Tag Archive for: apex proven process

5 Common Mistakes Businesses Make When Choosing Commercial Insurance

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Commercial insurance is a vital tool for protecting businesses against a wide range of risks. However, choosing the right insurance coverage can be a daunting task, especially for those who are not familiar with the complexities of the insurance industry. In this blog post, we’ll take a look at five common mistakes businesses make when selecting commercial insurance and offer some advice on how to avoid them.

1. Failing to Assess Risks Adequately

One of the most common mistakes businesses make when selecting commercial insurance is failing to assess their risks adequately. Every business is unique, and each has its own set of risks. For example, a construction company will have different risks than a restaurant or a retail store. It’s essential to conduct a thorough risk assessment to identify the specific risks your business faces. This will help you choose the right insurance coverage to protect your business against those risks.

2. Choosing Coverage Based Solely on Price

Another mistake businesses make when selecting commercial insurance is choosing coverage based solely on price. While price is an important factor, it should not be the only consideration. Cheaper policies may not provide adequate coverage, leaving your business vulnerable to financial losses if something goes wrong. Make sure to compare different policies and choose one that provides the coverage you need at a price you can afford.

3. Not Reading the Policy Carefully

Insurance policies can be complex, and it’s essential to read them carefully before signing up. Unfortunately, many businesses fail to do so and end up with coverage that doesn’t meet their needs. It’s essential to understand what the policy covers and what it doesn’t. Make sure to ask your insurance provider to explain any terms or conditions you don’t understand.

4. Not Considering the Reputation of the Insurance Provider

The reputation of the insurance provider is another important factor to consider when selecting commercial insurance. Make sure to choose an insurance provider with a good reputation and a track record of paying claims promptly. You can research insurance providers online or ask for recommendations from other business owners.

5. Not Reviewing Coverage Regularly

Finally, many businesses make the mistake of not reviewing their insurance coverage regularly. Your business may change over time, and your insurance needs may change as well. Make sure to review your coverage regularly and make adjustments as necessary. This will ensure that you always have the coverage you need to protect your business against risks.

Other Factors to Business Owners Should Consider When Choosing Commercial Insurance

In addition to the five common mistakes discussed above, there are several other factors that business owners should consider when choosing commercial insurance. For example, the appropriate amount of coverage and deductible are important considerations. Additionally, businesses need to determine the type of coverage they need and understand the exclusions and limitations of their policy. 

Working with an insurance broker or agent can also help businesses navigate the complexities of the insurance industry and find the right coverage at the right price. By carefully considering these factors, business owners can ensure they have the protection they need to succeed in today’s ever-changing business environment.

In Summary

In conclusion, selecting the right commercial insurance coverage can be a daunting task, but avoiding these common mistakes can help you make an informed decision. Always assess your risks, compare policies, read the policy carefully, choose a reputable insurance provider, and review your coverage regularly. With these tips in mind, you can protect your business against a wide range of risks and ensure your long-term success.

Where Can I Find Commercial Insurance in San Diego?

Apex was founded to fill the service and consultative gap left by agency consolidations in the insurance marketplace. These consolidations have left customers who are used to a boutique service approach with no personal connection to their team.

Apex brings the high-touch service proposition back to San Diego businesses and beyond.

At Apex Risk & Insurance Services, we use the Apex Proven Process to learn about your business, strategize to assemble the right program for you, and use our deep industry and market knowledge to leverage the best pricing and coverage. 

This leaves small business owners with more time to do what they do best: Run their business knowing that their company and employees are protected.

Check out our commercial insurance policies, then, read on to learn what makes us different.

Risk Assessment and Executive Protection

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Risk Assessment plays a crucial role in Executive Protection. In order to protect someone, you need to be aware of the risks that are threatening them on a day-to-day basis. Unfortunately, it is one of the most overlooked areas for protecting high-profile executives. 

As with many preventative measures, people don’t go through the effort of performing a thorough risk assessment for various reasons. This often includes a lack of resources and time, resistance to a change in lifestyle, complacency due to a current lack of threats, and not wanting to engage in something that appears complex from the outside.  

In any business, you need to identify risks before you can mitigate them. It’s no different with protecting an executive. In this article, we’ll look at what risk assessment is, how to perform one the right way, and how the 7Ps can give close protectors the tools to keep executives safe from mental and physical harm. 

What are the Five Types of Risk Assessment?

The five categories of risk assessment are often used together to create a comprehensive plan to mitigate risk.

A Qualitative Risk Assessment is an assessment that relies on the expertise and judgment of a professional to evaluate the potential and severity of a threat. 

This evaluation is often used as an initial assessment because it’s quick and efficient. A gauge of risk is kept simple and often categorized as either low, medium, or high.

A Quantitative Risk Assessment uses numerical analysis to evaluate risk and is seen as a more objective way to assess potential threats.

This evaluation provides a more detailed and accurate assessment, but is more time-consuming and costly. Quantitative assessments present data in the form of risk matrices and heat maps.

A Generic Risk Assessment is similar to a Qualitative Assessment, in that it is often used as an initial template or outline before providing a more comprehensive evaluation. It covers common hazards and threats for an executive. 

A Site-Specific Assessment is a complex evaluation of a specific location or environment an executive may be in.

If an executive is traveling to a new location, there should be a site-specific assessment to mitigate any potential threats. There should also be routine site-specific assessments for familiar environments, such as their home or place of work.

A Dynamic Risk Assessment is used to respond to changing environments and threats in the current moment. It requires skilled security workers that have the judgment and confidence to make decisions on the go. 

