A female employer is sitting across from a male employee, going over paperwork with him. She has a pen in her hands and he has his hands clasped together on the desk.

who does your employment practices liability insurance cover?

what is and is not covered by EPLI?

Employment practices liability insurance, or EPLI, is an insurance policy that provides coverage to employers against claims made by their employees.

These claims include:

  • wrongful termination
  • sexual harassment
  • retaliation
  • unequal or unfair pay
  • discrimination (i.e. age, race, gender, sexual orientation)

 

EPLI covers the cost of lawsuits brought against your company by current, former, or prospective workers that believe that their legal rights have been violated or are displeased with your employment practices. Employers need EPLI to be financially protected from these claims.

However, EPLI doesn’t cover everything. The following are examples of what’s not covered: 

  • fraud or crime
  • contractual liability
  • on-the-job worker injuries
  • punitive damages
  • unemployment claims

 

Although some industries are more prone to these types of claims than others, the most common industries to have EPLI claims filed against them include construction, healthcare, professional services, and retail or food services.

how important is EPL insurance?

EPLI is important because all businesses with employees are susceptible to the threat of an employee submitting a claim against the company.

 

The policy protects business owners from these claims made by disgruntled employees and helps shield your business from potential financial ruin. Employee claims can be very expensive and even detrimental to small businesses.

 

EPLI helps cover the financial costs associated with legal action. Attorney fees and settlement costs are reimbursed by the policy, which means your business does not have the unexpected financial burden of paying off employee claim-related legal fees.

what’s the difference between EPLI and professional liability?

Professional liability insurance, also known as errors and omissions (E&O), covers legal action against your company from a client claiming inadequate work, negligence, services not delivered, and oversights.

 

This type of insurance is beneficial for businesses or professionals who give advice or provide a service for a fee in the healthcare, legal or financial industries, just to name a few. Examples of this would be doctors or lawyers.

 

It’s a good idea to have both EPLI and professional liability insurance as a business owner. The policies are not the same and cover different risks. While EPLI covers employee claims, E&O covers claims from clients. 

what’s the relationship between D&O coverage and EPLI?

Directors & Officers (D&O) Liability insurance protects directors or officers of a company from personal losses if they are sued for committing negligent acts or misleading statements.

 

With this insurance, the executive’s personal assets are safe from a lawsuit. D&O covers losses associated with the lawsuit, including legal defense fees. Exclusions in D&O policies are also similar to other professional liability policies, including property damage, bodily injury, and fraud or misrepresentation.

final thoughts

D&O insurance, E&O, and EPLI all protect employers and/or managers in different ways. It’s important for businesses to assess their risk when deciding whether to purchase these types of policies and how much coverage to buy.

This is dependent on factors like what type of industry you’re in or the size and makeup of your company. While it’s beneficial for your business to have EPLI and the various types of policies discussed above, it’s even more advantageous to prevent issues with employment practices that would pose these risks. Read on for three tips to avoid employment practices issues.

water leak, flooding a room with a wood floor, a couch and windows.

ensuring your business has appropriate water damage coverage

You might be looking at the title of this article thinking… “Why does my business need water damage coverage?”

Well, contrary to popular belief, water damage is one of the leading insurance losses, and can greatly impact your business. In fact, water damage is the second most common insurance claim for businesses. 

This considered, it’s important to take the proper steps to mitigate the high risk of water damage by having the proper insurance coverage.

does my insurance include water damage coverage? 

It’s important to have the right kind of business insurance for your commercial property. You want a policy that includes commercial water damage coverage.

The types of water damage claims covered by some commercial property insurance plans include:

  • Pipe breakage
  • Groundwater, and
  • Backed-up sewer lines

However, many policies exclude coverage for external flooding and mold-related damage.

For some insurance plans, you can purchase additional protection to your property policy to gain more coverage. There are also other types of insurance policies—for example, commercial flood protection or business interruption insurance—that can help safeguard your business from loss of income if your business has to close due to flooding or water damage.

what qualifies as water damage?

Commercial water damage is the destruction that a water-related issue can cause to your commercial property.

