Business Insurance

What is a Qualifying Event and Why Does It Matter?

Posted on by Shield Insurance Agency

Shield Insurance Blog | Qualifying Event | Health Insurance | Contact Bri Today!

The terms Qualifying Event, Special Enrollment Period, and Open Enrollment Period get tossed around in conversation when discussing both employer-sponsored benefits and individual health insurance plans.

The timeframes in which you can alter your benefits through a company or for your own individual policy are limited to certain times or events of the year. For employer-provided benefits, the time of year to make changes, add, or remove coverage for yourself and family members is called open enrollment and is managed by Human Resources. It’s “open” because these adjustments are made at the employee’s discretion. If you purchase your own health insurance through a private insurance company or the Health Insurance Marketplace (Obamacare), open enrollment takes place each year starting November 1st and ending December 15th. Any changes from this timeframe go into effect as of January 1st of the following year. Outside of these timeframes, your benefits are locked in until the next enrollment period. But what happens if you need to make changes at another time due to a qualifying event?

What is a Qualifying Event?

A Qualifying Event is a life circumstance that allows someone to make changes to their insurance coverage outside of open enrollment for both employers and individuals. A Qualifying Event is a reason to have a Special Enrollment Period or midyear change. The allowed timeframe for reporting these changes or updating coverage is between 30-60 days from the date of the event. If you have missed this timeframe, you may not be allowed to make changes. Some examples of qualifying events are birth, marriage, divorce, or loss of other coverage. If you have questions about your own coverage or coverage through an employer, we are here to help!

If you have any questions or would like to explore your options for health insurance, it is always a good idea to contact your insurance carrier or speak with an insurance agent. Shield Insurance Agency represents over 40 insurance companies and can provide you with a free quote and personalized advice. Contact Shield Insurance Agency at (616) 896-4600 for a free quote today or start the quoting process by visiting this LINK and an agent will be in touch soon.

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Healthcare Insurance Coverage for Business 2021

Posted on by Shield Insurance Agency

The pandemic has made everyone acutely aware of the need for healthcare Insurance coverage. Small businesses struggling to survive are challenged to find ways to offer health coverage as a fringe benefit to employees. Premium costs are high.

Nonetheless, there are several ways in which small employers can help employees get coverage for the upcoming year.

5 Things to Know About Healthcare Insurance Coverage in 2021

Don’t wait until the last minute to explore your options. Here are 5 things to keep in mind.

1. Coverage Requirements for ALEs

If you have at least 50 full-time and full-time equivalent employees, you are an Applicable Large Employer (ALE) subject to the employer mandate under the Affordable Care Act. This means you must offer minimum essential health coverage that’s affordable to your full-time employees or pay a penalty. What’s affordable Healthcare Insurance? The IRS has released this information for 2021. The cost to employees can’t be more than 9.83% of household income in 2021.

2. HSAs

Health savings accounts (HSAs) allow individuals to cover their out-of-pocket costs. But to make contributions—whether by employers or employees—to such accounts, individuals must be covered by a high-deductible health plan (HDHP). For 2021, this means insurance with a minimum deductible of $1,400 for self-only coverage or $2,800 for family coverage and a cap on out-of-pocket expenses (deductibles, co-payments, and other amounts other than premiums) not exceeding $7,000 for self-only coverage or $14,000 for family coverage.

If you have group insurance that is an HDHP, then you can decide whether to contribute to employees’ HSAs. If not, then employees can choose to make deductible contributions to their accounts for 2021. More information about HSAs is in IRS Publication 969.