The 5 Steps of Performing a Risk Assessment

Now that you know the different types of evaluations, you can move on to performing a risk assessment. This process has been broken down into five steps and is repeatedly used in a variety of industries. 

Identify Hazards

In order to identify potential threats for an executive, you need to know them inside and out. Who they are, who they interact with, the locations they visit, and their personal history are all good starting points when searching for hazards. 

Identifying patterns in their overall lifestyle will be crucial when gathering the information needed to identify risk. 

Assess Risk

Once you’ve gathered information and identified potential hazards you can assess the level of risk. Qualitative and generic risk assessments are good starting points, but to get the most accurate level of risk severity you need to use quantitative, dynamic, and site-specific evaluations. 

Control Risk

Now that you know the severity of the risks identified, you can put controls in place to reduce the possibility of harm to an executive. 

These controls may include:

  • Regular risk assessments to stay on top of changing environments.
  • Developing a comprehensive security plan.
  • Screening and background checks for all people close to the executive.
  • Physical security measures such as bodyguards, secure transportation, and technological security. 
  • Effective and regular communication between the executive and security team.

Record 

Following the control phase, you need to record all data collected and created.

Documenting potential threats in the identifying hazards step can help develop a proper security plan in the present and future. Proper documentation can also lead to improving procedures by identifying trends and patterns in the executive’s life. And lastly, documentation provides evidence that the security team did their due diligence when protecting the executive.

Review Controls

The final step is making sure the controls you’ve put in place are mitigating risk for the executive. Constantly assessing risks to make sure your controls aren’t becoming ineffective is one of the most important things you can do to ensure safety. 

7 Ps of Close Protection

Close protection and executive protection are often seen as interchangeable terms. However, executive protection refers to an overall system while close protection specifically refers to bodyguards and security officers that stay close to the executive.

When it comes to close protection, the most valuable component is that the security team knows its client well. A set of guidelines that are commonly used for a team to know their client is the 7 Ps. 

These include:

  • People: Close relationships with the executive such as partners, family, and friends.
  • Places: All locations the executive frequently visits.
  • Personality: Understanding the executive’s behavior and how it may increase or decrease risk.
  • Prejudices: Personal prejudices can escalate situations or cause the executive to act in an irrational manner, thus putting themselves at risk.
  • Personal History: An extensive list that may include family background, education, career, and achievements. Usually, anything outside of the other categories falls here.
  • Political/Religious views: These beliefs can be highly polarizing. Knowing the executive’s beliefs can help determine risk depending on the surrounding location and environment.
  • Private Lifestyle: If the executive is in the public eye, they may do things they don’t want the public to know. Being informed of what these things are can help you protect the information from getting out. 

The 7 Ps allow security teams to properly assess risk for their client and create a thorough security plan accordingly.

Want to Learn More?

Apex brings the high-touch service proposition back to San Diego businesses and beyond.

At Apex Risk & Insurance Services, we want you to know and understand your options. We prioritize transparency and provide custom solutions to meet your insurance needs.

Risk Management in the Cannabis Industry

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There aren’t a lot of resources available for cannabis business owners to protect themselves. Traditional insurance companies and banks have been hesitant to get involved due to fear of being penalized by the federal government and that the industry is a newborn to the global marketplace.

Even with legal issues aside, there are still no standardized and widely accepted risk management tools for the industry. This prevents insurers from being able to properly gauge the amount of coverage they should provide. And if any industry needs insurance and risk management, it’s cannabis. 

In this article, we’ll look at what risks to be aware of in the cannabis industry, what’s being done to mitigate risks at a policy level, and how insurance companies are finally playing a part in protecting cannabis business owners.

Risks in the Cannabis Industry

The production and sale of cannabis is a complex process that has plenty of risk from the moment a seed is planted to the point of sale. Awareness of the inherent risks throughout all facets of your business will help you put proper protections in place and be prepared for potential disasters. 

Employee Theft

Sadly, employee theft is common for a lot of cannabis business owners.

First and foremost is that the cannabis industry is largely cash-based. Because of its federally illegal status, most banks refuse to work with cannabis companies in any capacity, forcing businesses to only operate in cash and lots of it. It’s far easier and even more tempting, for employees to steal cash since it’s more probable to go undetected when compared to businesses that can operate with cashless payments. 

The nature of the inventory also invites itself to all kinds of theft. Due to how expensive and in-demand cannabis products are, they are at an increased risk of being stolen. 

Lastly, the high turnover rate of the industry presents a problem.  A report by the cannabis data company Headset found that 55% of cannabis retail workers left within 12 months. It’s difficult to establish trust or perform proper background checks when the turnover rate is so high. 

Product Tampering 

From seed to customer consumption, cannabis production requires an extensive supply chain that’s exposed to many different factors. One of these factors is an increased risk of product tampering, which exposes your company to serious liability. 

Contamination or unauthorized additions could happen at any point during the production process. A tampered product could lead to serious legal and financial repercussions if it harmed a customer or made them ill. Having the right insurance to protect yourself and your business from a financial catastrophe is more important than ever.

Another potential issue with product tampering is what happens after you sell the product. After-sale product tampering for black market sales is still prevalent, and even though it’s out of your hands, your company could still be held liable. 

Adhering to Regulations

The cannabis industry is developing fast, and it’s easy to get overwhelmed by all the changing laws that come with it.