Damage can range from a corroded pipe bursting, a defective or improperly installed fitting can leak, and failed heating systems. All of these damages can result in major non-weather-related water disasters.

Common kinds of commercial water damage can come from many sources on the property. Always monitor your building to be aware of the areas where water damage can occur so you can be prepared if it does.

monitor your building

Pay careful attention to these parts of your property:

  • Roofs require maintenance to prevent damage from the elements
  • Pipes can easily leak or get damaged from extremely cold temperatures or old age
  • HVAC system can also leak or break due to a lack of maintenance or overuse

why is water damage not included in my property insurance?

Commercial property insurance commonly covers the loss of or damage to a property owned by a business. The damage that is covered includes:

  • Fire
  • Wind
  • Lightning
  • Explosions
  • Theft, and
  • Vandalism

However, most commercial property insurance does not include water damage. That’s why it’s important to know what your policies cover. Flood insurance is actually covered under a separate policy and can be purchased separately.

reach out to benchmark commercial insurance

Water damage is typically affected by the weather or a natural disaster that can create damage to your property—even with preventative measures, you can’t always control what happens.

Having a proper disaster plan, a building with adequate drainage systems, and regular maintenance and inspection schedules will help prevent damage and accidents.

Having a water damage insurance policy provides you coverage to help with the financial liability costs due to water damage. To find out more about water damage insurance and property insurance reach out to us or read on about why water damage is a top insurance loss.

team working in a hybrid environment

the importance of EPLI in a hybrid workforce

As we all know, COVID-19 has changed the way we live our lives—especially in the workplace. So, how has employment practices liability insurance (EPLI) changed as a result? What needs to be considered regarding EPLI and the hybrid workforce?

Let’s discuss, starting with a high-level overview of what employment practices liability insurance is.

what is EPLI?

Employment practices liability insurance, or EPLI, is insurance that “provides coverage to employers against claims made by employees.”

Policies typically extend coverage to the following:

  • Wrongful Termination
  • Sexual Harassment
  • Wage-Related Claims
  • Claims of Unequal or Unfair Pay
  • Discrimination Claims (i.e. age, race, gender, sexual orientation)
  • Third-Party Claims

Read on for three tips to avoid employment practice issues.

why is EPLI important?

Employment practices liability insurance is important to help protect your business from employee claims.

Picture this: Your business is sued for one of the following: sexual harrasment, discrimination, or wrongful termination. If the case winds up in court, your business may incur thousands or even hundreds of thousands of dollars in attorney fees and legal costs. For most companies, this is enough to cripple one’s business.

Here are five additional reasons to consider EPLI:

  1. Employee lawsuits are growing
  2. Settlements are getting more expensive
  3. All companies face risk (big or small)
  4. Even if your business is not at fault, you can still incur costs
  5. It’s unlikely that your current commercial liability policy includes EPLI coverageELPI in hybrid workforce infographic

the importance of EPLI in a hybrid workforce

During the pandemic, many employers faced EPLI claims due to employee filing for:

  • Wrongful termination
  • Discrimination over vaccine mandates
  • A business’s refusal to accommodate a disability
  • Harassment (i.e. a masked employee may file a harassment claim if their coworkers do not mask or vice versa)

Now, however, as employees return to the office, employers may face EPLI risks when designing hybrid workplace policies.

During the 2022 RISKWORLD™ conference, a session titled “Returning to Work? Check the Health of Your EPLI Coverage” took the floor. They noted that businesses moving from remote to hybrid models may open themselves up to EPLI risk if not done properly.

Here are some hypothetical situations that were discussed:

  • “If a remote employee is passed over for a promotion in favor of someone who works in-person at an office, they may allege unfair treatment, resulting in a wrongful deprivation of opportunity claim.
  • If return to office policies are implemented unevenly, employers could face discrimination claims.
  • COVID-19 testing could result in privacy claims if an employee feels any medical data wasshared intentionally or inadvertently with coworkers. 
  • An employee could file a harassment claim if they feel their coworker is dressing or acting inappropriately over Zoom.”