3. HRA Options

Health reimbursement arrangements (HRAs) facilitate tax-free reimbursements to employees. While the business can deduct these reimbursements, they aren’t subject to employment taxes. For 2021, consider these HRA options:

  • Qualified small employer health reimbursement arrangements (QSEHRAs). These plans reimburse employees for premiums on their individually-obtained coverage up to a set dollar limit ($5,250 for self-only coverage or $10,600 for family coverage in 2020).
  • Individual coverage health reimbursement arrangements (ICHRAs). These plans also reimburse employees for their premiums on individually-obtained health coverage. The law doesn’t cap the reimbursement; it’s up to the employer to fix this amount (on a nondiscriminatory basis).
  • Excepted benefit health reimbursement arrangements (EBHRAs). These plans help pay for certain benefits, such as dental or vision care, not otherwise covered by a general insurance policy. Reimbursement is capped up to a set dollar amount. The cap for 2021 has not yet been announced (it was $1,800 for 2020).

More information about HRAs is also in IRS Publication 969.

4. Premium-only Cafeteria Plans

If you don’t provide a Healthcare Insurance plan or do have a plan (including an HRA) but you don’t pay all of the cost, you can enable employees to pay all or the balance of premiums on a pre-tax basis. The plan must offer employees a choice between cash or reimbursement for health insurance coverage. If they choose the coverage, the amount of what they’d pay for premiums that are withheld from their paycheck is not treated as taxable compensation to them. There are no employment taxes on this benefit. If, however, they choose the cash option, it’s taxable compensation.

5. Notice Requirements

Employers offering a Healthcare Insurance plan are required to give notice to employees about their participation and what’s involved. Depending on the plan, notice may include providing a summary plan document.

Generally, notice is required to be given 90 days before the start of the plan year. So, if the plan year starts on January 1, 2021, notice must be given by October 3, 2020.

Conclusion

Health Care for the Latino population with Shield Insurance Agency

Start shopping now for Healthcare Insurance. Contact the Shield Agency expert Carlos Garcia or another tax advisor to find ways to make this benefit available to employees without busting your budget. And be sure that whichever option you use that you do so in compliance with the law.

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Is Work Life Insurance Enough?

Posted on by Shield Insurance Agency

Is the life insurance you have at work enough? 3 ways to tell

If you work full-time, chances are you have some life insurance through your employer — 75% of full-time workers in the U.S. have access to life insurance as an employee benefit and 98% of those workers are covered.1 But is it all the life insurance coverage you need?

Many people mistakenly think it is, even though they could benefit from having their own life insurance outside of work.

Here are three things to consider:

1. Is it enough coverage?

If your employer offers life insurance and you signed up for it, at least you have some coverage. That’s better than no coverage. But it might not be enough to give your family the funds they need to make ends meet if the worst happens to you.

Research shows that one of every three families would be in financial trouble in less than one month if they lost a primary wage earner — and the percentage grows to 70% within six months.2

You can help your family avoid this hardship by making sure you have enough life insurance to replace your paycheck as long as needed (for example, until the kids leave home or the mortgage is paid off).

Your employer may limit the amount of group coverage available to you, leaving you short.

2. You can’t take Life Insurance with you.

Even if you can get enough coverage through your employer, that coverage may end before you want it to — and may end suddenly

Group life insurance is an employee benefit that usually ends when your employment ends. Even if you’re going to a new job immediately, you may not be eligible for benefits right away — if the new employer offers it at all. And, if you lose your job to a lay-off, downsizing, or firing — or if you retire — it might be a while before you can replace the coverage.

If your strategy is to buy individual life insurance later, keep in mind, that your health, driving record, and credit history must remain solid in order to qualify for it. Also, coverage generally costs more as you age.

3. No extra benefits or cash value.

Employer coverage is usually affordable and reliable. But it’s also usually pretty basic, meaning it doesn’t accumulate cash value over time or have any extra benefits under your control

  • Cash value. An individual policy you buy from an insurance agent can last for life — usually up to age 100 or 120 — and, depending on the type of policy, can build up a cash value that you can borrow against or use to pay part of the cost of the policy. Employer group plans don’t offer these options.
  • Extra benefits. These days, many individual life insurance policies offer additional benefits during the living years. These include features that provide part of the death benefit early if the insured person is diagnosed with a terminal illness or needs long-term care. Another feature can extend coverage to others in the family. These extra benefits may carry an additional cost, but that cost may still be lower than stand-alone coverage.

