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Commercial Contractors Insurance: Required and Very Important

June 30, 2012 By

Statewide General LiabilityCommercial contractors’ insurance quotes can address any of the numerous types of indemnity that autonomous businesses require. These include, but are not limited to, liability, workers comp, property insurance coverage, commercial vehicle policies, and umbrella insurances. These policies cover the business from more or less any calamity that might occur.

An investment will return with an individual claim. And matters will occur. That is an inescapable reality. It takes an elementary error or slip and matters go from sound to awful in a moment. Without coverage, a business could go under rather rapidly.

Obtaining commercial contractors’ insurance quotes are rather easy with the web. Like most additional indemnity types, business has quickened since brokers went online. They can get data rapidly and make informed determinations without departing their desk. That gives the contractor tractability and choices that weren’t available earlier. Acquiring a beneficial relationship with a broker is crucial. However, the broker doesn’t need to be next door these days.

Commercial contractors’ insurance quotes are useful instruments for both the commencing contractor and those that have been in business for a long time. For the commencing contractor, quotes afford them choices for discovering the right insurance policy at the proper cost. They also get perceptiveness into the brokers and underwriters that service their region.

For a lot of beginners, it is a beneficial thought to confer with others in the craft they would like to enter. This will afford them the names of brokers and companies that furnish insurance coverage for that type of commercial enterprise. It can also afford them names of those to avoid due to inadequate claims service or exorbitant pricing. All of that affords new contractors an effective beginning.

For experienced contractors, commercial contractors’ insurance quotes afford them ammo when considering their current insurance policy. A lot of times their broker will assume they would like to renew with their current underwriter and won’t do any legwork to discover the best cost at other companies. It’s up to the contractor to make the first motion to commence quotes.

A couple of weeks ahead of the renewal date, a contractor need to get hold of their broker and call for them to research other suppliers and other deductions. This gives the broker time to do the legwork. It also affords the customer time to see the alternatives and make informed determinations. It is a tool for the broker to utilize with the current underwriter to cut down the quoted renewal rate.

Contact Statewide Insurance Brokers for your commercial contractors insurance. We will get you a fast, free quote! Call 888-258-0272

Five Tips for Buying Business Insurance

June 26, 2012 By

The US Small Business Administration offers some tips for buying insurance. They are sage words so we will repeat them here.

Insurance coverage1. Assess Your Risks. Insurance companies determine the level of risk they’ll accept when issuing policies. This process is called underwriting. The insurance company reviews your application and determines whether it will provide all or a portion of the coverage being requested. Each underwritten policy carries a premium and a deductible. A premium is the price you pay for insurance. Premiums vary widely among insurance companies, and depend on a number of risk factors, including your business location, building type, local fire protection services, and the amount of insurance you purchase. A deductible is the amount of money you agree to pay when making a claim. Generally, the higher deductible you agree to pay, the lower your premium will be. However, when you agree to take on a high deductible you are taking on some financial risk. So, it’s important to assess your own risks before you go shopping.

2. Shop Around. The National Federation of Independent Businesses provides information for choosing insurance to help you assess your risks and to make sure you’ve insured every aspect of your business. The extent and costs of coverage vary from company to company. Some brokers specialize in insuring specific types of business, while others can connect you with policies specific to your business activities. For example, if you operate a tow truck service, you’ll want to find an agent that can help find policies that specifically cover automotive service businesses. Often specialist brokers can get you the best coverage and the best rates.

3. Consider a Business Owner’s Policy. Insurance can be purchased separately or in a package called a business owners’ policy (BOP). Purchasing separate policies from different insurers can result in higher total premiums. A BOP combines typical coverage options into a standard package, and is offered at a premium that is less than if each type of coverage was purchased separately. Typically, BOPs consist of covering property, general liability, vehicles, business interruption and other types of coverage common to most types of businesses. BOPs simplify the insurance buying process and can save you money. However, make sure you understand the extent of coverage in any BOP you are considering. Not every type of insurance is included in a BOP. If your business has unique risks, you may require additional coverage.

4. Find a Reputable, Licensed Agent. Commercial insurance brokers can help you find policies that match your business needs. Brokers receive commissions from insurance companies when they sell policies, so it’s important you find a broker that is reputable and is interested in your needs as much as his own. Make sure your broker understands all the risks associated with your business.