Read on to learn how EPLI can protect your business.

employee injured at work

looking at workers’ compensation post-pandemic

Before COVID-19, the workers’ compensation (WC) process was fairly efficient. The pandemic, however, has brought a unique set of challenges to the workers’ compensation industry, including remote and hybrid work models, job elimination, and more.


Let’s chat about workers’ compensation post-pandemic.

what is workers’ compensation?workers' compensation overview infograhpic

Workers’ compensation is insurance purchased by employers “that provides cash benefits and/or medical care for workers who are injured or become ill as a direct result of their job.”

According to the U.S. Department of Labor, workers’ comp can provide the following to the injured:

  • “Wage replacement benefits
  • Medical treatment
  • Vocational rehabilitation
  • Other benefits”

do all employers need workers’ compensation?

Yes, yes, and yes again.

According to the California Department of Industrial Relations, “all California employers must provide workers’ compensation benefits to their employees under California Labor Code Section 3700. If a business employs one or more employees, then it must satisfy the requirement of the law.”

why is workers’ comp important post-pandemic?

In 2020, employers’ workers’ comp premiums decreased by 10% due to decreased payrolls and fewer claims, according to the National Council on Compensation Insurance.

Fast forward to 2022, however, and things have shifted again. As more employers begin to adopt greater safety in the workplace as well as remote and hybrid work models, workers’ compensation has changed post-pandemic.

Many employers are facing the question of workers’ compensation for their remote employees: Do I need it?

In short – Yes. You need workers’ compensation for ALL employees, no matter where they are working from.

Whereas many remote businesses won’t experience the same ‘on-the-job’ type of workers’ compensation claims, they will likely experience more claims coming from ergonomic concerns (i.e. neck and back pain, finger and hand pain, etc.)

Read on for more information on workers’ compensation in the hybrid workforce.

Workers’ compensation is important for the same reasons pre-pandemic as post-pandemic. Workers’ compensation helps employers avoid hefty out-of-pocket costs in the event an employee is injured.

(PS: When it comes to small businesses, these out-of-pocket costs may be enough to shut operations down entirely—so don’t risk it!)

workers’ compensation costs are on the rise

Workers’ compensation rates have been gradually increasing over recent years.

This increase was bolstered, however, in July 2022, when the Workers’ Compensation Insurance Rating Bureau of California® (WCIRB) submitted its September 1, 2022, pure premium rate filing to the California Department of Insurance (CDI).

The California Department of Insurance helps regulate workers’ comp rates using the WCIRB’s recommendations.

In this 2022 filing, the WCIRB proposed a set of increased premium rates that are, on average, 7.6% higher than those approved the year prior on September 1, 2021. Wow!

Read on for the WCIRB filing.

why are workers’ compensation costs increasing?

Simply put, workers’ compensation rates are rising because there are more claims being filed.

Research shows claims might be increasing because:

  • Inflation
  • Workforce changes
  • Increasing age of the workforce
  • Increased indemnity costs, and
  • Rising wages

Claims—regarding unsafe working conditions, COVID exposures, and/or workplace accommodations—might also increase as individuals begin to return to in-person work.

what can business owners do to reduce workers’ compensation claims?

Considering the high increase in the cost of workers’ compensation coverage, business owners should do everything possible to reduce claims being filed. As a business owner, you can mitigate workers’ comp claims by:

  • Encouraging mental health awareness
  • Focusing on risk mitigation
  • Conducting proper employee training
  • Updating your employee handbook and code of ethics, and
  • Maintaining a safe workplace

Interested in learning more about how to reduce the number of workers’ compensation claims that your business faces? Read our article “how to avoid the most common workplace injuries.”

auto insurance clip

what happens after I file an auto insurance claim?

Uh oh… You’ve gotten into a car accident! Whether it’s a fender bender or a more serious collision, car accidents of any kind are not fun.

Nevertheless, 77% of drivers have been in at least one accident. So, if you’ve just recently been involved in a car crash and have given your insurance a call, you might be wondering…

“What happens after I file an auto insurance claim?”

At benchmark commercial insurance, we’re here to give you the lowdown.

what happens after you file an auto insurance claiminfographic - auto insurance claims

So, you’ve gone through the steps to filing a claim and relay exactly what happened to an insurance professional. Now what?

undergo or complete a damage assessment

After you submit a claim, an insurance adjuster will inspect the auto damages incurred.

