Tag Archive for: Insurance Audit

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.

men sitting at desk reviewing contract's boilerplate clause

your guide to boilerplate clauses

Using precise contractual language is important—especially when it comes to insurance agreements. By using straightforward language, you can avoid:

  • Legal disputes
  • Misinterpretation, and
  • Costly mistakes

Today, we’re going to discuss an important piece of contractual language: boilerplate clauses. Here’s your guide to boilerplate clauses.

infographic for your guide to boilerplate clauses

what is a boilerplate clause?

Boilerplate clauses, sometimes called standard, miscellaneous, or general clauses, are found at the end of most legal documents. Since these elements are lumped together at the bottom, it’s common for boilerplate language to be overlooked.

However, boilerplate clauses can serve an important purpose in any contract. 

Boilerplate provisions can address a range of things but are most commonly known as the saving grace if a dispute ever arises between the two contracted parties.

Boilerplate language defines the relationship between the parties and can help determine “what happens if a document is declared unenforceable, how disputes will be resolved, which laws govern the contract, and more.”

boilerplate clause examples

To provide some examples, below we will detail common boilerplate language that can be found in a contract.

severability clause

A severability clause “keeps the remaining portions of the contract in force should a court declare one or more of its provisions unconstitutional, void, or unenforceable.”

jurisdiction clause

A jurisdiction clause determines in which state or county the contracted parties have the right to settle legal disputes.

governing law clause

A governing law clause is “a clause used in legal agreements where you can declare which rules and laws will govern the agreement if legal issues arise.”

dispute resolution clause

Identifies how a dispute between the two parties will be handled if one arises. For example, through negotiation or meditation before court action.

prevailing party clause

A prevailing party clause states that in the case of a legal dispute, the losing party will pay the legal fees for the winning party.

Of course, there are many other clauses that fall under boilerplate language. This is why it’s important to consult a professional about the contractual language used in your insurance agreements—so no stone goes unturned.

the importance of routine insurance audits

As we’ve mentioned, the wording used in an insurance contract is very important. Legal wording can guide the obligations of each party as well as how these specific obligations are interpreted.

For this reason, at benchmark commercial insurance, we recommend that you take a hard look at contractual language—preferably, with a professional at your side.

It is important to not only look at a contract as it’s being created but also to conduct routine insurance audits. This way, you can review and adjust your policy as needed.

Interested in learning more? Read on to find out how to stabilize or reduce your insurance costs.

"workers' compensation" written on a notepad sitting next to money on a desk

your workers’ compensation policy annual carrier audit

Workers’ compensation insurance coverage is an important part of business protection for any employer. But have you heard of a workers’ compensation policy audit? Here’s what you need to know about your workers’ comp policy audit.

why do you need workers’ compensation policies?

So, what is workers’ comp, and why do you need it as an employer?

Workers’ compensation is “insurance, paid by employers, providing wage replacement and medical benefits to employees who are injured during the course of working for the insured.”

Why do you need workers’ comp insurance? Well, there are a couple of reasons, First, investing in workers’ compensation helps businesses avoid hefty costs of an employee’s medical expenses and lost wages following a workplace injury or illness.

If an employer failed to have workers’ compensation (which is a criminal offense according to Section 3700.5 of the California Labor Code), they’d be responsible for all medical expenses out of pocket—which, depending on the illness or injury, could cause significant financial harm to their business.

Moreover, workers’ compensation wages and benefits are provided in exchange for removing the employee’s right to file a lawsuit against their employer.

what is a workers’ compensation audit?

A workers’ compensation audit is an annual review of records. These audits are requested by an insurance company to verify that your business has paid the correct premium for workers’ compensation insurance.

how does a workers’ compensation audit work?

Workers’ comp audits can be conducted:

  • In-person
  • Over the phone
  • By mail

How your audit is conducted depends on your auditor and business type. 

Moreover, audits “determine if the payroll and class codes quoted at inception accurately reflect the actual payroll and scope of work performed during the policy period. Audits also ensure that sub-contractors had their own coverage in place.”

If records don’t match up, the price of the workers’ comp insurance will be adjusted for the policy year.

why do you need a workers’ compensation audit?

So, why do you need a workers’ compensation audit as a business owner?

As mentioned above, your initial workers’ comp premium estimate may not always match the actual payroll and scope of work for your business. Depending on a variety of factors throughout the year, this payroll figure might actually land below or above your estimate.

A workers’ comp audit is necessary—and is actually required by most state regulators—so that adjustments to the initial premium can be made if necessary.

how to prepare for an audit

Now you know what a workers’ compensation insurance audit is, how it works, and why you need one. Let’s briefly discuss how to prepare.

  1. Gather Your Records: Your auditor will, of course, need access to your financial data for the policy period (Think: General business information, payroll records, insurance records, cash disbursement records, etc.)
  2. Revise Job Descriptions: Workers’ comp premiums are determined by the risk that your employees face at work and on payroll. Revising employee job descriptions, and knowing what each role does thoroughly, is a great way to help prepare for an audit.
  3. Ask Questions: When the time comes for your audit, don’t be afraid to ask questions. Review all documents clearly and only provide the information requested, as to not create additional work for your auditor.

Infographic of your workers’ compensation policy annual carrier audit

Interested in learning more? Read on for information about workers’ compensation in the hybrid workforce.