Finding a good insurance agent is as important as finding a good lawyer or accountant. You should always look for one that has a license. State governments regulate the insurance industry and license insurance brokers. Many states provide a directory of licensed agents.

5. Assess Your Insurance Coverage on an Annual Basis. As your business grows, so do your liabilities. You don’t want to be caught underinsured should disaster strike. If you have purchased or replaced equipment or expanded operations, you should contact your insurance broker to discuss changes in your business and how they affect your coverage.

Statewide Insurance is your reputable agent. We are here to help you assess what coverage you need to give you the best protection. We operate in many fields and are licensed to provide coverage in Texas, California, Oregon, Minnesota, Virginia and Nevada. We are here for you and your business.

Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.

General Liability Insurance Facts for Oregon Contractors

May 5, 2012 By

The Oregon Department of Consumer & Business Services (DCBS) provides information for contractors on general liability insurance in the state. The full fact sheet is available here.

Are contractors required to purchase liability insurance?
Oregon law requires building contractors to carry general liability insurance, which includes products and completed operations coverage. The state Construction Contractors Board (CCB) will not issue or renew a contractor license without proof of insurance. Coverage limit requirements vary depending on the license category. Many contractors carry coverage in excess of CCB’s requirements.

What does general liability insurance cover?
General liability insurance covers property damage and bodily injury losses caused by the contractor that occur as a result of his or her work. It does not provide coverage for poor workmanship or construction defects. Limitations on these insurance contracts vary from insurer to insurer. Exclusions in a policy for specific exposures such as multi-family dwellings, tract home projects, condominium construction, and exterior insulation finishing systems are common. Every policy is different, so it is especially important for the policyholder to understand his or her coverage.

General liability can be written on an occurrence or a claims-made basis:

Occurrence policies provide coverage for liability that occurs while the policy is in force, regardless of when the claim is reported. Occurrence policies can also be issued with a manifestation trigger, providing coverage only when the first manifestation of bodily injury or property damage occurs during the policy period. Under current Oregon law a claim can be brought for up to 10 years after completion of a project.

Claims-made policies provide coverage for claims that are reported while the policy is in force. Often the claims-made coverage is subject to a “retroactive date” and will not cover claims that are made while the policy is in force that are due to occurrences that were before the retroactive date. Claims reported after the policy is cancelled or replaced are not covered unless the contractor purchases an “extended reporting” option, sometimes known as “tail coverage.” Policies for contractors written on or after January 1, 2008 must include products and completed operations coverage “according to the terms of the policy and subject to applicable policy exclusions.” The certificate of insurance or electronic proof of coverage provided to the CCB is required to document that the products and completed operations coverage is included.

What are the current issues surrounding contractor liability insurance?
Premium rates for contractor liability insurance have increased in recent years. At the same time insurers’ criteria for issuing policies are tighter. Many contractors find that they either face premium hikes, or their policies are canceled or non-renewed. It may be difficult to obtain new coverage. Contractors who work on the envelope of the structure, such as residential builders, framers, siders, roofers, and window and door installers, have been particularly hard-hit. In some cases contractors find that while they may be able to obtain or renew coverage, the contract is more limited than it was previously. This leaves the contractor with increased exposure to uninsured liability risk.

How much has the cost of this insurance increased?
The rating bureau loss costs which insurers use to determine their final premiums for contractor classes have increased an average of 18 percent for products and completed operations liability coverage. Changes in payroll or gross sales are other factors that affect contractor liability premiums. Often the more dramatic rate changes experienced by individual contractors stem less from rate
increases by their existing carrier than from situations where their coverage is cancelled and they are unable to find a new policy at a similar price. Upon moving to a new insurer, the premium is typically higher. The new coverage may also be less extensive.

Why have costs increased so sharply?
The insurance industry and others frequently cite a variety of factors that contribute to increased premiums and tighter underwriting standards, including:

  • ƒ Increased claims and losses stemming from the introduction of new building products or construction methods that result in water damage, mold, and other problems,
  • ƒ Increased litigation stemming from contractor performance issues, and
  • ƒ Lower than expected investment returns due to changes in the interest rate environment.
Statewide provides general liability insurance in Oregon.
Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.
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Premiums and Finding an Agent for Commercial General Liability Insurance

March 26, 2012 By

This is our last installment about Commercial General Liability insurance from the Texas Department of Insurance website.