For these reasons, it might be wise to think of employer coverage as a supplement to your own individual policy, instead of relying on it as your only source of life insurance coverage. That puts you in the driver’s seat to choose the type and amount of coverage that’s right for you — and that can be customized to your needs.

1 – National Compensation Survey, Employee Benefits, Bureau of Labor Statistics, 2018
2 – Insurance Barometer Study, LIMRA, 2017

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15 Ways to Stay Focused at Work

Posted on by Shield Insurance Agency

How to Stay Focused at Work

Staying on task can be a challenge at home or at work, and sometimes even more difficult when you’re working from home. In this article, you’ll get 15 tips on how to stay focused at work…

Wait! First I want to watch a video of a honey badger fighting off an anaconda, and a couple of jackals. After that, I’ll get right back to writing about how to stay focused at work.

The lure of interesting things on social media is just one of the challenges to overcome. Here’s how to best that challenge, and others, to stay focused.

15 Ways to Stay Focused at Work

Here are 15 of the best ways to focus at work — especially when you can’t focus!

1. Take Breaks

Sounds counterproductive, right? Shouldn’t you dig in, nose to the grindstone and all that, until the task or project is complete?

Wrong. We are more productive when we take breaks. This is particularly true if the work and breaks are structured. That removes the risk of extending a break. Working towards a scheduled break helps keep your stress levels at bay.

2. Plan Ahead

Having a plan for your workday, and workweek will help you stay on track for the task at hand. Some projects may take half a day, some, half a month. Taking time at the outset to make a plan for the work will help you keep your eye on the prize.

3. Put it on a Calendar

Does the work need to be finished by Thursday at the latest, so it can be shipping Friday morning? With a lengthy project, are there certain target dates within the work? Post it on a calendar, at your desk or on a wall, if multiple employees are involved.

4. Organize Your Work Station

This is key. The time you spend straightening up your work station will pay back in dividends. Organizing your work station will help keep you focused at work.

It can be very distracting to stop working to search for a document or some needed supplies throughout the day. A clean workspace sets the tone for the workday, every day.

5. Reduce Distractions

At work, you can reduce distractions by letting coworkers know that you don’t wish to be disturbed for specified periods of time. You’re free only for emergency calls. If you’re in a busy office, you may have to vacate your desk and find a quiet place to work. Is there an unused meeting room or board room?

If you’re working from home, and you’re home alone, you can take steps as needed to reduce distractions. But if you’re a working parent, working from home with a child who is learning virtually, you are tasked with trying to find a balance.

How can you keep an eye on the kids and be a productive worker at the same time? As advised earlier, schedule break and work time. Make that schedule identical for all who are working from home.

6. Lock Down Social Media

C’mon, admit it. You’ve already watched the video of the honey badger fighting off the anaconda…

FB can help us feel connected, even during this social distancing era. But it can also be a time sucker, keeping you from the tasks of the day and staying focused.

Just as you’ve made a schedule for break and work time, schedule social media or internet surfing time. The best time for that is when the tasks for the day have been completed.

7. Schedule Blocks of Time for Tasks

Each work assignment or project is predicted to be completed in a certain amount of time. As you make a plan for the day or week, block out the anticipated start and completion times of the tasks.

This simple exercise will do more than help you stay focused. It can help reduce your stress level. It can help you find it easier to “turn off your mind” and fall asleep at bedtime.

8. Get Enough Sleep

For all adults between 20 and 60, the recommended amount of sleep per night is 7 hours. Studies have proven that sleep deprivation makes it much, much harder to focus.

Without enough sleep, you’re likely to get angry and frustrated throughout the day. If you haven’t gotten enough sleep, you can recharge with a short – no longer than 20 minutes – power nap.