Compliance regulations change frequently and vary from state to state. The regulations are across all areas of the industry; cultivation, processing and manufacturing, distribution and sales, testing, and even advertising. If a business is found to be out of compliance with state laws in any of these categories, it could face hefty fines, and potentially be put out of business.

Unfortunately, many small cannabis businesses are not prepared with a compliance plan and don’t monitor the constantly changing regulations. It’s vital to do so in order to avoid damaging fines. 

What’s Being Done to Mitigate Risk?

A variety of bills are currently being proposed to reduce the risk for cannabis companies. Insurance companies, including Apex, are also offering to insure cannabis companies from the risk they encounter in their day-to-day operations. 

Clarifying Law Around Insurance Marijuana (CLAIM) Act

The CLAIM Act is a proposed bill that would allow insurance companies to do business with cannabis businesses without fear of federal prosecution. The intent of this act is to reduce the amount of risk cannabis business owners face.

The act would also protect employees working for insurance companies that are engaging in business with a cannabis company. It’s been passed in the house but continues to be voted down in the Senate. 

Secure and Fair Enforcement Banking (SAFE) Act 

The SAFE Act is a proposed bill that would give cannabis companies access to banking services and prohibit penalization for insurance companies working in the industry. Without the possibility of federal prosecution, banks could finally provide cannabis owners with financial safety nets to mitigate risk.

Unfortunately, like the CLAIM Act, this bill has passed the house but recently failed to pass the senate for the third time in late 2022. If either of the bills listed passed, cannabis companies would gain access to a wide range of services to protect themselves. This could also lead to more trust from the investor community, allowing them more financial leeway. 

Insurance Companies Entering the Market

The good news is that some insurance companies are finally insuring certain cannabis companies in legal states. Insurance is a vital risk management tool that helps protect against a variety of potential losses and liabilities. Common insurance coverage for a cannabis company could include product liability, general liability, property insurance, equipment breakdown, loss of income, and much more. 

Interested in Insurance for Your Cannabis Company?

If you’d like to learn more about cannabis company insurance, or what we offer at Apex, contact us today. We love getting to know our clients and how their business works to get them the best pricing and coverage.

What to Expect from Cyber Insurance in 2023

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The cyber insurance industry has been facing challenges in recent years due to rising rates, mass cyber-attacks, and stricter policy terms. However, trends at the end of 2022 suggest that there may be positive developments on the horizon for both policyholders and insurance providers. 

This article will explore the current state of cyber insurance, the stabilization of rates, advanced underwriting techniques for 2023, government involvement in the industry, and how to choose the best policy for your needs in the upcoming year.

Current State of Cyber Insurance 

According to a report from Fortune Business Insights, the global cyber insurance market is expected to grow from 12.83 billion in 2022, to 63.62 billion by 2029. More and more businesses are opting for cyber insurance every year as they become more reliant on data to operate, and as cyber attackers become more sophisticated in their attacks. 

A 2022 report from the National Association of Insurance Commissioners (NAIC) claimed that data breaches were up 68% in 2021 when compared to the previous year. And that’s not just in certain industries. Companies from all sectors are experiencing an increase in ransomware and supply chain attacks. 

These increased attacks led to a 79% increase in premiums in the first half of 2022. Insurers are now thoroughly examining a company’s cybersecurity with far more detail and taking extra precautions to reduce losses. 

Some of these precautions include:

  • Tightened Policy Terms: Cyber coverage used to often be included with commercial property and casualty policies, now many insurers have opted to offer cyber coverage separately.
  • Lower Coverage Limits: Insurers are reexamining their coverage limits
  • Documentation may be required: Some companies require documentation to evaluate a client’s cyber program before giving coverage

To read more about recent changes in cyber insurance check out our blog here.

Rate Stabilization

Rates in the cyber insurance industry have soared in the past few years. While we can’t guarantee when and how rates will change, there are optimistic trends happening at the start of 2023. 

Rate hikes are currently decreasing across the cyber insurance market because of a few factors. 

The first is better cybersecurity practices from companies following an increase in cyberattacks. Some of these practices, and ones that are wise to follow for any business owner, include:

  • Password management tools that ensure employees are using strong passwords
  • Two-Factor Authentication 
  • Updated software and firewalls
  • Training employees on security threats
  • Data encryption 

The other reason for rates beginning to stabilize is the increase of insurance companies joining the cyber insurance market. This is creating a more competitive environment and lowering the rate of premiums as there’s a larger supply of insurance options. 

With increased cybersecurity and competition, you can expect businesses in 2023 to have insurance rates relative to the cybersecurity measures they have in place.  

Advanced Underwriting 

In previous years, we’ve seen cyber insurance companies underwrite with a traditional “outside-in” approach. Meaning they primarily focus on the external threats of cyberattacks and then view the security measures the company has in place.

This approach is changing fast. It’s quickly becoming the standard for insurance companies to evaluate potential cyber insurance policyholders with “inside-out” underwriting. This is a more comprehensive and effective approach that looks deeply at an organization’s ability to manage and mitigate risks. 

An inside-out approach looks at your business like a cyber-attacker would, and primarily focuses on your network security, data protection, employee training, and incident response plans. This provides more objective and transparent data within the underwriting process to give a more accurate evaluation. 

Government Intervention

Unfortunately, there have been a few high-profile, national cyber attacks in recent years. This has forced policymakers to pay special attention to cybersecurity for businesses across all industries, especially ones that deal with critical infrastructure. 

