When you start a business, it is likely that you will be considered a high risk individual. Over time, insurance companies will consider your loss ratio and the details of your claims when they are determining the business insurance premiums that you will need to pay for your coverage.

What is a Loss Ratio?

Before you can understand how it impacts your premiums, you must recognize what the ratio is and how it is calculated. The ratio refers to the amount of money that the insurance company pays out to the business in claims when compared to the amount that the company is paid. For example, if you pay $100 per month and your total claims over the year add up to $600, then you would have a loss ratio of 50 percent for the full year. The company made $1200 from your premiums, but paid out $600 in claims, resulting in a profit of $600.

How it Impacts Your Premiums

The reason that the ratio impacts your premiums is the risk assessment. If you have a history of a higher-than-average ratio when compared to other businesses within the same industry, then you can expect to pay more to the company because of your claims.

Furthermore, you can expect to pay more when you have a high ratio over a particular year, even if you have a low ratio over the course of several years prior to the current time.

Ratios, statistics and average data help insurance companies identify the amount of risk that comes with protecting your business. Ideally, you want to have a low or reasonable ratio to get the best rates. Contact us to speak to an agent to learn more about your options and the policies that are appropriate for your business.

The Affordable Care Act was designed to give every American, access to health care coverage without worrying about being denied care because of pre-existing conditions, limits on coverage, or termination because you used your policy too much. There is still a lot of confusion about terminology, coverage specifics and what you can expect from your health insurance and how the payment system will work. As your independent agent, we’re here to clarify things for you, and to make sure you have a good understanding of how your coverage works.

When you see your doctor, the office files a claim with your insurance company. The insurance company pays a percentage of the cost of services you received. That percentage is subtracted from the amount the insurance company allows for that particular service. Whatever is left after your insurance company pays their part, which is typically 80 percent, is the coinsurance, or amount you have to pay out-of-pocket. If you have a deductible, the insurance company subtracts that amount from what they pay, so you’ll have to pay the deductible and the percentage.

In New York state, however, your insurance company can’t charge you a co-payment, or expect you to pay a deductible when you see your doctor for routine preventive care services. The insurance company will pay whatever percentage they allow, and for these services only, you won’t have to pay anything.

New York also has a cost-sharing program to help people whose income falls below a certain threshold. When you apply or applied for medical insurance through the state’s sign-up program, you can find out if you qualify for help from the state.

If you have Medicare, and you have a supplement to your Medicare policy, your supplement may cover what Medicare doesn’t pay. If your doctor bills Medicare directly and accepts direct payment from Medicare, then you can’t be charged a co-payment for what Medicare doesn’t cover. If you have Medicare and also have prescription drug coverage through Medicare, you are responsible for the amount that your drug insurance doesn’t pay for your medicine. The amount you pay is also called coinsurance, which is the same as a co-payment.

The coinsurance does not affect your health insurance when you go to the doctor for things that aren’t considered basic preventive care because you pay nothing for these visits.

Contact your independent agent in one of our Schenectady or Saratoga Springs, New York offices to compare prices on health insurance coverage for you, and your family.

Medical costs are a primary reason for bankruptcy in the United States, even if you hold health insurance. One way to protect yourself against unexpected medical costs is by setting up a health savings account alongside your health plan. Not all health plans are eligible for a health savings account, however.

Generally, the only plans that work with HSAs are high deductible plans, sometimes called catastrophic health insurance. These plans have deductibles over $5,000 and are intended to defray costs related to major hospitalization. The monthly premiums are quite low, making this an affordable option for the younger demographic who doesn’t have ongoing medical needs.

After purchasing a compatible plan, you set up a health savings account through a financial institution. You deposit money into this account as you would a typical savings account, but you do not pay tax on this income as long as it’s used for medical expenses. This tax advantaged account helps you save for your medical expenses, while not carrying around more of a health insurance plan than you need.

Sometimes your employer may offer a health savings account directly, saving you the need of setting up your own through a bank. While the employer may set it up for you, you own the account and have complete control over the money going in and out. It’s a good system for putting your medical money in a place you can easily get to it, without being tempted by it in your actual bank account.

Don’t get caught flat footed by medical bills that come out of nowhere. Contact your local independent agent in Albany, NY to get an eligible health insurance plan to pair up with a health savings account.

The difference between general and professional liability is definitely something that any business owner will need to be aware of. The majority of businesses in New York will need to retain both of these types of liability insurance coverage, but every situation is unique so you should discuss your individual needs with your insurance provider before making a decision about your liability insurance needs.

General liability coverage is necessary for any business. So much so, that virtually all United States businesses are required to hold this coverage by the laws specific to their state. General coverage is that which protects your business from lawsuits that might be filed when someone is hurt while on the business property. Another thing that general coverage typically encompasses is product liability. If your company produces an item or a service that is consumed or used by the public, there is potential for that item or service to cause damage, for which you would be held responsible. This coverage will also protect you from legal actions from product damage to consumers.

Professional liability is a more specific type of coverage that is geared towards contracts. As a business owner, you will have business obligations that are usually outlined in contracts. If your business fails to meet contractual obligations, and another party suffers some type of damage due to that, this coverage will protect you legally.

Every business has different needs. If you are a Saratoga Springs, Schenectady, or Albany NY business owner, you may feel that the minimum insurance will work well for you – however, a careful perusal of your liability coverage can really help. There is no reason to leave your business, and therefore your future, under-insured. Our agents can give you quotes anytime, free of charge. We want to help you grow your business while being fully protected by a great liability policy!