9. Graze, Eat

See above, “angry and frustrated throughout the day.” There’s a word for it – Hangry, the combo of hungry and angry. You won’t be able to stay focused at work if you don’t take the time to eat, and snack.

But, not just any snack or meal will cut it. Foods high in carbohydrates, sugar and sodium may give you a quick boost. But the quick boost will be followed by a crash.

All things in moderation. Eat and snack sensibly. Stay hydrated with plenty of water. If you’re a coffee drinker, have at it. Studies have shown that small cups of coffee spaced over the workday will help you stay focused.

10. Break Large Projects into Segments

You can lose focus if you feel that you’re not making progress. Rather than simply write down the end goal, break it down into separate parts.

For example, let’s go back to school days and use “Turn in Term Paper” as the end goal. But it seemed to be an overwhelming goal, 20 pages, how could you do it? Well, you did it by doing it in pieces. You organized the main points, you did the research. Then you wrote a draft, worked on that, and finally turned it in.

It’s no different in the workplace. A seemingly insurmountable task looms large. It’s unwieldy, complicated, in the sum of its parts. But if you take those parts one by one, and steadily get each part out of the way, suddenly it’s doable.

11. To-Do List, with Priorities

This fits hand-in-hand with breaking a large project into segments. Making a list is extremely helpful and possibly the one thing that is the most effective tool for staying focused.

Mentally, a detailed list can become a form of reward. One by one, as tasks are accomplished, you get to draw a line through them. Then, with one step of the work done, you can turn your focus to the next task on the list.

12. Know Yourself

Are you a morning person or a night owl? Do you find yourself having more trouble focusing at certain times of the day? Do you seem to lose focus at the same time every day?

One way to find the answer to how to be focused is to recognize your personal strengths and weaknesses. If you know you do your best work first thing in the morning, take advantage of that. Plan to focus on the most complicated or difficult part of your task during your most productive time.

13. Work and No Work Zones

Scheduled work and break times are important. And it’s also important to separate those areas.

Here’s a for instance: You’re working from home and after a couple of hours, head to the kitchen to get a cup of coffee. You take that steaming mug back to your work area, sipping away at it as you review your work.

Well, that’s not a break. Sitting down in the kitchen for 15 minutes to drink the coffee is a break. In order to get full advantage of a break, it needs to be a full break away from work. Keep those zones separate.

14. Pictures and Words

Remember that organized work area? Now add some bling, in the form of inspirational photographs and words.

The photographs can be family members or pets – to remind yourself who your work is supporting. Or you might display a photograph of someone in your field who you admire.

What about words? Inspirational quotes can be a way to boost your spirits when the way gets challenging.

“It has been my observation that most people get ahead during the time that others waste.” Henry Ford

“Life is either a daring adventure, or nothing.” Helen Keller.

You can choose any pictures and words for workspace inspiration. You can change them freely, as you wish. Reminding yourself of key people and thoughts/ideas is one of the ways to stay focused on the importance of your tasks.

Discover our Motivational Quotes for Business.

15. Reward

One sure way to lose your focus for new tasks is to skip taking time to enjoy the completed task. You did it! You’re not resting on your laurels, but you’re savoring the moment.

If you’re a manager or boss, this is the time to acknowledge and thank the team of workers, who stayed focused right along with you. Before you turn everyone’s eyes to the next project, take time to reward yourself and others for a job well done.

Mental Focus FAQs

People often ask questions about specific things that can help them focus. In general, mental focus is tied to the ability to withstand distractions. You can either remove distractions or learn to focus despite distractions.

What are some foods that help you stay focus?

Several foods can improve focus and mental alertness. Those foods include blueberries, fatty fish, green tea, flaxseed, nuts, and dark chocolate. But it’s important to note chowing down on blueberries and nuts during a break at work might not help – to aid with focus, these foods need to be part of a person’s regular diet.

Will meditation help me focus?