What is a Premium Audit?

Most CGL policies are auditable policies and contain a condition commonly called “Premium Audit.” The premium that is paid at the inception of the policy is a deposit (estimated) premium. Auditable policies usually use estimated payroll, sales, or units sold as the premium base to calculate the deposit (estimated) premium.

The insurer is entitled to examine your books and records to determine whether the actual payroll, sales, or units sold are greater or less than what was estimated. This is usually done after the expiration of the policy, but may also be done during the policy period. If the actual payroll, sales, or units sold is greater than was estimated, you may owe additional premium. If the actual payroll, sales or units sold is less than what was estimated, you may be due a return premium. Therefore, it is important to provide an estimate of the payroll, sales, or units to be sold that is as accurate as possible to avoid having to pay an additional premium.

What Kinds of Insurers Offer CGL Insurance?

The Texas Department of Insurance (TDI) recognizes the following four types of insurers that may offer commercial general liability insurance in Texas. To check on whether a carrier is licensed, eligible, or registered in Texas, call TDI’s Consumer Help Line at 1.800.252.3439 , or use the Company Lookup feature on the TDI website at https://apps.tdi.state.tx.us/pcci/pcci_search.jsp .

Licensed Insurers

TDI regulates the policy forms and rates of licensed insurers.
CGL policies offered by licensed insurers must contain the following legislatively mandated provisions:

  • Coverage may not be cancelled by the insurer after 60 days from the effective date of the policy except for the following reasons:
    1. fraud in obtaining coverage;
    2. failure to pay premiums when due;
    3. an increase in hazard within your control that would produce a rate increase;
    4. loss of the insurer’s reinsurance covering all or part of the risk covered by your policy; or
    5. at any time if the insurer is placed in supervision, conservatorship, or receivership and the cancellation or nonrenewal is approved or directed by the supervisor, conservator, or receiver.
  • The insurer must provide at least 60 days notice of nonrenewal and must tell you in writing why it will not renew your policy.

Policyholders obtaining insurance from licensed insurers are protected by the Texas Property and Casualty Insurance Guaranty Association for up to $300,000 per claim if the insurer becomes insolvent.

Surplus Lines Insurers

Insurance not available through licensed insurers may be placed with eligible surplus lines insurers. To be eligible to write surplus lines coverage in Texas, the insurer must meet certain requirements and be on TDI’s “eligible list.” Before selling a surplus lines policy, an agent must make a diligent effort to find a licensed insurer to issue the policy.

  • It is common for surplus lines insurers to retain a significant portion of the premium in the event the insured cancels the policy midterm.
  • Texas laws regarding notice of cancellation and nonrenewal do not apply to surplus lines insurers.
  • Defense costs could be included within the limit of liability, and prior acts or run-off coverage may not be available.
  • In some cases, a surplus lines insurer can cancel before a policy’s renewal date.
  • Surplus lines insurers are not required to file rates and policy forms with TDI. Policy forms may be more restrictive than those that are subject to TDI review.
  • TDI does not audit the finances of surplus lines insurers.
  • If a surplus lines insurer becomes insolvent, its policyholders are not protected by the Texas Property and Casualty Insurance Guaranty Association.

Risk Purchasing and Risk Retention Groups

Risk purchasing groups are formed under the provisions of the federal Liability Risk Retention Act (LRRA) of 1986. A purchasing group consists of individuals or firms of like characteristics who share similar insurance needs. The eligibility criteria for members of a purchasing group are set by LRRA. Once formed and registered with the State of Texas, the group may use its purchasing power to obtain liability insurance and benefits at prices that may be lower than individuals or businesses could negotiate separately.

If a purchasing group buys insurance from a licensed insurer, it may be protected by the Texas Property and Casualty Insurance Guaranty Association if the insurer has capital and surplus of $25 million or more. If the purchasing group is not protected by the Texas Property and Casualty Insurance Guaranty Association, then it must disclose this to its members.

Policy forms offered to purchasing groups by licensed insurers are currently not required to be filed with TDI. However, the policies must contain the legislatively mandated provisions required to be in policies issued by licensed insurers.