In March 2022, the Cyber Incident Reporting for Critical Infrastructure Act (CIRCIA) was signed into law. Under this law, all companies in critical-infrastructure sectors will need to report incidents within 24-72 hours depending on the incident. It will be vital for businesses to be organized with their cybersecurity so they can report any issues in a timely manner. 

The Federal Trade Commission, Food and Drug Administration, Department of Transportation, Department of Energy, and Cybersecurity and Infrastructure Security Agency are all currently working on additional regulations for cybersecurity, and it’s possible some of these will come into effect in 2023 as cyberattacks continue to evolve.

How Should I Choose a Policy for 2023?

The first, and most important thing, when choosing a cyber insurance policy is to determine what your company’s needs are. 

Reimbursable expenses that insurance companies typically provide include: 

  • Investigations into the cause of the breach
  • Business losses arising from a breach
  • Privacy protection and breach notification 
  • Lawsuits and extortion

It’s important to figure out what expenses you want to be covered in your insurance plan before moving on. If you’re still unsure what exactly your business may need, talking to an experienced insurance team can help guide you through the process. 

After you know what your company needs, it’s time to ask questions about the policy itself. These include:

  • Take a look at the plan’s deductibles, just like you would any other insurance
  • Understand if the policy is stand-alone or add on
  • Ask if the policy covers accidental actions, as a lot of data breaches can be accidentally caused by employees.
  • Ask if the policy covers third-party service providers

All these questions are a great start to seeing what type of coverage you need. If you want a more detailed look at choosing cyber insurance, take a look at our blog here.

Have More Questions About Cyber Insurance in 2023?

Apex Risk & Insurance Services was specifically founded to fill the service and consultative gap left by agency consolidations in the insurance marketplace. These consolidations have left customers who are used to a boutique service approach with no personal connection to their team.

Apex brings the high-touch service proposition back to the San Diego business community and beyond. If you have any questions about cyber insurance in the new year, contact us today.

How Much Excess Liability Insurance Do Manufacturers Need? 

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Having adequate liability insurance is crucial in the manufacturing industry. However, sometimes general liability insurance might not be enough to keep your business protected. Enter excess liability insurance.

Excess liability insurance is coverage provided for significant unexpected events that can have potentially catastrophic results on your business, ranging from auto accidents to product liability claims.

Excess liability insurance provides just that – excess coverage limits in addition to the underlying liability policy. This additional coverage can be the difference in protecting your business from bankruptcy. 

Read on to learn what excess liability insurance covers, who needs it, and how to know how much coverage you need.

What Does Excess Liability Insurance Cover?

An excess liability insurance policy, also known as excess liability coverage, provides financial protection and higher policy limits if a claim is made that exceeds the limit of an underlying liability policy. 

In simple terms, excess liability insurance provides additional coverage on top of your existing policy.

For example, let’s say you have a $1 million general liability insurance policy and face a $1.75 million claim. You and your business would have to cover the $750,000 that exceeds your general liability limits.

However, if you had an excess liability policy of $1 million on top of your general liability insurance, your excess liability coverage would cover that $750,000 loss. This would keep you financially protected. 

Who Needs Excess Liability Insurance?

Excess liability insurance protects your business from significant losses and reduces the chance that a lawsuit could bankrupt your business. 

Many business owners choose to have excess liability coverage because they face substantial risks, such as:

  • A high degree of foot traffic
  • The handling or transportation of hazardous materials
  • The personal injury claims that could be leveled against construction, manufacturing, or similar businesses

Why Do Many Manufacturers Opt for Excess Liability Insurance?

Many manufacturers use excess liability insurance as a cost-effective way to increase the limits on their underlying coverage since they may face higher risks than other industries. 

These policies boost coverage on general liability insurance and can help to ensure protection in the event of a claim.

How Much Excess Liability Do Manufacturers Need?

When determining how much additional coverage manufacturers need, professionals may consider several factors. These factors can include:

  • whether a firm has experience with prior large losses
  • what is typical for their industry 
  • whether anything has changed in their business that might affect their risk exposure

​​As an industry, manufacturers tend to buy higher excess casualty limits than other industries. Each business has different needs and there is no one-size-fits-all answer to how much coverage a business needs. 

However, working with a broker and considering these factors can help you make an informed decision about your coverage to ensure you and your business are protected. 

Other Important Policies for Manufacturers

While general liability insurance covers many common risks, it does not provide complete protection. For example, manufacturers should also consider: 

General Liability Insurance

General liability insurance can help to protect a manufacturing company’s income and assets against everyday risks.

For example, general liability insurance can help cover:

  • Medical payments if another person or party is injured on your commercial property.*
  • Property damage if your business or employees cause damage to another person’s property.
  • Advertising injuries if your business is sued for copyright infringement in your advertisement.
  • Bodily injury claims if someone is injured at the site of business.
  • Reputational harm if you face a lawsuit for libel, malicious prosecution, slander, privacy, or wrongful eviction.

Workers’ Compensation Insurance

Workers’ compensation is built on an exchange between employers and employees. In the case of a work-related injury or illness, employees are entitled to effective medical treatment coverage while in return, employers are protected from legal action resulting from those injuries.

A workers’ compensation insurance policy provides:

  • Coverage for the costs of medical treatment, and
  • Lost time or indemnity benefits

Business Owner’s Policy

A BOP bundles general liability insurance with commercial property insurance. This bundle is often at a lower rate than if the policies were purchased separately.

Commercial Umbrella Insurance

Similar to excess liability insurance, this policy boosts coverage on a manufacturer’s general liability, employer’s liability, or commercial auto insurance policy once the limit is reached.

