Wednesday, December 31, 2014

Travel and Holiday Safety Insurance: Why is it required?

The globalized economy has shrunk the world with its connectivity both virtually and physically. Where once upon a time it was a luxury to fly from country to country, today for most people, who are frequent travelers, flying or travelling is an everyday matter. People travel for business reasons, to vacation with their families, for purposes of treatments or to visit their kith and kin.

However, Traveling per se is not always a wonderful experience. There are innumerable perils that a business or leisure traveler goes through depending on the destination, duration, and other factors. Consequently, it is always wise to have a travel insurance policy for the duration of travel / stay at a foreign destination.

So what exactly does a Travel Insurance cover? While one can procure customized travel insurance policies to cover a wide variety of risks, most travel insurance providers cover an optimum number of common risks such as: 
  • Medical emergencies like accidents, sickness and surgical procedures
  • Sudden or emergency evacuation from troubled areas
  • Cancellations and interruptions to a trip’s schedule
  • Accidental death, accidental injury or accidental disability benefit
  • Expenses for an overseas funeral or transportation of corpse to the home location
  • Lost, stolen or damaged baggage
  • Lost, stolen or damaged official/personal travel documents
  • Emergency replacement of essential items in cases of delayed baggage
  • Missed flight(s) due to sudden scheduling/rescheduling by airlines
  • Travel delays due to weather conditions
  • Hijacking, Kidnapping, acts of crime or terrorism
General Exclusions
Most travel insurance providers do not cover:
  • Pre-existing medical conditions such as asthma, diabetes, heart, liver or lung diseases
  • Visiting destinations that are affected by war or terrorism
  • Visiting destinations that are prone to natural disasters like floods, hurricanes etc, at the time of travel
  • Ailments, injuries, illness and hassles with local law enforcement agencies for substance abuse
So what does a traveler do in the above situations? That is where the facility of optional coverage comes into the picture.
Optional coverage
One could go in for one or more additional items at an extra premium. These are:
  • Pre-existing ailments such as asthma, diabetes, heart, liver or lung diseases
  • Sports and adventure activities that are risky such as skiing, scuba diving, parasailing, rock-climbing, mountaineering, motorbike racing or driving, etc
  • Travel to high risk countries that are affected by war, civil war, natural disasters like volcanoes, and terrorism hotspots
  • Additional AD&D (accidental death and dismemberment) coverage
  • Insolvency of third-party agencies like airlines, hotels, tour operators etc
  • Acute onset of pre-existing conditions: In addition to covering pre-existing ailments, one could also cover the unexpected onset of these conditions, despite taking medication and despite being given clearance by a doctor before the travel
Managing Risk
While the travel insurance policy acts as a safety net, it is advisable for all travelers to manage some of the risks associated with travel, so as to minimize claims and damages. Some of the aspects that can be taken care of are:
  • Road Safety: Taking care while driving or using a vehicle, in the place to be visited
  • Crime: Avoiding any situation that can invite crime or criminal attention on oneself
  • Illness and Injury: Taking care of one’s health and preventing any situations that can cause injury
  • Discrimination and Disability Access: Being aware of the local culture and possible causes of discrimination on various grounds

As a full-service insurance brokerage firm, Allied Brokers understands the risks that travelers face while embarking on a journey. Which is why, we provide travel and holiday safety insurance plans with several levels of gradation to factor various requirements of our customers. 

Sunday, December 28, 2014

Business Income Insurance: Why is it required?

Businesses suffer losses or interruption due to losses whether man-made or natural. Previously, business owners got themselves insured against the loss or destruction of tangible assets like machinery, equipment, buildings, vehicles, raw material and finished products. A change has since occurred. In the past couple of decades, Insurance companies have begun offering a more important coverage for loss - loss of income affecting revenue or profit during short or long periods of interruption to the business. This new category of insurance is called Business Income Insurance or Business Interruption Insurance (BII).

So what does BII cover? How does it help small, medium and large businesses recover the loss of income due to business interruption?

Factors to consider
  • The duration of Interruption: Depending on the nature of the business, you could consider either the time taken for the business to resume production or operations (as in small scale manufacturing), or the actual time taken for the business to reach the same state that it was in before the interruption happened. This includes loss of reputation and brand value.
  • Sales Projections: Here again, depending on the nature of the business, Sales Revenue can be calculated by projecting the sales revenues achieved in the previous years over the time of interruption. However, if you have introduced new measures and innovations in the recent past, and if it has had a positive impact on sales revenue, then these too must be considered.
  • Deducting the value of Goods: Loss of profit calculations is generally very simple to arrive at. Normally, the value of goods is deducted from the sales revenue to establish net profit. However, if the business owners have changed the profit percentage in the recent past due to changing business conditions, then the correct figure must be factored in the insurance cover.
  • Discontinuing Expenses: Ordinarily, when a business is interrupted, some expenses get discontinued for the duration of interruption. Such expenses will be deducted from the cover. However, if any other additional expenses that may have occurred due to other reasons, then these must be considered and added to the cover.
  • Depreciation: The usual process that is followed is to use the business’ income tax returns or IRS filed to calculate depreciation on fixed or mobile assets,and include it in the cover. However, you should also be cognizant of whether the real depreciation of the asset would take longer to recover any lost asset or assets, than what is shown in the IRS, and therefore, arrive at a more realistic figure.
  • Overtime done by Executives: The claim should also factor the time spent by executives in restoring the business to its original condition. This includes both time spent in strategizing for operating the business in a disruptive situation, as well as execution. This can be costly in the case of senior management executives and must be added to the claim amount.
Other options and endorsements

In addition to the minimum or base cover, there are a few other options to cover losses in other conditions that may be relevant to the business. Some of them are:
  • Expediting and Extra Expenses
  • Dependent property
  • Utility services
  • Civil authority
  • Contingent Business Income insurance
  • Service interruption
  • Leader property
  • Interruption by civil or military authority coverage

Allied Brokers is a full-service insurance brokerage firm and has been providing insurance cover throughout California in various categories, since 1954. We work closely with business owners to understand the real extent and nature of losses during a business interruption and adequately cover the same. We will guide you through various covenants, state laws, options and endorsements, while creating a comprehensive cover for you. This will help you tide over the interruption and cover all damages, thereby helping you restore normal business conditions at the earliest.