For Sale By Owner Business? – (How to Protect your Investment)
Protection of your business investment is key to your current and future success.
Before you buy a “For Sale By Owner Business“, or place your business on the market, make sure
that your investment is properly insured, and policy language comprehended.
Policy definitions and training information will be provided in this article piece as
a quick guide to your business security. This is an important consideration
as business owners, since business growth in absence of security and protection,
is not true business wealth!
Without further ado, lets dive into the policy language of underwriting, where
guidelines and the process of business loss, will be covered.
Business Owner Policy Language – E&O Policy Coverage
Currently, there are no standard errors and omission policy forms,
that are regulated throughout the United States based on statue.
This is because, these type of insurance policies, do vary
in their foundation and policy structure:
Meaning:
- Policy procedures
- Policy exclusions
- And policy coverage options
Business Owners Claims Process – (Similar Policy Elements?)
Even though difference is made apparent, there are policy
elements that are similar in nature.
These policy similarities are however, based on the common
element that effects all errors and omission policies.
This element of discussion is, the claims process.
The entire reason for the purchase of insurance in the first place.
However, no one wants to learn at the time of needing it,
that certain restrictions are applied,
and certain areas of coverage are no longer valid.
This would infuriate even the most patient, so, an overview
of the claims process is reviewed below for your convenience.
The Business Basics
Now, that we have moved based the basics of the insurance policy,
let’s examine how a claim is rendered.
These type of general insurance policies, are written on a claim made basis.
This is opposed to the occurrence made basis option.
There is a reporting procedure for reporting claims however.
Acts reported during the policy will have retroactive coverage.
There exist in most policies and contracts, an insuring clause.
This clause is responsible for the terms, and conditions of the
insurance company or carrier, who is responsible for providing coverage.
In addition, the errors and omission policy, is thought to cover
the insured against mistakes coming from the practice of a certain business profession.
You can hear the hesitation in the sentence above with providing information to coverage.
This is because of the changing laws and rules.
Rules and Laws – Insurance Regulations
There exist new laws, and court rulings that concern the very
existence of current policies and application.
This symbiotic relationship, exist to better improve
the current conditions, and reduce future exposure or business risk.
The existing laws are in constant change however.
In these evolving times with constant change in law,
so changes other areas of the insurance policy.
The Application and Court Rulings
The insurance application and policy interpretation of coverage is,
in question, and reason for ultimate change in the decision making
in the courtrooms or chambers.
Given that new rulings are changing the insurance landscape,
it is best to stay abreast of the constant changes occurring in
the court’s interpretation of the errors and omission polices.
These affects, ultimately change the relationship,
on a business and insuring level, of an insured and insurance company.
Occurrence Contracts
In the past, an errors and omission insurance policy could
be written on an occurrence basis.
Meaning, this type of claim could be made, only if it is made,
after the action date of the policy period.
Moreover, if the occurrence of the claim resulted from a claim
that occurred during the actual policy period, then the
insurance company would pay out the claim.
This claim would get paid even though the claim itself was made
after the policy period dates ended, this is huge, and should be noted.
Key Factor
There is an important role that must be performed for
coverage to take place, and go smoothly.
That is, the reporting period it takes from when a claim
or loss occurs, to the time it takes you to report it to your insurance company.
This is the key factor in the payment of your occurrence errors and
omission policy, so make sure to report it, immediately or as soon as it becomes known to you.
Replaced?
An occurrence errors and omission contract are no longer being written in today’s marketplace, 2018.
The reason being is, that it has been replace
by another type of claims made coverage.
This type of coverage is where you must report the claim
during the policy period for coverage to take place.
Full Prior Acts Insurance Coverage
Most of these policies, also include another coverage feature of interest,
coverage for actions that occurred prior to a policy period.
The insured must provide a truthful account of activities
in order make this claims transaction run smoothly.
This type of claim is also known in the insurance world as, “full prior acts coverage.”
Policy Differentiation
There is a difference that lies from policy to policy, however.
Some of these insurance policies, will only specify a retroactive
date and an area for excluded coverage for losses.
These losses, would be for activities that occurred prior to the date.
There are cases, where other policy types, may preclude certain dates,
or have other time limitations or restrictions.
With all these policy changes, in relationship to the legal arena,
how does the future of insurance underwriting look.
This segment of insurance series, will examine how technology
has shaped and advanced certain insurance applications, and policy procedures.
This development is responsible for the advancement of insurance,
in both the private sector, as well as the public.
These developments can be seen in the medical industry,
with huge data files supplying a national health care data base.
Insurance Streamlined?
This technological advancement is the reason for the streamlined
approach the health care industry is adopting.
It can be seen from the iPad your doctors now carry in the patient’s room
with you, from the advanced communication and reporting tools,
they and their staff use to communicate to outside facilities.
Some of these outside facilities, are now interconnected on an electronic and technological platform.
It encourages accurate reporting, and tracking of medication, as well,
as providing convenience for both the medical profession and public.
Now, you can have all your medications transferred electronically from
your physician’s office to the pharmacy of your choice.
Case Studies
In our case study reports of insurance and technology, this new phenomenon,
and can be witness through the provided case studies and analysis.
Each with a detail report, showing the cause and effect of technology on each of these industries.
A function approach will examine the case history of electronic data and internet technology,
since these were instrumental in the shaping of the future of underwriting.
Cost Analysis
The last section of the series, will dive into the cost analysis that is
associated with the onset of new technology.
By reviewing new technologies in certain industries, for example,
Hawsoft or Vertafore in the insurance arena for client management,
to the realtor world where listing software and analysis are utilized.
Each industry, will be broken down to examine how technology has streamlined,
and further strengthen the industry as the whole.
The opposite effect will also be examined,
for areas of improvement within the industry.
Advance Expert Systems
A solution cannot be provided until the problem is identified, and with new technology
entering the marketplace at lightning speed, the option of
choice becomes the overwhelming process.
Therefore, a selection of the most advanced and highly rated
within the industry are rated and analyzed.
This research compilation, will provide areas of
improving the relationship of the buy and the sell process,
and well as the back-end approach to insurance selling and buying.
The entire buy – sell chain has developed into a stream of progressions,
one which is the future of insurance jobs in the new marketplace of technology.
We already see the advanced expert systems of technology
replacing the outdated, and time-consuming ways of the past.