Policy forms offered to purchasing groups by surplus lines insurers are not regulated as to rates or forms and are not protected by the Texas Property and Casualty Insurance Guaranty Association.

Risk Retention Groups also are formed under the provisions of the federal Liability Risk Retention Act (LRRA) for the purpose of providing insurance. These groups do not buy commercial insurance policies, but “retain” the risk within the group. In effect, the members insure each other against liability claims and lawsuits. However, because a risk retention group is an insurer, it may purchase reinsurance. Reinsurance is a form of insurance that insurance companies buy for their own protection.

The rates and policy forms of risk retention groups are not regulated, and policyholders are not protected by the Texas Property and Casualty Insurance Guaranty Association in the event the risk retention group becomes insolvent.

Shopping for CGL Coverage

  • Be proactive. Provide your agent or insurance markets with claims history, coverage choices, and risk management efforts four months in advance.
  • Respond quickly to requests for information from your agent. Be sure to document all communication with your agent. Especially note key items such as policy limits, deductibles, requested effective date, prior acts coverage if applicable, etc.
  • Get your claims history (loss runs) up to date. You may request claims history from your insurer. Businesses of any size should be prepared to address claims history.
  • Update and document all loss control/risk management measures, including training accomplished. Be prepared to show why your business currently is and will continue to be a good risk.
  • Get quotes from several companies. When comparing prices, make sure you’re comparing policies with similar coverage. A less expensive policy might also provide less coverage.
  • Keep shopping if an insurer declines to cover your business. Insurers have different underwriting criteria. If one company turns you down or is too expensive, another may be willing to issue coverage or offer a lower premium.
  • Review your limits of insurance and make any necessary adjustments. For example, if your business is growing you may consider increasing your limits.
  • Consider a higher deductible. Assuming more risk in the form of higher deductibles or lower policy limits may help reduce your premium.
  • Allow for premium increases. When preparing your budget, allow for premium increases or additional premium charges resulting from an audit.
  • Verify your agent’s and insurer’s licenses. Agents and insurers must be licensed to sell commercial property insurance in Texas. An unlicensed insurer may not meet the state’s minimum financial and regulatory requirements, meaning the company may not have the financial resources to pay your claim. To learn an agent’s or insurer’s license status, call TDI’s toll-free Consumer Help Line or use the Agent Lookup or Company Lookup features on our website.  1.800.252.3439,  463.6515  in Austin.
  • Access Market Connection. Access the Market Connection feature of Helpinsure.com at the Texas Department of Insurance Website.  This feature will allow you to search for insurers and agents offering various types of commercial insurance.
Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.
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Exclusions in a Commercial General Liability Insurance Policy

March 19, 2012 By

Last week we started bringing you the basics of Commercial General Liability Insurance from the Texas Department of Insurance. This week we provide information on exclusions in CGL policies. This is something you definitely need to be informed about. While you may have insurance, an accident or incident can be excluded from coverage due to its nature.

Here are the facts:

Examples of Exclusions in a CGL Policy

Following are some examples of exclusions commonly contained in a CGL policy. Coverage varies by insurer and will include additional exclusions other than the examples below. You should carefully review your policy and any endorsements to know exactly what your policy does – and doesn’t — cover. Talk to your agent if you have any questions about your policy, its coverages, or policy limits.

Damage to Your Work – Generally, CGL policies exclude coverage for property damage to your work (see Example No. 1 below). There is an exception to the exclusion for damaged work if a subcontractor working for you caused the damage (see Example No. 2 below).

Example 1: You own a homebuilding business that recently constructed a new residence with a garage. After the home is sold and the homeowner moves in and parks her vehicle in the garage, the roof on the garage collapses because of faulty construction. The collapsed roof damages the homeowner’s vehicle. The policy may provide coverage for the repair or replacement of the vehicle but may not pay to repair the collapsed roof because the roof is your work.

Example 2: The situation is the same as in Example 1, except the work to construct the roof was performed by subcontractors working on your behalf. The policy may cover the damage to the vehicle and also may pay to repair or replace the roof constructed by your subcontractor.

Damage to Your Product – CGL policies don’t cover property damage to your product arising out of the product or any part of the product.

Example: If you install a propane-powered appliance that malfunctions and causes a fire that damages a home, your CGL policy may pay to repair the home. It will not pay to repair or replace the appliance if the malfunction was caused because the appliance was faulty.

