Unit of 1 - Breakfast Club: Insurance Roundup

by Andrea C. Carrero

The October Unit of 1 Breakfast Club meeting featured several speakers discussing various insurance information of interest to Units of 1. Presenters for the meeting, which was held at Eastern University in St. David?s, included Lisa Broadbent of Nationwide Financial and Dennis Drake of Mid-Atlantic Brokers. Unit of 1 member Mike Brady of Mariner Financial Services, who was set to speak about disability insurance, organized the meeting.

Broadbent discussed commercial, residential and automobile insurance.

For commercial insurance, she said the policy should cover your business property for at least basic perils, such as fire, lightning, windstorm and hail, explosion, sprinkler leakage, vandalism, malicious mischief, and smoke. Additional coverage to consider might include riot and civil commotion, aircraft, vehicles and structural collapse.

Most commercial polices, she explained, do not include coverage for content such as computers, phone systems, money, signs, employee theft and loss of income. These items must be endorsed on the policy, she said.

Other commercial endorsements to consider, she said, include:

Replacement cost

High-value items

Law and ordinance

Water backup

Employee dishonesty

Loss of business income

Extra expense coverage (for the suspension/continuance of business operations)

Broadbent said that some in-home businesses could be covered under a homeowner?s policy with an endorsement for incidental occupancy.

Additional coverages that you can purchase as separate policies, she said, include worker?s compensation, a commercial umbrella policy that extends the liability limits of your underlying policies and errors and omissions insurance.

Broadbent then discussed automobile policy coverages, defining the various coverages available for the policies and identifying some coverages that may or may not be optional for your policy. These can include rental reimbursement, towing and labor, hired auto, non-owned auto and car phones. Broadbent also listed the discounts that may apply to some automobile policies, such as home and car, good student, long term, safe driver, airbags, alarms, accident free, defensive driving (Delaware only), multi-car and annual mileage.

Lastly, Broadbent told attendees that if they hire subcontractors to require a certificate of insurance from the subcontractor that shows limits equal or greater than your limits of liability. She also stressed that if your subcontractor has employees to ensure that they carry worker?s compensation insurance. This will protect you, she said, if there is ever an injury or liability occurrence caused by the subcontractor.

Dennis Drake of Mid-Atlantic Brokers then discussed health insurance.

Among the current options offered to Units of 1, Drake said, are group policies such as an HMO, PPO or POS contract or an individual contract such as a PPO or Medical Savings Account (MSA).

Drake detailed the pros and cons of group versus individual policies, which he said include:

Group coverage pros
Guaranteed issue
First-dollar coverage
Good maternity coverage

Group coverage cons
Higher rates
Restricted to network
High renewals because of pooling

Individual coverage pros
Individually underwritten (can also be a con)
Lower rates
Not always restricted to network
Some plans are tax-advantaged

Individual coverage cons:
Individually underwritten
Higher co-pays and deductibles
Maternity coverage is not very good

Drake then discussed MSAs, which are personal accounts set up to pay for qualified medical expenses. The account works together with a catastrophic health plan and can offer tax savings, according to Drake.

With an MSA, you choose a deductible (e.g., $1,650 or $2,500 for single coverage, $3,300 or $4,950 for family coverage) and them you make tax-deductible contributions (i.e., 65% of deductible for singles, 75% for family). When you need the funds you withdraw them, Drake said, tax free and penalty free. Funds can be used to meet the insurance deductible, to pay for qualified medical expenses (such as eyeglasses, dental care, chiropractic care, alternative medicine and braces) or to pay for long-term care insurance.

For more information about commercial and residential insurance, contact Broadbent at (302) 731-0044 or lisabroadbent_agency@nwagent.com. For more information about health insurance and medical savings accounts, contact Drake at (302) 571-0888 or dennis@mid-atlanticbrokers.com, or visit his website at www.mid-atlanticbrokers.com.

Mike Brady, who was to present information about disability insurance, was unable to provide information the day of the meeting due to time constraints. To contact him, call (302) 691-0422 extension 106 or email him at finsrv@aol.com.

Andrea C. Carrero is president and founder of Word Technologies Inc. (www.wordtex.com), which provides custom technical documentation, training and related services. She can be reached at andrea@wordtex.com.