Yes, meditation can improve focus. Here’s why. During meditation, a person learns to relax, remain calm, and focus the mind on a simple activity, such as deep breathing. In other words, meditation helps train your mind to focus.

Here are the Best 10 Meditation Apps for Stressed Out Entrepreneurs.

How many hours of sleep do I need to work productively?

Experts say humans need 7 hours of sleep a night. That’s the figure for all adults between the ages of 20 and 60.

Here are our Top Tips for a Better Night’s Sleep and Increased Work Productivity.

Does music help you stay focus?

Learning to play a musical instrument helps a person learn to focus. Learning to play an instrument requires training, concentration and focus – all things that can carry over into career achievement.

The answer to whether listening to music helps you focus depends on an individual’s feelings. For some, music is soothing and is little more than background sounds. For others, music can be distracting and take away from the ability to focus.

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Protecting yourself after a data breach

Posted on by Shield Insurance Agency

A data breach is becoming more and more common. With over a billion records exposed since 2005, it’s likely that — if it hasn’t happened already — you’ll eventually rip open a letter to find that your data has been compromised and your personal information is at risk.

So what do you do next?

Just because you received this letter does not mean that you’re the victim of identity theft, it just means that your data was exposed, a data breach. However, there are five main steps you can take to better ensure that you come out of the situation with your identity and finances intact.

Breathe and read.

The first step is to not panic. That may sound counter-intuitive, but the best thing you can do is take a deep breath and thoroughly read the letter. The letter will explain what information is at risk, how the data breach occurred, and how you can get more information. When you’ve finished reading it over, keep it in a safe place in case you ever need to prove that your data was exposed.

Let your bank, mortgage lender, and other financial organizations know that your data has been compromised. This way, they can keep an eye out for suspicious activity.

Monitor billing and financial statements.

You must be on the lookout for fraudulent activity, too. Your bank or credit card provider may have text or email alerts to help you monitor your account, but be sure to check your statements regularly. And don’t just look for big withdrawals. Small purchases could be criminals seeing what they can get away with.

Check your credit report.

You can get a free credit report once per year. So after about 30 days, request your copy and check for anything suspicious. If you would like some extra protection, you may want to sign up for a credit monitoring service. While this typically comes at a cost, the business that exposed your data may offer these services for free in response to the breach.

Change your passwords.

In case the cybercriminals are in your online accounts or got a hold of the information that could give them access, change your passwords. Plus, it’s a good practice to update your passwords every 90 days. Be sure to include numbers, symbols, and uppercase and lowercase letters in your new passwords.

Grange Insurance offers an Identity Theft coverage endorsement that can be added to a Grange Personal Auto or Homeowners insurance policy. For full details on coverage and discounts, contact your Shield Insurance Agent. This article is for information purposes only. For specific coverage details, always refer to your policy.

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4 reasons to have identity theft insurance

Posted on by Shield Insurance Agency

Identity theft insurance is there to help protect you from the worst financial situations. And in today’s data-driven world, identity theft remains a constant threat that comes with a big financial risk.

When an identity thief has your Social Security number and other identifying information, they can use it to fraudulently open new accounts or credit cards for financial gain, steal money from your existing accounts, apply for loans, rent an apartment, obtain a job, receive medical care or establish accounts with utility companies.

Still not sure if you need identity theft insurance?

Here are a couple of reasons why you should consider it the next time you speak with your independent insurance agent.

Reason #1: Your household contains children or seniors.

Everyone with a Social Security number is at risk for identity theft, but identity theft thieves like to target individuals who are less likely to regularly check for identity theft warning signs or report irregular activity on their credit reports. This means children and seniors are prime targets.

If you have children, periodically check for a credit report in their name. If no credit report exists, that is a good sign that your child has not been a victim of identity theft. However, if you start receiving collection calls, statements or pre-approval credit offers in your child’s name, these are warning signs that your child’s identity may have been stolen.