Contractual Liability – CGL policies exclude coverage for bodily injury or property damage that you are obligated to pay because you assumed liability in a contract or agreement. The exclusion contains the following two exceptions:

1. Liability for damages that you would have assumed in the absence of the contract or agreement; and

2. Liability assumed in a contract or agreement defined in the policy as an insured contract, if the bodily injury or property damage occurs after the contract or agreement is executed.

Example 1: You sign a contract to complete the construction of a building within a specified amount of time. The contract requires you to pay damages if you breach the contract. Your CGL policy will not provide coverage for any damages you have to pay because you failed to meet the deadline.

Example 2: You sign a contract to hold harmless and indemnify another party for the other party’s negligence if that negligence results in bodily injury or property damage. Your CGL policy may provide coverage to indemnify the other party depending on the wording of the indemnity agreement.

Recall of Products, Work, or Impaired Property – CGL policies will not pay the cost to recall faulty products, work, or impaired property. However, this coverage may be added to the policy by endorsement for an additional premium charge.

Workers’ Compensation and Employer’s Liability – CGL policies are not intended to provide coverage for workers’ compensation or employer’s liability. This exclusion prohibits such coverage.

Pollution Exclusions in the CGL Policy

The pollution exclusion eliminates coverage for injuries or damages to a third party resulting from a pollution event arising from your business operations. The exclusion applies to the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants.

A pollutant is typically defined as any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes materials to be recycled, reconditioned, or reclaimed.

The pollution exclusion included in most general liability policies may contain some of the following exceptions that could provide limited coverage for:

  • Injuries sustained within a building and caused by smoke, fumes, or vapors produced by equipment that is used to heat, cool, or dehumidify the building or equipment used to heat water for personal use.
  • Your products or completed operations.
  • Injuries or damage arising out of heat, smoke, or fumes from a hostile fire. (Hostile fire is defined as a fire that becomes uncontrollable or breaks out from where it was intended to be.)
  • Injuries or damage that an insured contractor may be held liable for if the owner of the premises has been added as an additional insured to the contractor’s policy.
  • Injuries or damage arising out of the escape of fuels or lubricants necessary for the operation of mobile equipment.
  • Injuries or damage sustained within a building and caused by the release of gases, fumes, or vapors from materials
  • brought into the building in connection with operations performed by you or a contractor or subcontractor working on your behalf.
  • Total pollution exclusions eliminate all coverage, including coverage for premises/operations and products/completed operations.

If your businesses has a significant pollution exposure, you may choose, in conjunction with your insurer, to include a total pollution exclusion and purchase a separate pollution liability policy that may provide coverage better suited to the risk and is easier to rate based on the nature of your business.

We will continue next week.

Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.
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About Commercial General Liability Insurance

March 12, 2012 By

It helps to know the basics about the insurance you buy or are going to buy. Although Commercial General Liability Insurance is one of the most common business insurances available, you might not know everything about it. Consequently we are going to reproduce here over the next few weeks several segments from the Texas Department of Insurance so you have the facts.

What Is Commercial General Liability Insurance?
Commercial General Liability (CGL) insurance protects business owners against claims of liability for bodily injury, property damage, and personal and advertising injury (slander and false advertising). Premises/operations coverage pays for bodily injury or property damage that occurs on your premises or as a result of your business operations. Products/completed operations coverage pays for bodily injury and property damage that occurs away from your business premises and is caused by your products or completed work.

Excess liability insurance pays for covered losses that exceed your CGL policy’s dollar limit.

Umbrella liability insurance is excess liability insurance coverage above the limits of automobile liability and CGL policies. The umbrella policy also provides liability coverage for exposures not covered under the primary CGL insurance policies and not excluded by the umbrella liability insurance policy.

Claims-Made Versus Occurrence Policies
Occurrence policies cover claims arising from injury or damage occurring while the policy is in force, regardless of when the claim is first made.

Claims-made policies cover claims that arise from injury or damage occurring during the policy period and reported to the insurer during the policy period. Claims arising from events outside the policy period or claims reported to the insurer outside the policy period are not covered unless special coverage is purchased or arranged with the insurer. This special coverage comes in two forms:

Prior acts (“nose”) coverage covers claims that arise from injury or damage occurring before the policy period, but reported to the insurer after the policy period begins.