Any Questions?

Apex brings the high-touch service proposition back to San Diego businesses and beyond.

At Apex Risk & Insurance Services, we want you to know and understand your options. We prioritize transparency and provide custom solutions to meet your insurance needs. Then, read on to learn more about the difference between professional liability insurance and errors and omissions (E&O) insurance.

Why Commercial Property Insurance Premiums are on the Rise

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If you’re a real estate investor or owner, you may have noticed a significant increase in insurance costs compared to previous years. In fact, Quarter 3 of 2022 marked the 20th consecutive quarter of increased commercial property insurance premiums, according to the Council of Insurance Agents and Brokers (CIAB).

The average premium increase across all account sizes was 8.1% in Q3 2022, up from 7.1% in the second quarter.

In this article, we will discuss why these premiums are increasing and how commercial property owners can prepare. Let’s get started.

Why Are Commercial Property Insurance Premiums Rising?

According to CIAB, commercial property saw premiums rise an average 11.2% in Q3 compared to 8.3% in Q2. This increase was driven by inflation and a rise in natural catastrophes. 

Let’s discuss.

How Inflation Affects Commercial Property Insurance

95% of insurance brokers agreed inflation was influencing market trends in the third quarter, especially in commercial property. Why? Inflation increased factors such as construction costs. These factors lead to increased property valuations.

How a Rise in Natural Catastrophes Affect Commercial Property Insurance

More than half of respondents reported an increase in commercial property claims in Q3, possibly driven by catastrophes. Floods were up in Q3, with 31% of respondents reporting an increase. 

What Commercial Property Owners Need to Know and How to Prepare

Inflation and Valuation Concerns

Rising inflation rates in the United States may leave many property owners underinsured or without adequate coverage. 

During standard periods of inflation, the rate of inflation increases approximately between 2% and 3% per year. However, the U.S. is currently experiencing an overall higher rate of inflation, especially in industries such as construction. 

In fact, construction material costs are up 20% according to the General Contractors of America. 

Inflation drives the prices of goods and services up, such as the cost of:

  • Goods/Materials
  • Production
  • Labor
  • Resourcing

Additionally, supply disruption, and construction labor shortages, may also result in an increase in these prices. Real estate owners should be aware of these increases and how they affect the value of their property.

Commercial Property Owners Should Insure Property for the Accurate Value

Inflation may cause insurance premiums to increase. As a result, this increase may cause commercial property owners to be hesitant to invest in the right policy and instead opt for minimal coverage. However, many companies recommend that building owners insure their property  for at least 100% of their accurate value, if not more. 

Commercial property owners should be adjusting their policy to compensate for how much their home and renovations are worth. With inflation generating increased real estate values, unfortunately, property owners have more to lose.

Standard Commercial Insurance Coverage vs. Additional Policies

Insurers may require coverage for some natural disasters – such as flooding, earthquakes, and volcanic eruptions –  to be separate policies.  If your business is located in an area prone to these events, be sure to note if they are covered in your commercial insurance plan or if you need to purchase a separate policy. 

For more information about natural disasters and commercial insurance, check out our blog, here.

What Owners Should Do Now

Owners should become familiar with their current policies prior to or early in the financing process to avoid any surprises. With rates rising in the current inflationary environment, it’s important to make sure one has the right relationships in place. These relationships can help real estate owners and investors find innovative solutions to help reduce the cost of their insurance while ensuring they maintain adequate coverage.

According to Forbes, “Insurance specialists can look through one’s policies to see if there is any extraneous coverage and provide active risk management to implement different loss control strategies to potentially limit the severity or reduce the impact of a claim.”

Any Questions?

For more information, contact us today or check out our policies. 

Apex Risk is dedicated to providing clear explanations and guidance that addresses real problems that may arise for your business in your unique industry. Learn who we are and why we do what we do, here.

Does Commercial General Liability Insurance Cover Theft?

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Commercial general liability insurance is an essential part of any insurance plan. Why? General liability insurance is crucial in protecting your business.

If someone claims that your business caused them harm or loss and they take legal action against you, that action can cost your business plenty in defense costs and payments for damages.

First, What is Commercial General Liability Insurance?

Commercial general liability insurance, or business liability insurance, protects a business from just that: general claims. These general claims can include bodily injuries or property damage. 

What Does General Liability Insurance Cover?

Commercial liability insurance, can help cover:

  • Medical payments if another person or party is injured on your commercial property.*
  • Property damage if your business or employees cause damage to another person’s property.
  • Advertising injuries if your business is sued for copyright infringement in your advertisement.
  • Bodily injury claims if someone is injured at the site of business.
  • Reputational harm if you face a lawsuit for libel, malicious prosecution, slander, privacy, or wrongful eviction.

These risks can come up during normal business operations. For example, the average cost of a slip and fall claim is $20,000.Without general liability insurance coverage, a business would have to pay these costs out of pocket.

*General liability insurance doesn’t cover employee injuries. Business owners can use worker’s compensation insurance to help cover work-related injuries or illnesses.

What Does Commercial General Liability Insurance Not Cover?

Typically, business liability insurance does not cover:

  • Employee’s work-related injuries or illnesses. To help cover employees’ medical bills or other costs, small business owners (SBOs) can use workers’ compensation insurance.
  • Employment-related claims such as discrimination, sexual harassment, or wrongful termination. These kinds of claims can be covered under employment practices liability insurance (EPLI).
  • Errors in professional services that your company provides to customers. For this, SBOs will need professional liability insurance.