Back in the day, an insurance adjuster would trek out to wherever the car was following the accident to assess damages.

In today’s digital age, however, you can usually conduct such an assessment yourself via mobile phone. For example, various insurance providers allow users to complete their own multi-point inspection simply by uploading photos to their insurance app.

receive an insurance settlement

Next, after an insurance adjuster submits a report on your claim, the insurance company may issue a settlement. An insurance settlement is the money an insurance company agrees to give you to repair your damaged vehicle.

get your car repaired

The next step is the most exciting: Getting your car repaired, yay!

According to the Insurance Information Institute (III), drivers have a right to choose where they’d like their vehicle to be repaired.

Allstate writes that when it comes to paying for vehicle repairs, your insurance company might:

  • “Pay the repair shop directly, or
  • Pay you and let you handle the bill”

do I have to repair my car after filing an auto insurance claim?

If you’re in a minor accident, receive a settlement, then decide the damage isn’t absolutely necessary to be repaired… Can you just pocket the settlement instead?

Simply put, no (not if you want to continue coverage).

According to The Balance, an “insurance company will require repairs if you want to continue your vehicle’s comprehensive or collision coverages.”

Why? “The insurance company does not want to keep insuring a vehicle for future physical damage if the vehicle was already damaged and not repaired [because] a second accident would compound any existing damage… It’s standard procedure for the insurance company to require you to drop physical damage coverage from a vehicle that was not repaired.”

additional factors to consider

It’s also important to consider the following questions when filing an auto insurance claim.

how much is my deductible?

When you invest in auto insurance, you pick deductibles for certain coverages (i.e. collision or comprehensive coverage). Accident or not, it’s important to know the cost of your deductible.

What is a deductible? A deductible is how much money you pay out of pocket before your insurance kicks in.

Consider this example: You have a $250 deductible and $1,500 in damage from a covered accident. Your insurer will pay $1,250 to repair your car, and you’ll be responsible for the remaining $250. Again, your deductible is $250.

do I have rental reimbursement coverage?

Rental reimbursement coverage, also known as transportation expense coverage, is insurance coverage that can help pay for the cost of a rental car or other transportation while your vehicle is being repaired.

Speak with your insurer to find out if you have rental reimbursement coverage; then, if so:

  • How you’ll be reimbursed, and
  • Your policy coverage limits

consider benchmark commercial insurance

At benchmark commercial insurance, we help ensure you’re prepared for any auto incident and that you have coverage in all necessary areas.

We offer auto coverage for the following:

  • Daily drivers
  • Classic autos
  • High performance
  • Race vehicles
  • Trailers, and
  • Motorcycles

Let’s keep the conversation going. Get in touch with our team today, or for more information, read on to find out why auto insurance premiums are increasing.

choosing your cyber insurance plan: why it matters

reviewing Forbes’ “The Importance Of Cyber Insurance And How To Choose A Plan”

We know… If there’s one thing we’ve covered time and time again on our blog, it’s cyber insurance. But for good reason!

Contrary to popular belief, it’s not just large corporations that face cyber attacks. Small businesses are targeted daily and often face more severe financial consequences, as they typically lack the cybersecurity safeguards of larger organizations.

In fact, 60% of small businesses close within six months of falling victim to a cyber attack and according to Hiscox, the average financial cost for a small business to recover was more than $25,000 in 2021. Yikes!

To illustrate the severity of cyber attacks, we’ve pulled a few statistics on some of the biggest data breaches in history:

the biggest data breaches in history

Did you know…

  • In 2013, an attack against Yahoo resulted in the loss of data from more than three billion accounts (Yes, billion!)
  • Approximately 143 million consumers were affected by an attack on Equifax in 2017, which ended up costing them more than $4 billion. (Equifax was found liable for the breach and fined $425 million by the Federal Trade Commission… Ouch!)
  • The data breach of hotel firm Marriott-Starwood resulted in the loss or compromise of information belonging to more than 500 million consumers
  • The 2017 WannaCry ransomware attack contained a virus that infected more than 230,000 machines spanning 150 countries (this caused damage of at least $4 billion…)

The statistics considered, businesses of all sizes should prepare for the growing cybersecurity threat.