Prior acts coverage is provided by establishing a “retroactive date” covering injury or damage occurring after the retroactive date. The retroactive date usually appears in the declarations page accompanying your policy. It may be the effective date of the policy or an earlier date. Prior acts coverage does not cover claims that were known at the time your policy began.

Run-off (“tail”) coverage, also called extended reporting period, pays for residual claims made after your policy expires. A typical claims-made policy provides a short reporting period of 30 or 60 days after the policy’s expiration date to file claims that arose too late to report before the policy expired. Run-off coverage starts when the 30- or 60-day period ends and is provided for an additional premium. The extended reporting period may be one, three, or five years, or even unlimited.

If a claims-made policy does not continue (expires, cancels, or nonrenews), you should purchase either run-off coverage from your previous insurer or prior acts coverage from your new insurer to prevent coverage gaps. Generally, claims-made policies may be less expensive in their early years as the potential for claims increases as policy years accumulate.

The differences between claims-made and occurrence policies are best illustrated by the following examples:

Assume you operate a business located in a building that you own. Your customers may enter the building and shop for merchandise in a showroom. On April 15, 2010, a customer slips and falls in your showroom. The customer reports the incident to you but says he does not believe he is injured. On December 15, however, you receive notice that the customer has filed a claim for injuries sustained in the fall.

Occurrence Policy: An occurrence policy with a policy period from June 1, 2009, to May 31, 2010, will cover the claim because the incident occurred during the policy period.

Claims-Made Policy: A claims-made policy with a policy period from June 1, 2009, to May 31, 2010, will not provide coverage because the claim was made after the policy expired. If, however, you purchased an extended reporting period from your insurer when your policy expired, the claim may be covered.

More next week…

Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.
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Tips on Buying Insurance on the Internet

February 27, 2012 By

The Texas Department of Insurance last month issued an advisory providing shopping tips about buying insurance on the Internet as well as listing the dangers of  doing so. This advice should be known to all buyers and potential buyers of insurance. Statewide Insurance Brokers provides this information as a public service.

Here is what they had to say:

Quick Tips

  • Take time to gather information, evaluate your needs, and buy coverage based on your research. Always begin with the assumption that if an insurance deal seems too good to be true, it probably is.
  • Buy only from licensed companies and agents. Learn a company’s license status, complaint history, and financial rating by calling the Texas Department of Insurance (TDI) Consumer Help Line at 1-800-252-3439 or by visiting our website at www.tdi.texas.gov.
  • Be cautious of email insurance offers that you didn’t ask a company or agent to send you.
  • Be careful if someone asks you to drop one type of policy or coverage for another type.
  • Talk to an accountant, attorney, financial adviser, or a trusted friend or relative before putting savings or large sums of money into any annuity, other investment, or trust.
  • Get rate quotes and important information in writing and keep records.
  • Keep a copy and a file of anything you completed online or received in the mail and signed. Also keep any other insurance documents, including the policy, letters, advertisements, premium payment receipts, notes of conversations, and any claims submitted.
  • Make sure you receive your policy – not a photocopy – within 30 days. If you don’t, call the insurance company, not the agent. If you need a company’s toll-free number, call TDI’s Consumer Help Line.

Shopping Online

Use these state resources to help you shop for insurance online:

  • HelpInsure.com is a service of the TDI and Office of Public Insurance Counsel (OPIC) that helps you compare sample rates, policy and complaint information, and the financial ratings of companies writing residential property and auto insurance.
  • OPIC’s website at www.opic.state.tx.us provides online policy comparison tools that allow you to compare homeowners, renters, condominium, and auto insurance coverages by company and policy.
  • TexasHealthOptions.com provides information about health care coverage and your options.

Cyber Fraud

Insurance fraud is nothing new, but the Internet provides dishonest people with more opportunities to commit online fraud. The Internet allows people to remain anonymous and open or close stores in a couple of minutes. Here are some common cyber fraud schemes to look out for:

  • Copycat websites with company logos. The fake website promises a consumer insurance coverage from what appears to be a reputable insurance company. The consumer later learns the real company never received the application or payment.
  • Agents stealing premiums. Premium theft happens when an agent who advertises on the Internet provides a fake policy or proof of insurance card and keeps an annuity or insurance payment.
  • Sale of fake insurance. These sales happen when a website offers insurance at a low rate, but you later learn that the insurance company is fake and the policy is worthless.
  • Multi-level marketing or pyramid schemes. These schemes begin with an email or Internet website that offers something of value – such as an insurance policy – if you pay a membership fee. New members are told they can sell memberships or borrow money against their insurance policies and use that money to get credit cards and certificates of deposit. Members are not told they can only borrow against a policy’s cash value, which is usually zero in the first year.