Does Commercial General Liability Insurance Cover Theft?

General liability insurance won’t cover your business equipment or property against theft or damage. You need a commercial property insurance policy to cover these issues. However, it may be possible to bundle a commercial property policy with your business liability for a discount. 

How Does General Liability Insurance Work?

To protect your business, general liability insurance policies must typically be in place when the incident occurs.

However, business liability policies can provide retroactive coverage after you stop paying premiums. This extended coverage can often be purchased for an additional cost when you select your policy.

What Businesses Need General Liability Insurance?

Business owners can benefit from the coverage of general liability insurance in many situations. For instance:

  • Your business is open to the public or clients or vendors.
  • You advertise or create marketing materials for your business.
  • You use social media personally or professionally.
  • You use third-party locations for business activities.
  • You need insurance coverage in order to be considered for work contracts.
  • You have temporary employees.

In particular, small business owners should consider investing in general liability insurance because it protects against common risks that can come up during normal operations.

These risks can be as simple as a customer walking onto property, slipping on a wet floor, and breaking their ankle. General liability insurance can help cover medical expenses for this individual.

What Determines My Insurance Cost?

The cost of your general liability insurance may depend on several factors including:

  • Type of business
  • Unique coverage needs, customized to your particular operations
  • History of insurance claims
  • The size of your business
  • Location

Certain industries and jobs that are more dangerous or have a higher risk of lawsuits may have higher premiums. Larger companies or those with a history of multiple General Liability claims may pay more.

Is Commercial General Liability Insurance Required by Law?

Business liability insurance is not required by law. However, if a business owner fails to purchase coverage, they are leaving their business vulnerable to a variety of risks. Let’s take a look at some examples.

The Risks of Not Having General Liability Insurance

Not having general liability insurance puts your business at financial risk. Facing judgments, legal settlements and lawyer fees without the aid of business general liability insurance can be very expensive and even bankrupt a business. 

How Do I Purchase General Liability Insurance in San Diego?

Apex brings the high-touch service proposition back to San Diego businesses and beyond.

At Apex Risk & Insurance Services, we want you to know and understand your options. We prioritize transparency and provide custom solutions to meet your insurance needs.

Then, read on to learn more about the difference between professional liability insurance and errors and omissions (E&O) insurance.

Renewals: How to Find Savings and Missing Coverage

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 If your business has changed over the past year, you run the risk of potentially overpaying for coverage or leaving your business underinsured.

During the business insurance renewal process, business owners have the opportunity to work with their insurance agents to determine if their insurance policies are still providing the coverage they need at the best available price. 

Watch the video below as Peter Katkov, the founder of Apex Risk and Insurance Services, explains the Apex Proven Process: a method of analyzing your business to determine exactly what your insurance is (and isn’t) protecting. We want you to understand your insurance and use it as a tool. 

Read on to learn more about the commercial insurance renewal process and how you can save while still finding the coverage you need.

What is an Insurance Renewal Process?

Insurance renewals occur at the end of the term of your policy. At this point, you can determine if you would like to renew the same policy with the same insurance carrier or if you would prefer to adjust your policy and/or carrier or negotiate terms.

What Insurance Exclusions Should I Look Out For During the Insurance Renewal Process?

Exclusions limit coverage. The three major types of Exclusions are:

  • Excluded perils or causes of loss
  • Excluded losses
  • Excluded property

Let’s take a look at some of the most common exclusions for commercial insurance.

Common Exclusions in General Liability Insurance

The following exclusions are common in most General Commercial Liability insurance policies.

  • Expected or Intended Damage
  • Contractual Liability
  • Liquor Liability
  • Workers’ Compensation
  • Employer’s Liability
  • Pollution
  • Aircraft, Auto, and Watercraft
  • Mobile Equipment
  • Damage to Your Product
  • Damage to Your Work
  • Damage to Impaired Property or Property Not Physically Injured
  • Recall of Products, Work, or Impaired Property
  • Personal and Advertising Injury
  • Electronic Data
  • Distribution of Material in Violation of Statutes
  • Damage to Property

How To Save Money During Your Commercial Insurance Renewal

Compare Your Coverage and Risks

The commercial insurance renewal process provides an opportunity to review your policy and determine where you could use more coverage and where you have coverage that you don’t necessarily need. 

You can scan your policy for savings by ensuring that you’re not ensuring yourself for risks you don’t face. 

For instance, if you don’t have employees, you don’t need employment practices liability coverage.

Ask About Loss-prevention Programs

Speak with your insurance provider about ways to reduce risk in your business. For example, this can include taking measures to prevent a cybersecurity attack, implementing a workplace safety program or instituting disaster preparations. These practices can reduce the risk of a claim and therefore, may result in a price break.

Be Proactive

Being proactive is another great method of saving money on business insurance. This means business owners taking measures to prevent accidents and reduce insurance costs.

Check out our Comprehensive Commercial Insurance Renewal Checklist, here.

How to Know If You’re Missing Coverage When Renewing Your Commercial Insurance

To properly prepare for your insurance renewal, ask yourself the following questions:

  • Has your business moved to a new location?
  • Has your number of employees changed? 
  • Are you offering any new goods or services?
  • Does your business have cyber security coverage?
  • Have you purchased new equipment?
  • Have you purchased new vehicles?

The answers to these questions can reveal if you have any gaps in your coverage. 