How? Cyber insurance is a great first step.

infographic for "choosing your cyber insurance plan why it matters"

In the Forbes article below, you’ll learn more about the importance of cyber insurance, costs, risk assessments, and more.

Read on for the full Forbes article by Mark Roberts.

The Importance Of Cyber Insurance And How To Choose A Plan

In my recent pieces, I have talked about how and why businesses should prepare for the growing cybersecurity threat and ensure their security protocols are adequate for today’s dangers and position to evolve for future risks.

It’s one of those topics that feels like it’s over-discussed. However, considering the increasingly dangerous landscape for businesses, it’s a topic whose importance that can’t be overstated.

The experts have made it clear: Bad actors are increasingly launching cyberattacks in the United States and globally. One doesn’t need a crystal ball to recognize that these cyberthreats could continue to grow.

Cyberattacks are a big business today; just look at ransomware as a service (RaaS), the bad-actor version of software as a service (Saas). As long as bad actors can continue to find companies and organizations to victimize, they won’t cease their efforts.

The Identity Theft Resource Center’s (ITRC) 2021 Annual Data Breach Report revealed there were more “cyberattack-related data compromises” (1,603) in 2021 than “all data compromises” in 2020 (1,108). These attacks increased in nearly every primary business sector.

According to 2021 research from Hiscox, an international specialist insurer, roughly one-quarter (23%) of small businesses suffered a cyberattack in the span of 12 months, and the average financial cost to a small business was more than $25,000.

Now is the time to prepare for potential risks that could impede operations. Too often, businesses delay simply because they don’t know where to start the process.

The most logical starting point is to explore the benefits of cyber insurance, a topic my company consults on for clients and the importance of which I’ve come to understand firsthand as a CMO.

Why does a company need cyber insurance?

Most companies carry at least one form of insurance, such as commercial or business insurance. While this type of insurance protects against property damage or employee-related risks, many companies believe their insurance will cover them should they fall victim to a cyberattack.

However, not all insurance companies cover damages resulting from cyberattacks under these general policies. Instead, they have launched specialized products designed exclusively for cyberattacks.

Unfortunately, there are a few hurdles to attaining these policies; they often require companies to secure a vulnerability or cybersecurity gap assessment. While this review will ensure companies have the basics covered and enable them to secure insurance, it could also result in lower premiums.

If nothing else, these vulnerability assessments can help establish baseline business best practices, such as ransomware training and protocols for phishing scams. These protocols can help identify vulnerabilities before a bad actor exploits them.

Sadly, the biggest threat is also a company’s biggest asset: its employees. Unprepared employees are often an organization’s most significant vulnerability. However, prepared employees can help play a solid defense.

Yes, cyber insurance is an added cost. While companies may be tempted to cut expenses wherever possible amid rising costs in all aspects of operations, cyber insurance shouldn’t be one of them. The cost of a policy pales compared to the cost of an attack.

The cost outweighs the risk.

Nearly three-quarters of companies suffering an attack (71% of businesses in the United States, according to Hiscox) have paid a ransom when targeted. The cost of a ransom could force many businesses to close their doors for good.

No one should automatically bake that cost into their annual budgets, especially when there is an opportunity to turn the tide and bolster their defensive posture.

The Hiscox Cyber Readiness Report 2021 revealed that less than one-third of companies have a stand-alone cyber insurance policy. Given the size and severity of the threat, it is hard to believe the number isn’t significantly higher.

Many companies still mistakenly believe they can fly under the radar, perhaps thinking they aren’t high profile enough for an attack. While massive cyberattacks make headlines, many smaller ones do not. The harsh reality is that some companies won’t realize they have fallen victim to an attack until it is too late.

When securing a cyber insurance policy, businesses must first understand what they need to protect—such as customer data, medical records or financial information. Buying the right policy requires companies to understand their potential shortcomings before evaluating whether the policy protects them.

A risk assessment is crucial to understanding.