If you have seniors in your household, help them learn about common tactics identity thieves use to trick their victims into sharing private personal information that could compromise their identity. Seniors are most often targeted with over-the-phone and internet phishing scams. Teach them how to identify phishing and encourage them to call the organization directly to confirm if the communication is real or a phishing attempt before they share any information.

Reason #2: You’re in the military.

Active duty military members are particularly vulnerable to identity theft while they’re deployed. This is because they might not be checking their credit reports or receiving calls from debt collectors.

According to the FTC, military members are most affected by bank and credit card fraud, but they have also been victims of employment fraud, tax-related fraud, and loan or lease fraud.

If deployment is in your future, set up an Active Duty Military Fraud Alert on your credit report. Once in place, businesses must verify your identity before issuing credit in your name and this makes it harder for identity thieves to use your information to apply for credit.

Reason #3: You’re on social media.

When you share your name, date of birth, hometown, and other personal information on your social media profile, it makes it easier for cyber-criminals to connect that information to even more sensitive information that they collect from you from phishing or another type of scam.

In 2018, the FTC processed over 9,000 email or social media identity theft reports, which was a 23% increase from the previous year.

Think twice before you share a lot of personal information on your social media profiles.

Reason #4: Your password is 12345.

If you use a simple password to protect your accounts or internet-connected devices, then it’s time to update it. Some examples of a simple password are 12345, password, and admin.

A secure password is long, includes a mix of letters, numbers, and symbols and it isn’t easily guessed. You should also avoid using the same password for all of your accounts, since cracking it in one location could open the door for an identity thief to access and take over your other accounts, too. Consider using two-factor authentication, which sends a code to your phone during login, whenever it’s available to add an additional layer of password protection.

Even if none of these reasons apply to you, it pays to be on the lookout for identity theft. CyberScout, a provider of full-spectrum identity, privacy, and security services and a Grange Insurance partner, recommends checking your credit report from all three credit agencies at least twice a year. Under FACTA, every consumer has the right to obtain a copy of his or her credit report free from each of the credit reporting agencies. Take advantage of this opportunity and learn about additional prevention techniques like setting up credit monitoring to keep your identity, and those of your loved ones, safe.

This article is for informational and suggestion purposes only. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy apply. Shield Insurance offers an Identity Theft coverage endorsement that can be added to a Personal Auto or Homeowners insurance policy. For full details on coverages and discounts, contact us@ShieldAgency.com .

References:
– Consumer Affairs
– CyberScout

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Retail Guidelines to Add To Your Reopening Plan

Posted on by Shield Insurance Agency

Retail guidelines to add to your reopening plan.

No matter what area of retail you work in, you need a retail reopening plan that outlines steps to keep your customers and employees safe during coronavirus. From social distancing shopping measures to sanitary protocols for returns, there are many working parts to address while reopening stores during COVID-19.

As you outline your plan, look for retail reopening guidelines from the experts at your local level up to the global level, including the Centers for Disease Control and Prevention (CDC) and American Industrial Hygiene Association (AIHA). These organizations can help you prioritize the best actions you can take before opening your store and throughout your workday.

Guidelines for reopening stores

Start with a detailed plan for customers and employees to follow to keep their health and safety a top priority. According to the CDC and AIHA, components of your retail reopening plan should include

  • Safety measures for employees before each shift, such as recording their temperature either at home or before entering the store.
  • Personal hygiene protocols for employees like handwashing, sanitizing shared surfaces, and wearing face coverings.
  • Social distancing markers, like tape or decals, on the floor throughout the store including checkout line markers that are six feet apart and one-way aisles to reduce people passing each other in close proximity.
  • A merchandising strategy with social distancing in mind. Separate shelving and limit items on display with backstock for different colors and sizes.
  • A returns strategy for accepting and storing returned items.