How Do We Save Our Clients Money and Find Missing Coverage? Let Us Introduce You to the Apex Proven Process 

At Apex Risk & Insurance Services, we use the Apex Proven Process to learn about your business, strategize to assemble the right program for you, and use our deep industry and market knowledge to leverage the best pricing and coverage. 

This leaves small business owners with more time to do what they do best: Run their business knowing that their company and employees are protected.

We take the time to understand the full operations of your business. We use this information to do a deep dive into the insurance program, asking questions including:

  • What coverage do you have?
  • What are the limits?
  • How much does it cost?

We utilize these comparisons to find where improvements can be made in your program.

First, We Analyze

We conduct an analysis of your business operations and your risk exposure. We then compare these figures to the current insurance policy you have in place. 

Then, We Report

We produce a report that summarizes the difference between your existing coverage and existing operations. This allows us to design a path to fix any issues and fill in any gaps in coverage.

We Take on the Heavy Lifting

We understand that switching insurance plans is a big commitment. That’s why we do our analysis and research, and build a plan before doing the work for our client on the backend.

Learn more about the Apex Proven Process and why we do what we do, here. 

Where Can I Find Commercial General Liability Insurance in San Diego?

Apex was founded to fill the service and consultative gap left by agency consolidations in the insurance marketplace. These consolidations have left customers who are used to a boutique service approach with no personal connection to their team.

Apex brings the high-touch service proposition back to San Diego businesses and beyond.

Check out our commercial insurance policies, then, read on to learn what makes us different.

Let’s Talk National Disaster Coverage: Are You Covered for Named Storms? 

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In the last few years, we’ve seen a spike in the number of natural disasters, such as earthquakes, storms, and hurricanes. With hurricane season just barely coming to a close while Hurricane Ian swept through communities and caused tremendous damage, many business owners may be wondering: what happens if an event like this hits my business? What am I covered for? What will happen next?

In this article, we’ll discuss the different types of catastrophic storm coverage, how a named storm can impact your insurance policy, and what you can ask your broker about to ensure you’re covered. Let’s get started.

Types of Natural Disasters and Commercial Insurance Coverage

Coverage can vary depending on both the type of natural disaster and the area in which the business is located. 

Tornados

According to the National Oceanic and Atmospheric Administration, more than a thousand tornadoes hit the United States each year. 

Similar to hurricane coverage, commercial insurance typically covers wind damage and can reimburse owners for damage caused by rain and hail. 

Floods

Owners tend to underestimate the risk of floods, but 90% of natural disasters include some form of flooding and, as we’ve discussed, most insurance companies require flooding to be a separate policy. We highly recommend considering investing in a separate flood policy to protect your business. 

Earthquakes

Earthquake coverage is also sold as a separate policy from commercial insurance but can help protect businesses against a variety of earthquake-induced effects, such as collapsed gas lines, crumbling or cracking walls, as well as damage to the interior and exterior of buildings. Insurers vary in the type of coverage they provide for earthquakes, so owners should clarify what exact damage is protected in their policy. 

To learn more about coverage for events such as wildfires and volcanoes, check out our Guide to Natural Disasters and Commercial Insurance. 

Hurricanes

Most standard commercial insurance policies cover losses resulting from wind, such as a roof being damaged or torn off, broken windows, and exterior damage. Additionally, policies should cover water damage resulting from rain leaking into the building. 

However, flood insurance is a separate policy. If a business is located in an area vulnerable to floods, owners will need to invest in flood insurance to protect their business against losses. 

Let’s discuss how a named storm or hurricane can affect your insurance policy. 

Named Storm or a Hurricane: How Does It Affect Your Insurance Policy?

Some insurance policies have a special deductible – the amount the policyholder owes before the insurance company starts paying its share of the loss –  for losses caused by named storms. These are called catastrophic event property deductibles or “CAT” deductibles.  What does this mean for policyholders? Let’s discuss.

What Are Catastrophic Event Property (CAT) Deductibles?

CAT deductibles are a significantly higher out-of-pocket expense to the policyholder and apply to specific events -such as named storms, hurricanes, floods and earthquakes – rather than to all perils. 

How Do CAT Deductibles Work?

The three most popular forms of CAT deductibles are:

  •  A high fixed dollar amount deductible
  • A percentage deductible
  • A deductible expressed in terms of National Flood Insurance Program (“NFIP”) limits

High Fixed Dollar Amount Deductible

A catastrophic event property deductible may be a fixed dollar amount. This amount will apply to a particular property, location or, more commonly, per occurrence. 

Review your policy and consider enlisting the help of your broker to determine if the deductible is per event, per season, or per calendar year. Why? If multiple named storms damage your property within the same coverage period – a calendar year, for instance – you may have to pay the deductible more than once. 

Percentage Deductible

These percentages can range from one to 10% of the value of the property. Let’s take a look at an example:

If a homeowners policy has a 5% named storm deductible on a $500,000 house, the policyholder would be responsible for paying $25,000 out of pocket.

Deductible in terms of National Flood Insurance Program (“NFIP”) Limits

A flood deductible may be expressed in terms of NFIP limits.  For example:

  • “equal to the maximum NFIP limits available per building and its contents whether purchased or not.” OR
  • “equal to the amount recovered under an NFIP policy.”

What is the National Flood Insurance Program?

Floods can happen anywhere and to anyone. It is important for business owners to protect their most important assets from a flood. These assets likely include, for example, their property, their business, and their possessions.

However, as we’ve discussed, flood insurance is a separate policy. This policy can cover buildings, the content in the buildings or both. 