Once they have this baseline information, they should examine the policy to understand what it covers—and, more importantly, what it doesn’t cover. For example, are there select risks that aren’t covered, how does the policy define a security event, and does human error or identity theft negate coverage?

On top of choosing an insurance policy, companies should keep their eyes open for risks on the horizon, and leaders should be prepared to communicate with their teams about their roles. Today, everyone plays a role in a company’s defense.

All employees should understand present cyber risks and why it’s vital that they take safety measures seriously. When it comes to the specific safety measures a company puts in place, leaders should ensure employees understand the procedures and buy into the process.

Since the best offense is a good defense, companies should start their preparations today. If you’re not, what are you waiting for?

employee claim being discussed between two women

how EPLI can protect your business

For many business owners, the prospect of a lawsuit by a disgruntled former employee looms like a shadow in the background. If there’s one thing you can use to prevent that, it’s this:

Employment Practices Liability Insurance (EPLI).

Well, of course, there are others but if you’re only going to do one thing– get EPLI coverage. Let’s chat about how EPLI can protect your business in the event of an employee lawsuit.

infographic for "how EPLI can protect your business"

what is EPLI?

Employment Practices Liability Insurance, or EPLI, is insurance that “provides coverage to employers against claims made by employees.”

Policies typically extend coverage to the following:

  • Wrongful Termination
  • Sexual Harassment
  • Wage-Related Claims
  • Claims of Unequal or Unfair Pay
  • Discrimination Claims (i.e. age, race, gender, sexual orientation)
  • Third-Party Claims

Read on for three tips to avoid employment practice issues.

who needs EPLI?

Although some industries are more prone to these types of claims than others, the most common industries to have EPLI claims filed against them include:

  • Construction
  • Healthcare
  • Professional services
  • Restaurant and food services
  • Retail, and
  • Manufacturing

how can EPLI protect your business?

EPLI helps protect your business from financial devastation.

Employee claims—whether the employee is currently or had been previously employed—can be very expensive; and even detrimental to small businesses.

EPLI helps cover the financial costs associated with legal action. Attorney fees and settlement costs are reimbursed by the policy, which means your business does not have the unexpected financial burden of paying off employee claim-related legal fees.

turn to benchmark commercial insurance

Don’t know whether you have EPLI coverage or the quality of it? Our team at benchmark commercial insurance can help.   

We’ll review your coverage and give you recommendations free of charge. No hard sell, just insights. 

For those who want to learn more, including if their business needs EPLI coverage, read our article “employment practices liability insurance — do you need it?

man at a desk reviewing insurance contract

how much should I pay for cyber insurance?

So, you’re a small business owner asking yourself, “How much should I pay for cyber insurance?” You want to ensure your business is protected, but without excess or unnecessary coverage.

So, how much will it cost? We’re sure this isn’t the answer you want to hear, but in short, it depends.

The cost of your cyber insurance will depend on your business type and the level of risk you’re exposed to.

(But more on this later!)

Below, we will:

  • Provide a general estimate of how much cyber insurance costs for businesses in the United States
  • Cover why the cost of cyber insurance is increasing, and
  • Discuss what factors influence how much a business owner pays for cyber insurance

the average cost of cyber insurance

According to AdvisorSmith’s research conducted in 2019, the average cyber insurance cost is $1,485 per year (or $124 per month) for $1 million in coverage, with a $10,000 deductible.

To come up with this figure, AdvisorSmith used quote estimates and rate filings from over 43 insurance companies nationwide. Premiums ranged from $650 to $2,357 for cyber insurance for companies with moderate cyber risk.

This figure, however, is not a hard-and-fast rule and will vary based on several elements regarding your business and the cyber insurance market.

the cost of cyber insurance is increasing… why?

So, the cost of cyber insurance is increasing… But why? Here’s a shorthand list.

  • Cyber attacks are becoming more and more common across the board; cyber extortion has jumped by 150% in one year and cases of malicious breaches and unintentional disclosure increased by 18%
  • To contain potential lawsuits, businesses will rely on outside attorneys to handle cyber response
  • Executives do not know how to properly insure their businesses from cyber risk (Munich RE reports that 81% of C-level respondents think their company is not adequately protected against cyber threats and only 34% of C-level respondents have been in contact with their insurers)

Therefore, as ransomware attacks continue to crowd the cyber insurance market, coverages are expected to rise 40% to 50% for optimal risks and 50% to 100% or more for less optimal risks.