AIHA recommends sharing your reopening plans with employees and customers via email and social media. Educate customers on the precautions you’re taking to give them a safer shopping experience. You can also take this opportunity to promote alternative shopping methods, such as online shopping or contactless curbside pick-up, for those looking for a lower-risk shopping experience.

Additionally, continue to monitor local and state guidelines, the CDC, AIHA, and other sources you use for coronavirus prevention information. As the experts update their information, you should also update your retail reopening plan where it’s necessary.

Prioritize customer safety inside your store


Here are some steps you can take to help protect your customers and minimize the risk of spreading COVID-19 at your store

  • Limit the number of occupants in the store at any given time.
  • Place a trained greeter at the front of the store to answer questions and encourage customers to partake in social distancing practices while they shop.
  • Limit purchases to card-only transactions to reduce cash handling.
  • Sanitize shared surfaces at the register between customers.
  • Install a “sneeze guard” between employees and customers at each checkout line.

Reopening stores during COVID-19 can be a challenge but adding protective measures like these will help decrease the spread of the virus. The more detailed you can be in your guidelines for reopening, the more peace of mind you can offer your customers.

Keep your retail employees safe

Give employees the training and tools they need to stay safe and effectively sanitize their work environments during each shift. These practices may include:

  • Providing hand sanitizer with at least 60% alcohol at every workstation, register, break room and shared employee space.
  • Training employees on adequate handwashing practices or posting signage in bathrooms with best practices for handwashing techniques.
  • Providing no-touch disposals in bathrooms and break rooms.
  • Cleaning bathrooms, break rooms and other shared rooms frequently.
  • Staggering work shifts to limit the number of employees in the store at any given time.
  • Encouraging employees to stay home when they feel sick.
  • Taking employees’ temperatures before they enter the store for a shift.

References:
– American Industrial Hygiene Association (AIHA)
– Centers for Disease Control and Prevention (CDC)

This article is for informational and suggestion purposes only. If you have questions about your Grange business insurance coverage, please speak with TJ, your Shield Insurance Agent

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Business Insurance Premium Audit Explained

Posted on by Shield Insurance Agency

Shield Insurance Blog | Business Insurance |

What is a premium audit for business insurance?

To begin to understand what a Business Insurance Premium Audit is and why it’s important, let’s take a walk down memory lane.

When you first set up your commercial insurance policy or the last time you completed a business insurance review with your agent, you may remember your agent asking you to predict certain things your business might experience in the coming year, such as the makeup of your workforce or annual revenue.

This prediction or estimate is an important part of the process to insure your business. It helps set a price, or premium cost, for your commercial insurance policy so you are paying an adequate amount for your business’s unique needs.

Later on, your insurance company, in conjunction with TJ, your agent at Shield, will check how close the prediction was to the business you actually had for that policy year. This is a premium audit. A premium audit is performed regularly by your insurance company to determine the correct premium (i.e. cost) for your business insurance.

Why does business insurance have premium audits?

Unlike personal insurance policies for a car or home, which have more stable and predictable changes in property value and risks, a business is very dynamic. Its income, operations, and risk levels can change all the time, and sometimes in unpredictable ways.

Commercial insurance can cover a business’s physical location and property as well as its liability. Physical location and property can be more predictable to insure. However, business liability tends to be impacted by a business’s growth or shrinking, which is more unpredictable. As a business grows or shrinks, it increases or decreases the chances that the business could be liable to others.

This means that parts of your commercial insurance policy are built to change with the ebbs and flows of your business.

How does a premium audit affect my insurance costs?

During a premium audit, if your business grew more than the amount estimated, the resulting increase in things like sales and payroll means your insurance premium will likely increase.

The same is true in reverse. If your business saw a reduction in business from the policy estimate, you will likely see a reduction in your premium cost.

When an insurance company performs a premium audit, it is looking for accuracy — for both the insured business and the insurance company.

Here’s why: The insurance company needs accurate information to determine things like claims reserve calculations and ratemaking. When the insurance company collects accurate data from its commercial policyholders, it leads to a more financially sound insurance company.

