
Patient Protection & Affordable Care Act |
158 |
Guaranteed Issue, Young Adults, Individual Mandate |
159 |
Health Insurance Exchange, Medicare & Medicare Reforms, Small Business |
160 |
Employer Mandate |
161 |
Changes to the Affordable Care Act |
162 |
Short-Term Insurance, Association Health Plans |
163 |
Pre-tax Dollars, Limiting Consolidation |
164 |
Other Changes, Timeline |
165 |
Disability Insurance |
166 |
Short-Term Disability (STD) |
170 |
Long-Term Disability (LTD) |
171 |
Disability Terms, Benefit and Waiting Period |
175 |
Cost of Living Escalator |
176 |
Renewable & Non-Cancelable Contracts |
176 |
Benefit Coordination |
177 |
Marketing Disability Insurance |
178 |
Long-Term Nursing Care Insurance |
178 |
Life Insurance for Long-Term Care Costs |
180 |
Rising Costs for LTC Care |
183 |
How Costs Are Covered |
184 |
State Statutes on Long-Term Care Group Insurance |
185 |
Premiums, Long-Term Care Benefits |
187 |
Activities of Daily Living |
188 |
Asset Protection, Integrated Long-Term Care Policies |
189 |
Assisted Living Benefits, Marketing Group Plans |
190 |
|
|
Chapter 8: Terrorism Risk Insurance Act (TRIA) |
191 |
Defining “Act of Terrorism”, TRIA |
191 |
President Bush Signs TRIA |
193 |
The Role of Terrorism Insurance |
193 |
Policy Restrictions |
195 |
Business Interruption Insurance |
195 |
Workers Compensation and Other Coverage |
197 |
Coverage under Terrorism Insurance |
197 |
|
|
Chapter 9: Key Person Insurance |
202 |
Buy-And-Sell Agreements |
202 |
Sample Buy-Sell Agreement |
204 |
Final Checklist for Buy-And-Sell Agreements |
213 |
Death & Beneficiary Arrangements |
214 |
Loss of Interest |
214 |
Cross-Purchase Agreements |
215 |
Wait-and-See Arrangements |
216 |
Key Person Principle |
216 |
Insurable Interest for Life Insurance |
216 |
Health Insurance on Key Employees & Owners |
218 |
The Small Company’s Exposure, Loss of the Small Business Owner |
220 |
Loss of the Small Business Owner |
220 |
Planning Ahead for Death or Disability |
224 |
|
|
Chapter 10: 401(k) Plans |
226 |
Employer Incentives to Offer 401(k) |
226 |
Various Plans Exist |
227 |
No One Plans to Fail |
229 |
Retirement Needs Worksheet |
230 |
Too Much To Cover in One Chapter |
232 |
401(k) Plan Elements |
232 |
How the 401(k) Plan Works, Eligibility |
235 |
Contributions, Plan Vesting |
236 |
Company 401(k) Fund Matching, 401(k) Loans |
237 |
Fund Withdrawals |
239 |
IRS Section 72(t) |
242 |
Non-Discrimination Testing |
242 |
401(k) Plan Investing Options |
243 |
Fund Rollovers |
245 |
At Retirement |
247 |
In Conclusion |
248 |
|
|
Chapter 11: Business Ethics |
250 |
Cooperation |
250 |
Promises |
252 |
After the Sale |
255 |
Educated Professionals |
255 |
Why Don’t Agents Interact? |
258 |
Setting Goals |
259 |
Recognizing Potential Business Risks |
260 |
A Culture of Shortsightedness |
265 |
It’s A Jungle Out There |
266 |
Following a Code of Ethics |
268 |
Promoting Ethical Conduct |
270 |
Choosing The Ethical Path |
271 |
Identifying With Others |
273 |
Test Your Own Ethical Standards |
274 |
What Does An Ethical Agent Look Like? |
275 |
Initiating the Appointment |
276 |
Replacing Another Agent’s Policies |
278 |
Rolling Clients From One Insurer to Another |
278 |
Information Provided, The Client’s Best Interest |
279 |
Servicing An Existing Policy |
280 |
Public’s Perception of Agents |
282 |
Developing a Sense of Professional Pride |
282 |
Education is Not Only Required – It Also Makes Sense |
284 |
Midwest Zone Agreement (Education) |
285 |
Whistleblower Protection Act |
287 |
From a Practical Standpoint |
291 |
Final Page of book: |
300 |
Email: mail@uiece.com
Web address: www.uiece.com