Even so, while cyber insurance premiums are rising, policies are covering less.

how much does cyber insurance cost?

Again, there’s no magic number for how much each business owner’s insurance will cost. That’s because every business is different.

infographic of how much should i pay for cyber insurance

Moreover, this is an especially tricky question as the cyber liability underwriting market remain

s hard.

But what factors influence how much you will pay for cyber insurance as a business owner? At benchmark commercial insurance, we identify eight main determining factors.

industry

The industry you’re in is arguably the most important element in determining cyber insurance costs.

Depending on the industry you’re in, you’ll be placed into one of three tiers—low, medium, and high—of risk related to the type and amount of data your business stores.

To provide an example, a consulting firm would likely fall into the category of low risk whereas a business in construction, the health and wellness space, or the cannabis industry would be considered high risk.

location

The location of your business will affect how much you pay for insurance. Why? The cost of insurance differs from state to state because of differences in legal requirements, economic conditions, competition, etc.

For example, cyber coverage will likely be cheaper in Michigan than in Minnesota.

size

How big is your business? Typically, the larger your business is (i.e. more employees, clients, and greater sales), the more expensive your premiums will be. Why? More employees equal a higher likelihood for a cyber-attack to occur.

amount of sensitive data stored

If your business stores sensitive data, you can expect to pay more for cyber insurance. Sensitive data, to name a few examples, might include:

  • Social security numbers
  • Addresses and phone numbers
  • Credit and debit card numbers
  • And more

For example, a hospital—which houses an immense amount of personal data—would pay more for cyber insurance than, say, a mom-and-pop grocery store with a small customer base and few data collection points.

revenue

The more money your business makes, the higher odds a cybercriminal will be interested in targeting your business, according to an insurer. This considered, businesses with higher revenues should anticipate paying more for cyber insurance.

security defenses your company has taken

Security protocols, software security, employee training… Any preventative measures that your business has taken to stay safe from cyber attacks equal a brownie point in an insurer’s eyes. Businesses that prioritize safety are likely to pay less for cyber insurance.

history of cyber insurance claims

If your business has a history of cyber insurance claims or has been previously attacked, you might face higher premiums.

the level of coverage that you choose

Lastly, your coverage limits and deductible will affect the amount you pay for coverage. In short, the higher your coverage limits, the higher your premiums. On the other hand, paying a lower deductible would result in paying less in the event of cybercrime but paying a greater premium.

Businesses should consult their brokers to determine which cyber security options are best suited for their unique business needs. Interested in learning more? Check out our article on what cyber insurance actually covers.

man handing someone a pair of housekeys

homeowners are underinsured: what can you do?

Did you know millions of homeowners across the United States are underinsured? However, they often don’t know this until it’s too late.

As a homeowner, the consequences of your home being underinsured can be detrimental. Even so, according to Nationwide, about two out of every three homes in America are underinsured; meaning, millions of American homeowners are at risk of significant financial loss should a disaster ever affect their home.

As a homeowner, how can you make sure your property is adequately insured?

Let’s discuss.

underinsurance today

Underinsurance is a nationally recognized problem today—and is only getting worse due to rising inflation and increased building costs.

To illustrate, a study showed that over two-thirds of houses in the 2021 Marshall Fire near Boulder, Colorado, were underinsured from between $98,967 and $242,670 and therefore, deemed total losses.

So, what can you do to avoid being underinsured as a homeowner?

how to avoid underinsurance

Luckily, underinsurance can be prevented. Here are a few tips that homeowners can take to avoid underinsurance.

ensure your policy is updated

Have you completed any home renovation or remodel projects recently? If so, be sure to notify your insurance company. Usually, your coverage will need to be adjusted to adequately protect your home.

In fact, according to the Independent Insurance Agents and Brokers of America, one in four projects increases the value of a home by more than 25%. (Yes, we said 25%!)