Unauthorized Insurance

The most common type of cyber fraud is selling insurance without a state license. If a company is not licensed by TDI, it may not pay your claims and you could lose your premium payments. Call TDI’s Consumer Help Line to check a company’s or agent’s license status.

Notify TDI if somebody tells you an insurance product isn’t insurance and is exempt from state regulations, or if they tell you they don’t need a license to sell a particular type of insurance. This is a common insurance fraud pitch. If you suspect insurance fraud, call TDI’s Fraud Hot Line

1-888-327-8818

Privacy Concerns

The Internet provides access to information, products, and services, but it also allows companies to collect personal information about you that can be shared with others. Safeguard your privacy online by following these tips:

  • Think before you give out personal information. Keep your address, telephone number, Social Security number, email address, credit card number, and medical information private unless you know who is collecting the information, why they’re collecting it, how it will be used, and how disclosure benefits you.
  • Look for an online privacy policy. Many companies post privacy policies on their websites, including how any information collected will be used and protected from improper disclosure.  If you can’t find a policy, send an email to the webmaster or website asking for the company’s policy on privacy and information security.
  • Don’t allow companies to share your personal information. Many companies ask whether they can share your personal information with other companies.

Security on the Internet

The Internet is enticing because it’s always open for business. Make sure your online transactions are secure by taking the following precautions.

  • Ensure you’re using the current version of your browser and that your security preferences are set. Secure browsers can encrypt your credit card numbers and personal information, confirm the identity of websites, and notify you if a website looks suspicious.
  • Before you enter your credit card number or personal information, make sure the website address begins with https:// and there is a key or lock security symbol on the bottom corner of the browser.
  • Don’t enter any information if you’re unsure. If your browser is not secure or you do not want to submit the information over the Internet, contact the company or agent and ask about submitting it by phone, fax, or regular mail.
  • Keep passwords private. Use a combination of numbers, letters, and symbols. Don’t use any part of your telephone number, birth date, Social Security number, or address.
  • Keep records. Print out copies of orders or any forms you fill out online.
  • Pay with a debit or credit card. In most cases, you will only be responsible for paying the first $50 in unauthorized charges on your card. Do business with companies you know. Anyone can set up an electronic storefront on the Internet. If you’re not familiar with the agent or company, ask for more information or references.

For More Information or Assistance

For answers to general insurance questions or for information on filing an insurance-related complaint, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website

1-800-252-3439
463-6515 in Austin
www.tdi.texas.gov

You can also visit HelpInsure.com to help you shop for automobile, homeowners, condo, and renters insurance, and TexasHealthOptions.com to learn more about health care coverage and your options.

For printed copies of consumer publications, call the 24-hour Publications Order Line

1-800-599-SHOP (7467)
305-7211 in Austin

Help us prevent insurance fraud. To report suspected fraud, call our toll-free Fraud Hotline

1-888-327-8818

To report suspected arson or suspicious activity involving fires, call the State Fire Marshal’s 24-hour Arson Hotline

1-877-4FIRE45 (434-7345)

The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.
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Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.

5 Mistakes People Make When Buying Contractors Insurance

February 20, 2012 By

If you are looking to make a solid investment in the long-term health of your business then you need to buy insurance. One of the best policies you can get is general liability which covers you in the event the work you do causes bodily injury or property damage.

In order for you to get the best benefit from what general liability insurance can offer, you need to avoid making the mistakes that too many contractors are prone to do when choosing a policy.

