[Fwd: WORK: Freelance Insurance Needs--long]
--- Begin Message --- Hi everyone.
A few days ago, I went to a meeting with a business insurance agent,
Steve. Steve talked about the insurance needs of independent writers. I
would think the information would be relevant to indepenent edtors,
also.
The first thing Steve said was that Texas insurance law is different
from insurance law in the other 49 states. There are many companies that
write policies in the other states, but that will not write policies in
Texas. There are also companies that work in Texas, but no where else.
SO be sure to check all this information with someone knowledgable about
the specific laws that apply in your jurisdiction.
The next thing he said was to find a good agent that you trust and
discuss your specific needs with the agent.
The information that follows is a summary of my notes. Remember, this is
TEXAS stuff, and of course I might have written something down wrong.
Consult your own experts before making any decisions.
Workers Compensation
If you have even one employee this is required by law. Premiums are
based on the type of work (how dangerous it is) and the dollar amount of
your payroll. A client may require you to carry your own workers comp to
protect themselves. If so, and it's just you, you should be able to get
coverage and a certificate of coverage for $250 to $500 per year.
Alternative Workers Compensation
Usually just an accident plan, does not provide the coverage of standard
workers comp. Not recommended.
Auto insurance
If the car is in your company name then you need commercial auto
insurance. Otherwise personal is the way to go since the same coverage
is much cheaper. Two notes--If you use the car for business and write it
off, be sure it is rated for business use (Class 3 or 3A) because that
will help if the IRS does an audit. If the car is not rated for business
use the IRS is likely to disallow the deduction. Second note. IF you
subcontract or have employees, or if you ever rent vehicles in your
company name, you need Hired Non Owned insurance. This is available as
part of commercial auto or as a standalone policy.
Commercial General Liability
A good thing to have. There are several pieces to it. The main thing is
that if you have coverage and someone sues you, the insurance company
will defend you.
Commercial General Liability, Premises
Coverage for accidents on your premises. If you office in your home and
a business visitor has an accident, your homeowners policy may not cover
it. $1000000 is good coverage
Commercial General Liability, Products
If your product causes an injury by accident (NOT Errors and Omissions)
Not too likely with our products ( a massive paper cut, requiring
transfusions of blood...no, not too likely.) Still, don't ignore it.
Commercial General Liability, Advertising
Covers Patent infringment
Commercial General Liability, Other
Fire legal liability, medical payments
Somewhere in here is the coverage for when you spill your coffee into
the client's expensiive computer equipment.
Commercial Property Insurance
Actual cash value vs replacement cost
Co insured--this means you have to have insurance coverage for at least
80% of the value or the insurance company will pay less than the value
(It's worth $100,000, you have it insured for $50,000 or 50%, it all
burns up. The insurance will pay you $25,000, 50% of the amount of
insurance you had. If you insured it for $80,000, they would pay you
$80,000. Yes it's confusing. The point is insure it for what it's
worth.)
All Risk-Just because it says all risk, don't think you are covered for
everything. That just means whatever risks are not excluded by the
policy.
Valuable Papers-Covers the costs to reproduce destroyed papers
Business Interuption Coverage--Covers the lost income if your business
is interupted due to property damage. This coverage is not available
stand alone--it's part of your property insurance.
Extra Expense coverage--Moving, new telephone service, etc. due to fire
or whatever
Homeowners insurance usually has very low limits on the value of
business equipment. It's hard to get commercial property insurance in a
house because the variables are too great for the commercial
companies--Is it brick, is it wood, what's the neighborhood like. They
have more experience dealing with office buildings.
Electronic Equipment
Part of Property, I think, but my notes aren't clear. In any case, it
covers equipment, the media, and both in transit.
Umbrella
Recommended for everyone. Adds extra coverage for any liability and if
something is neither covered nor excluded by one of your existing
policies, the umbrella policy will cover. Reasonably priced.
Professional Errors and Omissions
I know there's been talk that that term is only for printers, but that's
what he called it. It's for when you make a mistake and it causes
someone a problem. Remember, General Liability is for when there's an
accident of some sort. There is always a deductible.
The E&O liability could be because you missed an error and the client
has to do another print run. It could also be that you made some
egregious error of fact, and someone operating some piece of equipment
gets killed. Having the client sign off on your work will not help a lot
when the orphans sue you. The main thing once again is that the
insurance company will defend you.
Premiums start at $1000 per year. Generally an association can arrange
for a better price.
Health Insurance
Group is usually cheaper, but individual choices are getting better.
Life
Term is dirt cheap--get as much as you can afford. Whole life is not
worth the extra money.
Disability
The most important insurance for you to have. Be sure it says "owner's
occupation," not "any occupation." If not, the company can say you are
perfectly fit to sell pencils or whatever and deny your claim.
Dental
You really need at least 5 employees to get a full dental policy. DMOs
are a good alternative.
401K
You must be incorporated to do a 401k. If not, you can do an SEP. Best
bet for an individual or a small group (less than 20) is a stock broker
and mutual funds.
Julia Land
jalnd -at- earthlink -dot- net
--- End Message ---
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