PS: And don’t limit these updates to only big projects! You should notify your insurance company if you decide to add a deck, pool, trampoline, woodstove, or even a dog to your family! Doing so can help ensure you won’t pay for damages or injuries from these new features.

avoid home insurance coverage minimums

Lenders require homeowners with mortgages to carry a certain minimum amount of homeowners insurance coverage.

This minimum level of coverage typically sits at about $100,000; however, experts recommend three times this amount. Wow! 

evaluate your exclusions and endorsements

Exclusions and endorsements illustrate the parts of your policy that either give or take away coverage.

keep track of your personal property

Homeowners’ policies typically cover a percentage of one’s personal property.

Take inventory of your personal property periodically. If the value of your personal items exceeds your coverage limit, we’d recommend purchasing additional coverage (called an endorsement or rider).

Today, it is so simple to use your cell phone to take an interior home video. Don’t be shy. Open the drawers, cupboards, and closets. Get it all on video.

infographic for "homeowners are underinsured: what can you do?"

get in touch with our team at benchmark commercial insurance

These steps are just the tip of the iceberg in terms of ensuring your home is properly insured. It can be difficult and even overwhelming to do this all yourself, which is why our team at benchmark commercial insurance is here to help.

Reach out to our team today to see if your home is underinsured. Then, for business owners, continue reading to find out how to insure your business.

cut out electric vehicles sitting on a desk all white with one green

electric vehicles: what you need to know

Times are changing. No more than five years ago, seeing a Tesla driving alongside the freeway was considered a rarity. Today, drivers are surrounded by E-vehicles (electric vehicles or EVs) day in and day out.

Considering the new wave of electric vehicles, what do you need to know about insuring these vehicles? Is there anything additional to consider? Let’s discuss.

what is an electric vehicle?

An electric vehicle sometimes called an E-vehicle or EV, is an automobile that operates on an electric motor* rather than an internal-combustion engine powered by fuel and gasses.

EVs are known for being quieter, without exhaust emissions, and produce fewer emissions overall.

the e-vehicle market continues to grow

The electric vehicle market has expanded beyond Tesla, with many other automobile manufacturers contributing to the E-vehicle wave.

Electric vehicles are here to stay—and the statistics prove it. Back in 2012, a mere 120,000 electric cars were sold worldwide. Jump forward less than ten years ahead to 2021, and more than 120,000 E-vehicles were sold in one week, according to the International Energy Agency.

This, however, brings us to an interesting question: What insurance considerations should you make when purchasing or leasing an E-vehicle?

infographic of electric vehicles what you need to know

insurance elements to consider when owning an electric vehicle

The biggest thing to note about electric vehicles and insurance coverage is that EVs can be more difficult to insure compared to a standard, gas-powered car.

Why is this? There are three reasons. E-vehicles face: 

  • High damage and repair-related exposures
  • Increased coverage costs
  • A shrinking pool of potential carriers

Let’s discuss each in a little more detail.

high damage and repair-related exposures

Electric vehicles face extremely high damage and repair-related exposures. Although there are significantly fewer moving parts in an EV, their equipment is much more complex than in a gas-powered vehicle; meaning that it will likely cost more to repair or replace the EV if an accident occurs.

increased coverage costs

As far as insurance goes, high damage and repair-related exposures mean increased rates for policyholders with comprehensive and collision coverage.

a shrinking pool of potential carriers

Although EVs are increasing in popularity, electric vehicles still make up a relatively small portion of the automobile market today. Carriers are mindful of the risks of insuring an E-vehicle, including high damage and repair-related exposure, and liability exposures.

This considered, the number of potential carriers to insure your E-vehicle is fewer than would be for traditional vehicles.

a final word

As E-vehicles continue to increase in popularity, as will the need for carriers and insureds to understand the differences in insuring E-vehicles vs. traditional gas-powered vehicles.

Interested in learning about e-bike insurance coverage? Read on in our article “e-bike insurance coverage: what you need to know.”

*An EV is not to be confused with a hybrid. The primary difference between the two is an electric car runs exclusively on battery-stored electric energy whereas a hybrid runs on a combination of electricity and conventional fuel.