— by Cathy Daugherty
After more than 20 years in the insurance industry, and 15+ as a NAWBO member, I’ve gained a lot of insight by watching the industry, listening to clients, talking to legislators, and devoting thousands of hours to training for my licenses and certifications. From this perspective, let me share some thoughts on what business owners need to know about insurance.
Don’t offer anything on your website that you don’t want to pay to insure.
Can a simple BOP (Business Owner Policy) work for you and your business? Do you also need a Product Liability policy? Do you have expensive equipment or goods to insure? If you operate a very specific, technical, or ‘dangerous’ business, this can get expensive. I’ve seen a business close when the Product Liability insurance changed. I had a photographer cancel a big project because she couldn’t pay for insurance and storage required by the client.
Know who you’re doing business with. Do they have their own criteria?
Everyone thinks they want to do business with big corporations or the government. Really? They are very slow to pay and their paperwork and insurance requirements could make your business no longer profitable.
Now that you are paying your own premiums, look into saving with high deductible plans.
Many of you came from corporate jobs where your health insurance, dental plan, E&O, and disability policy were completely or partially paid for. Now that you’re paying the premiums, look into cost-saving high deductible plans and HSA plans. You may also consider a bit of “self-insurance.”
What are the true costs and concerns of having employees?
Do you know what workers compensation costs? How about the penalties for 1099-ing an actual employee? What does a payroll service or software cost? What are the regulations and penalties for not paying the payroll taxes correctly and on time? These are things a business owner needs to be aware of.
Do you really understand Obamacare, PPACA, HIPAA, COBRA, etc.?
New legislation and compliance requirements for business are a moving target. You need to talk to experts to determine what you must do and how to calculate the costs. Some requirements depend on the size of a business and only pertain to larger businesses.
If I can only convey one caution, it’s this: don’t guess. There are professionals available to help you unravel the maze of requirements. Use us. You must be an expert in your own business, but you can rely on others to be experts on insurance and other business requirements. That’s what we do for each other here in NAWBO-OC.
Cathy Daugherty is a partner at Bridgeport Benefits, a full service employee benefits consulting firm. Cathy is a 20-year veteran of the insurance industry and holds the Health Insurance Professional (HIP) Designation. She is also a past president of NAWBO-OC.