The National Flood Insurance Program (NFIP) is managed by FEMA and is delivered to the public by a network of more than 50 insurance companies and the NFIP Direct.

The NFIP provides flood insurance to “property owners, renters and businesses, and having this coverage helps them recover faster when floodwaters recede. The NFIP works with communities required to adopt and enforce floodplain management regulations that help mitigate flooding effects.”

Contact your insurance company or agent to purchase flood insurance.

Ready to Find the Right Insurance for Your Business? 

At Apex Commercial Insurance Services, we focus on giving small to mid-market businesses the attention they deserve. 

For more information, contact us today or check out our policies. Apex Risk is dedicated to providing clear explanations and guidance that addresses real problems that may arise for your business in your unique industry. Learn who we are and why we do what we do, here.

January 1st Rate Filings Update: Why Insurance Rates Are Increasing 

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Insurance rates are rising; from workers’ compensation to global property insurance to cyber security insurance, insureds can’t help but notice a spike in prices.

Why are insurance rates increasing?  Several factors have contributed to this rise, ranging from inflation, ongoing supply chain disruptions and the labor shortage. Let’s dive into why. 

Why Are Insurance Rates Increasing?

Many factors contribute to the rise in insurance rates. These factors include, according to analysts at Fitch Ratings Inc.

  • High inflation
  • Supply chain disruptions and the labor shortage
  • A rise in natural catastrophe claims
  • An increase in D&O claims
  • A spike in cyberattacks
  • A rise in workers’ compensation claims

These issues have put the sector’s earnings under pressure and led to price increases for 17 consecutive quarters. Let’s take a closer look.

How Inflation is Affecting Insurance Rates

During standard periods of inflation, the rate of inflation increases approximately between 2% and 3% per year. However, the U.S. is currently experiencing an overall higher rate of inflation, especially in industries such as construction. 

In fact, construction material costs are up 20% according to the General Contractors of America. 

Inflation drives the prices of goods and services up, such as the cost of:

  • Goods/Materials
  • Production
  • Labor
  • Resourcing

When these services cost more, so does the cost of repairing or replacing properties, assets and so on. This leads to a rise in insurance rates to cover the increasing cost of repairs and replacements.

Effects of COVID-19: Supply Chain Issues and Labor Shortages 

According to the Global Insurance Market Index, global commercial insurance prices increased 9% in the second quarter of 2022 – down from an 11% increase in the first quarter – continuing a trend of moderating rate increases that began in Q1 2021.

Supply disruption and construction labor shortages, may also result in an increase in these prices. Why? These issues and labor shortages can cause goods and services to be more expensive and make the cost to repair or replace them higher as well. 

A Rise in Natural Catastrophe Claims Means a Rise in Natural Disaster Insurance Premiums

In 2020 and 2021, U.S. insurers paid $176 billion for natural catastrophe insurance claims alone, the highest total in a two-year period for commercial insurance claims relating to natural disasters. In 2021, 20 separate billion-dollar weather-related events occurred in the United States.

Many insurance companies are raising their rates to make up for the high number of big pay-outs resulting from natural disaster claims.

Increased Directors & Officers (D&O) Insurance Claims

The Directors’ & Officers’ (D&O) liability insurance market experienced huge rate increases in 2020; with some of these increases peaking at over 70%.

According to FitchRatings, possible reasons for spikes in D&O insurance premiums include increased mergers, class action lawsuits, and the cost of regulatory investigations.

Learn more about why Directors’ & Officers’ (D&O) liability insurance rates are rising, here. 

Spikes in Cyberattacks Trigger a Rise in Cyber Security Insurance Premiums

Cyber insurance, also called cyber security or cyber liability insurance, covers businesses against losses resulting from data breaches.

Since 2020, cyber-attacks have changed significantly and become even more common with the increase of remote and hybrid work models. These attacks can be much more nuanced than in the past.  For example:

  • Phishing emails have fewer red flags and instead include a subtle change. For instance, an email from one of your vendors may have a different bank account to pay your bill. 
  • Ransomware attacks are on the rise due to innovations in technology.
  • Ransomware attacks have also moved onto a larger scale, such as the attack against Microsoft Windows Remote Desktop Protocol (RDP) credentials to gain access to victim networks.

In its 2021 report, the U.S. Government Accountability Office found that a number of insurers reduced coverage limits or increased premiums for higher-risk industries. These industries may include:

  • Academic institutions 
  • Health care 
  • Public sectors

Learn everything you need to know about changes in cyber insurance, here.

Worker’s Compensation Insurance

Employers in California are required to purchase workers’ compensation to protect against work-related injuries and illnesses.

The cost of workers’ comp, however, has been steadily rising for the past few years, and with the most recent Pure Premium Rate Filing from the Workers’ Compensation Insurance Rating Bureau of California® (WCIRB), there’s no sign of slowing.

But why are these rates rising in the first place?

Changes in the workforce, medical inflation, and wage inflation have all played a part. Read on to learn what rising workers’ compensation rates mean for California employers.

In July of 2022, the WCIRB submitted its September 1, 2022, Pure Premium Rate Filing to the California Department of Insurance (CDI).

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

According to the WCIRB, the average of the proposed September 1, 2022, advisory pure premium rates is $1.56 per $100 of payroll.

Read more about why workers’ comp rates are rising, here. 

Any Questions?

For more information, contact us today or check out our policies. 

Apex Risk is dedicated to providing clear explanations and guidance that addresses real problems that may arise for your business in your unique industry. Learn who we are and why we do what we do, here.