Top Risks for Small Construction Businesses

The construction industry is rife with entrepreneurs and small businesses. The allure of being your own boss, creating dream homes, and building beautiful architecture is undeniable. However, the industry itself poses several risks that can jeopardize an entire operation if not managed appropriately. Below are the most prevalent risks threatening construction businesses.

Seasonal Slowdowns

For the construction industry, there are only two seasons: winter and construction. Once the weather begins to turn, construction contracts slow to a trickle. This is because everything becomes harder and more hazardous in wintry conditions. Frozen soil is harder to penetrate, snow conceals dropped tools, and freezing winds make scaffolding work unpleasant and dangerous. Even for businesses in warmer climes, an economic downturn can result in a dearth of contracts. Construction companies have to prepare for the slow season by setting aside earnings from the busy season to help compensate for the decrease in income.

Workplace Injuries

Even with proper safety precautions, accidents can still occur on construction sites. While construction workers are the most likely to be injured, third parties can be as well (such as clients visiting work sites). When accidents happen, the injured party can hold the construction company liable for medical costs and court expenses. To help mitigate these issues, business owners should invest in Worker’s Compensation Insurance as well as General Liability Insurance. In fact, many states require it as a prerequisite to own and operate a construction company.

Damaged Equipment

Construction professionals cannot work without the right tools and equipment. While some tools are easy to replace, others take time and money. This can delay projects and harm a construction company’s reputation. Investing in Property Insurance can help alleviate the cost, but it is best to prevent damages in the first place. Business owners can ensure this by training workers on the proper use, maintenance, and storage of equipment.

Protecting Your Investment

Starting and operating a successful business is the ultimate goal for entrepreneurs. However, without proper risk management, a construction company can quickly fall into ruin. The Reilly Company can help your business manage construction risks with the proper insurance policies and coverages. To learn more, contact us today.

Life Insurance Death Benefits Offer Business and Fiscal Security

Investing in life insurance provides financial security and peace of mind. However, not many people realize how versatile life insurance policies truly are. Most individuals believe life insurance provides income to the bereaved parties as the loved one who passed on can no longer contribute financially. This is true; however, death benefits, the amount of money paid out when an individual files a life insurance claim, can do much more.

VIP Insurance for Businesses

When a high-ranking executive at a company dies, this can put the business in a difficult situation. For example, replacing CEOs, CIOs, and COOs can take time and cost a company a significant amount of money in the interim. This can put the future of the company in jeopardy, especially if the death was sudden. This is why some businesses invest in “key man” insurance policies on vital employees. This is especially helpful if a company has multiple partners. This type of life insurance policy can cover the taxes associated with transferring ownership of the company to the remaining partners.

Paying Estate Taxes

Large estates usually mean a high amount of taxes. When an estate transfers to heirs, this can create financial headaches. Many assets, such as property, are not easily liquidated. Even so, the IRS taxes them. Heirs may not have the funds to pay the taxes, which can force them to sell treasured heirlooms to cover the expense. It can also create infighting among family members. If one heir can afford the taxes but another cannot, a dispute over whether to sell the property or not is likely to arise. Death benefits can provide the necessary funds to pay the taxes.

The scope of life insurance has evolved over the years. People use life insurance to pay for their children’s education, as a means to optimize their taxes, and more. While the original purpose of life insurance was to provide financial security after the death of the insured, individuals cannot afford to ignore the possibilities death benefits offer. The Reilly Group can help you navigate the different types of life insurance policies available as well as determine which policy will provide the greatest benefits. Contact us today to learn more.

Homeowners Policies and Flood Coverage – Understanding What’s Protected

Whenever hurricanes threaten the coasts, homeowners begin to scour their insurance policies to see if they have coverage for water damage. While many believe their homeowner’s insurance will cover flood damage, this is an erroneous assumption. Homeowners need to invest in a separate policy to cover flood and water damage. While many homeowners associate flood damage with total loss, this is rarely the case. Most flood claims average around $40,000. Below are several other facts about flood insurance homeowners need to know.

All Homeowners Can Buy Flood Insurance

While homes in flood-prone areas are more likely to experience water damage, this does not mean homes farther inland are risk-free. Flooding can come from several sources, and homeowners should weigh the risks before foregoing flood insurance. Homeowners should also bear in mind that flood claims are one of the most common.

Some homeowners do not have a choice regarding flood insurance. The National Flood Insurance Program designates certain areas as hundred year flood zones. If an individual lives in one of these areas and has a federally backed mortgage, the program requires them to invest in flood insurance.

Homeowner’s Policy Coverage and Exclusions

Homeowner’s insurance policies are not devoid of water damage coverage. For example, if a hurricane blows out windowpanes or knocks a tree onto a home, a homeowner’s policy would cover that damage. Homeowner’s insurance covers any water damage related to the above examples as well. However, such policies rarely cover wind-driven rain damage under any other circumstances. Homeowner’s policies also exclude any damages as a result of water coming from the ground such as ocean waves.

Flood Insurance Coverage and Exclusions

Even if a homeowner invests in flood insurance, there are still some limitations. For example, flood policies take 30 days to go into effect. This means a homeowner cannot rush out to buy flood insurance when they learn of an impending storm. In addition, most policies peak at $350,000; this covers the home ($250,000) and personal belongings ($100,000). If a homeowner needs additional coverage, they will need supplemental policies.

Flood insurance comes with some hefty exclusions as well. Some examples include:

  • Below grade living spaces (i.e. basements)
  • Decks/patios
  • Pools/hot tubs
  • Wells/septic systems

If you live in a flood-prone area and want to learn more about flood insurance, The Reilly Company has you covered. Our insurance agents offer convenient insurance management options including phone consults, online comparison quotes, or an in-person visit. To learn more, contact us today.

What Every Business Needs to Know about Cybersecurity Insurance

In the aftermath of the Equifax data breach (see our earlier post here), many businesses are scrambling to find out more about their cybersecurity insurance. Do they have enough coverage? What happens in the event of a breach? Investing in appropriate coverage is smart, but it can only mitigate some of the financial risk associated with cyber attacks. For example, there is not much cybersecurity insurance can do about the hit to a company’s reputation after a breach or the associated loss of business. Below are several other facts about cybersecurity that businesses need to know.

Businesses Cannot Insure Against All Risks

Investing in cybersecurity insurance is one way companies can manage their risk. However, there are so many cyber threats that to insure against them all would be cost prohibitive. Instead, businesses should focus on the threats most likely to affect them. They should also take a top-down approach: identify what digital assets are most important and afford them the most protection. From there, businesses can measure the remaining threats and insure accordingly.

Cyber Insurance Has Its Limitations

Like many other types of insurance policies, cyber insurance has exclusions and limitations. As mentioned above, it is not suitable for dealing with damage dealt to a business’ reputation. It is also inadequate for covering the loss of intellectual property. Business owners need to familiarize themselves with their policy’s weaknesses and invest in supplemental insurance if necessary.

The Wording of Cyber Insurance Policies Matters

Some cybersecurity insurance policies include coverage that overlaps with other standard business insurance policies. Businesses need to dig into their policies to make sure they have the coverage they need for the cyber threats most likely to happen to them. Cyber insurance policies should do more than provide financial recompense. After a cyber attack, businesses will need a legal and PR response at the least.

However, sifting through dense insurance policies can be confusing and no business wants to leave itself exposed to cyber threats. The Reilly Company can help business owners identify their specific threats as well as which cyber insurance policy would benefit them most. To learn more about protecting your business from cyber threats, contact us today.