Securing the proper insurance coverage for your business is important but also can be very expensive.  Study it closely and secure knowledgeable advisors to help you.  By Gary Shotton #000432

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Insurance

By Gary Shotton

Hello, My name is Gary Shotton, and I’m here as a part of Inspiring Better Business. One of the questions asked in our discussions with foreign groups was, what do I do about insurance, how can I afford insurance. And this is a big subject I mean this is a very sensitive subject to me especially in my first business, the trucking company with moving and storage and even now with my current business. Currently I have a business with about 50 employees and we get around $9 million a year in sales and  I have a really expensive insurance bill every year and it really hurts me to have to pay this insurance. Now my previous business was similar I had about 70 employees but we only were in about 3 million a year in total sales, it was a Moving and Storage good business, and I had even more insurance back then because I had trucks, when I had trucks that are driving on the highway and you can have one of the insurances was liability, covering the cost of some accident in case one of my workers made a mistake.

Let’s talk about the insurance. There are so many different kinds of insurance, I’ve got to kind of group them together. One of those is what I mentioned earlier a liability when I had trucks on the road or you have vehicles in your business of any sort and they’re driving down the highway and they make a mistake and they cause an accident. Then in our country It’s by law we were to have liability coverage to cover the rent the risk of that happening and take care of the person that got was injured or their vehicle. Now we have some minimums if you’re just driving your own personal  but when I have a company, I have to have fairly high limits which creates quite  an expense to me but it’s something that the  law requires a minimum ,but I would add extra to be sure that I’m protecting myself proportional to the risk and it’s always a judgment call. If you have a vehicle you might determine that you would need what’s called a comprehensive and collision So, the liability covers the other person.  Well if you’re driving an older car and you don’t have a lot of money tied up and it’s not required by law. In fact, when I was in those positions with inexpensive cars I didn’t actually have what would be comprehensive and collision insurance on my vehicles. When I have workers in our country were required to have what’s called workman’s compensation insurance there’s no option. If I’m in business and I don’t do that I’m actually breaking the law. That’s proportion to basically the risk of the worker and what classification they’re working in. And so I have to pay that. I have also insurance that I provide for a major part of the cost for the health coverage is almost expected for the kind of business I have and my workers. It’s almost impossible for them to obtain that coverage on their own. At this current point I pay about 70% of the cost of this health coverage, and the employee pays their portion if they want that. I have to offer it they in our case we require it but they have to choose what level of coverage they want and I’ll be honest at this point, my annual for one year is around $400,000 for all of the health coverage for all of my workers that choose that workers that coverage, and I pay almost $300,000 of that every year and that’s got to be part of my budget ,part of my money part of handling  the cost of doing business. If I want to have the case that either my house or my business should burn down or a tornado could come through and a hard wind could come through, then I have to insure my property including my equipment, I have property there and now there’s a premium for that. It just seems to go on and on and on. But the key for you is to know the law, know what laws are required, and know also then what kind of risk that you’re willing to take on those things that are not required by law.

In my early days, I had a family of small children and my wife and I needed to have a life insurance. I felt responsible that if something should happen to me that I wouldn’t want to leave them in a great problem and not have life insurance. Now as I’m getting older I’m debating to drop that because there’s not anyone depending upon me and I will start dropping and I do lower my insurances as the risk is diminished. In your case, you might be a young couple with three or four children. You might decide that  in I suggest that you provide some provision for your children and your family, just in case that you something happens to you they have life insurance and health coverage. Those are big things and you’ll have to be knowledgeable and do research in those areas. Determine where your money and how you balance that with those  income as you’re coming. these are we called expenses that are not in direct to creating your product or service. These are expenses that are called overhead, or our administrative or our indirect cost of doing business, and a lot of this comes back to knowing your numbers, knowing what is a fair amount  that you could pay to get in the category of insurance related to your business. I know I covered a lot of things I hope I didn’t confuse anyone. I’m sure I left out at least one or two insurances that I didn’t intend to forget. I had the problem when I was getting started of hitting what’s called the minimum I would need some basic insurance by law but then I was so small but they would slap on a minimum charge that I couldn’t even get the courage without paying for more than I needed. So, it’s part of the research part of the study part of being a business owner and I’m trying to help those that wouldn’t be growing to bigger than just a family owned business. if you’re a family owned business and you’re just getting start, you’re probably going to have to take some risk  and believe God. And I do believe God is my protector but I also know that I’m human and I can make mistakes and I should be responsible for the proper amount of insurance for my situation that’s what you’re going to have to do. I Hope I could be of help further. Thanks for being a part of Inspiring Better Business.