Accurate data also leads to a fundamentally more sound insurance system overall since the premium data collected by insurance companies is reported to the Insurance Services Office (ISO), the National Council on Compensation Insurance (NCCI), and state government entities, who then use the data to provide guidance, rules and regulations back to insurance companies.

Your data is an important part of the whole commercial insurance system!

How can my business prepare for a premium audit?

Keeping organized business records is the best way to be ready for a review of your business insurance. When properly kept and provided to the auditor, these records can help keep your insurance cost in line with your actual business needs and may even allow you to take advantage of exclusions or lower rates.

The following bookkeeping practices can help you prepare:

  • Payroll records – Track and show actual payroll by type of work for each employee and business owner. Track overtime, severance and other payroll items.
  • Subcontractor records – Use insured subcontractors when possible. Request and keep a copy of their Certificates of Insurance. Track and show payments by type of work.
  • Sales records (e.g., income statements) – Track and show sales by product. Track sales by customer, returns and other sales items.

You can also speak with your independent insurance agent commercial business specialist, TJ Simmons, to learn more about the premium audit, how it may affect your premium cost and steps you can take now to prepare for it.

This article is for informational and suggestion purposes only. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy apply.

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Insurance Terms Important to Know - Shield Insurance Agency Blog

Common Insurance Terms Made Easy

Posted on by Shield Insurance Agency

Insurance can be confusing…we get it! But we’re here to help provide you with a better insurance experience. Learn more about what these common insurance terms mean so you can be prepared when looking for a policy.

For customer information or to get a quote, please visit our website at www.ShieldAgency.com .

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New Year: Foresight in 2020

Posted on by Shield Insurance Agency

They say, “Hindsight is 20/20.” 

As we approach the new year, the National Insurance Crime Bureau (NICB) is encouraging you to exercise “Foresight in 2020.”   

While it’s easy to look back on where and how we failed to protect our assets, it is exponentially more beneficial to look forward and try to predict where we can best insulate ourselves from insurance crime and theft. By studying where we are vulnerable, we can identify weaknesses and adapt improvements that protect us, our families, and our property. From small precautions, like making sure we don’t leave valuables in our vehicles, to more extensive protections, like installing home security systems, we can exercise foresight in 2020 and stop crime before it happens. Law enforcement agencies across the country now engage in the practice of intelligence-based policing.

This methodology uses past data to identify and predict the patterns and behavior of criminals. NICB and our members follow suit, by identifying known threats and patterns in order to properly educate our consumers. You too can be an advocate in this preemptive strike against crime. Educate yourself, take precautions, and be vigilant. By using foresight in 2020, we can win the battle against crime.  

The best deterrent continues to be vigilance.

If there is a vacant home or business in your area, and you see suspicious or unusual activity around the property, call your local law enforcement. If any vehicles are involved, jot down their descriptions and license plates. Also, note the clothing and physical appearance of any person(s). All of this is very helpful to investigators. 

NICB reminds consumers to make sure your vehicle is locked when unattended. Don’t leave spare keys or fobs inside. Take a moment and be sure to hide your valuables from view. Even an empty bag or extra change in view looks appealing to a thief from the outside. 

Do things to protect your home, by locking your doors and investing in a home security system.  

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800.TEL.NICB (800.835.6422) or submitting a form on our website.

About the National Insurance Crime Bureau:

Headquartered in Des Plaines, Ill., the NICB is the nation’s leading not-for-profit organization exclusively dedicated to preventing, detecting, and defeating insurance fraud and vehicle theft through data analytics, investigations, learning and development, government affairs, and public affairs. The NICB is supported by more than 1,300 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $496 billion in insurance premiums in 2018 or more than 81% of the nation’s property-casualty insurance. That includes more than 92% ($254 billion) of the nation’s personal auto insurance. To learn more visit www.nicb.org.

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