These errors include:

  • Not understanding what loss will really mean for your business – Many contractors often view insurance as unnecessary because they believe that they will never have claims made against them. Only when the unexpected happens are they shocked into the reality that they will have to pay for damages.
  • Buying the wrong policy – A variety of different insurance policies exist on the market. When you choose a coverage plan, you need to make sure that you are getting comprehensive coverage that fits your needs and budget.
  • Remaining unaware of policy exclusions – Exclusions are those situations and events that a policy does not cover. It’s therefore critical for you to check what isn’t covered and what you should do to protect yourself.
  • Assuming your subcontractors won’t need insurance – If you’re like most business contractors, you hire subcontractors to get projects done more efficiently. However, if something happens to your subcontractor while they are on the job and you have no insurance, you could be held responsible.
  • Changing insurance providers too frequently – If you jump from one insurance provider to another too quickly, you may lose out on things like customer loyalty discounts. You also don’t give yourself enough time to evaluate how well a policy is working for you.

Life comes with few guarantees. But one thing you can count on is that when you contact Statewide Insurance, you’ll receive the best quotes on only those policies that fit your specific needs.  Contact our brokers today and get the straight talk from experts who know contractors insurance no one else in the business!

Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.

How Independent Contractors Benefit You

February 12, 2012 By

Independent contractors are a boon for employers. But sometimes knowing whether or not you have correctly classified your independent contractors for IRS purposes isn’t always easy.  Moreover, these kinds of workers also impact your business in ways that will require you to think carefully about the kind of insurance you will need to buy for your company.

An independent contractor is defined as an individual who contracts with a business to provide services for that organization. It’s important to know that this title should not be applied to individuals who are part of a department that has been outsourced to another firm.

Furthermore, it also important to be aware that an independent contractor does not have the legal status of an employee and can go by other names such as freelancer, consultant or simply contractor. When you hire a person who is part of another business operation, he or she could still be classed as an independent contractor.

Following are just a few of the reasons that more businesses are benefiting from the services of independents:

  • Technological advances – Computer technology allows for greater mobility than ever before and many jobs that once required an office setting to complete can now be done just as efficiently off-site.
  • Changing worker needs/demands – These days, workers want flexibility and greater work/life balance. They want to know the they can create schedules that conform with their lifestyle choices.
  • Cost effectiveness –  Because an independent contractor is not a regular employee, businesses don’t have to pay payroll costs such as federal payroll taxes, unemployment insurance premiums workers compensation premiums, overtime and employee benefits.

At the same time, you need to be aware that independent contractors require careful handling. You can still be held responsible for on-the-job injuries as well as complications arising from intellectual property issues. Finally, if you use independent contractors but treat them as employees, the IRS will require you to pay all back taxes owed with interest, plus a penalty.

If you are planning to hire contractors then your business needs both general liability insurance as well as a  workers compensation policy. Not having either one in place puts you and your business at risk for losses that may come about as a result of unforeseen events involving your contractors.

When you contact the brokers at Statewide Insurance, you can rest assured that you will not only be getting top-notch service but the best quotes on the best policies for your business. We know insurance like nobody else.  Let us show you the Statewide difference!

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Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on your insurance needs.

The Importance of Handyman Insurance

February 10, 2012 By

As a self-employed jack-of-all-trades, getting all the necessary certificates and licenses isn’t cheap and can eat into your profits. You might be tempted to reduce–or even do without–handyman insurance but doing so leaves you open to losses that may put you out of business altogether.

When you take out a handyman policy, you not only protect your working assets, you also make yourself look much more attractive to clients who like the security that policy represents. They know that if something goes wrong on the job, you–and they–are covered. That you are insured will also give clients greater reason to trust your reliability which will mean more work for you.

Handyman insurance will also give you peace of mind. No matter how careful you might be on the job, you never know when you might suffer an injury that will force you to take time out to recover. With a good policy in place,  you won’t have to worry as much about how you’ll pay the bills while you’re off the job.  You’ll also be able to rest a little easier knowing that you’re covered against any mishaps that may occur on a jobsite, regardless of who’s at fault.

Your profession is one that typically requires you to carry tools–such as trestle tables and power drills–from job to job. Unfortunately, building sites are often the targets of thieves which means that your tools and the vehicle you use to carry them are all vulnerable to robbery. Handyman insurance covers you against the loss of your equipment so that stolen items don’t become a huge out-of-pocket expense for you.

The brokers at Statewide Insurance can help you decide which insurance policy suits your business best. Start off the new year right and contact us today for more information.

Call Statewide Insurance Brokers at (888) 258-0272 today for fast, free quotes on carpet cleaning contractor’s insurance.