LEGAL
REQUIREMENTS
“The
business
of
America
is
business”
–Calvin
Coolidge
UNIT
IV
/
LESSON
10:
page
3
Handout
IV.10.A,
“What
Is
Insurance?”
Directions:
Underline
the
five
key
words
appearing
in
the
definition
below,
necessary
to
understanding
the
meaning
of
“insurance.”
• A financial service allowing individuals to pool their
exposure to risks of economic loss resulting from the
occurrence of uncontrollable events such as fire, death,
earthquakes, etc.
• Essentially, an individual pays a premium that buys
guarantees of compensation for economic loss due to
the occurrence of a predefined set of events.
• The premiums of the many are pooled and the losses of
the few are compensated from the pool.
Taken
from:
bestpracticesconferenceJohnWipf.ppt
LEGAL
REQUIREMENTS
“The
business
of
America
is
business”
–Calvin
Coolidge
UNIT
IV
/
LESSON
10:
page
4
Handout
IV.10.B,
“Types
of
Business
Insurance”
Directions:
Listed
below
are
the
most
common
types
of
business
insurance.
Assume
that
you
were
opening
your
first
business
and
could
afford
to
purchase
only
three
types
of
insurance
from
the
list
below.
Circle
the
three
types
you
would
purchase.
Business
insurance
is
a
broad
description
that
can
be
broken
down
into
a
list
of
nine
types
of
insurance
policies.
Those
nine
types
of
policies
will
be
briefly
explained
here.
Property
Insurance
Property
insurance
insures
against
loss
or
damage
to
the
location
of
the
business
and
its
contents.
It
can
also
insure
the
property
of
others
in
your
control
when
the
loss
occurs.
Property
insurance
can
be
for
a
specific
risk.
For
example,
a
fire
insurance
policy
insures
only
against
a
fire
loss
to
the
location.
A
tornado
is
not
a
fire
and,
therefore,
that
loss
would
not
be
covered.
The
insured
location
can
be
owned,
leased
or
rented.
Casualty
Insurance
Some
insurers
will
lump
property
and
casualty
insurance
together
and
refer
to
the
coverage
as
property
and
casualty
insurance.
In
fact,
packaged
policies
of
property
and
casualty
are
often
the
best
purchase
a
business
owner
can
make.
Casualty
insurance
insures
against
loss
or
damage
to
the
business.
Liability
Insurance
Liability
insurance
insures
against
liability
legally
imposed
upon
your
business
because
of
the
negligence
of
the
business
or
its
employees.
Put
another
way,
it
protects
your
business
when
the
business
is
sued
for
negligence.
Commercial
Auto
Your
personal
automobile
policy
does
NOT
cover
vehicles
used
by
your
business.
If
your
business
uses
vehicles
or
anything
that
is
required
to
be
titled
by
your
state,
then
you
need
a
commercial
auto
policy.
Commercial
auto
coverage
insures
against
property
damage
to
vehicles
and
damage
caused
to
others
by
those
vehicles.
Workers
Compensation
You
will
need
to
insure
your
employees
against
on‐the‐job
injuries.
Every
state
is
different.
But,
most
states
have
put
into
place
some
form
of
workers'
compensation
system.
Workers'
compensation
is
a
system
where
the
employee
is
not
allowed,
by
statute,
to
sue
their
employer
for
on‐the‐job
injuries;
but,
in
return,
the
employer
must
participate
in
a
system
that
provides
nearly
automatic
payment
to
the
employee
in
case
of
injury
for
medical
bills
and
damages.
There
are
many
options
for
workers'
compensation
coverage.
Some
states
allow
an
employer
to
opt‐out
of
the
system
if
the
employer
is
self
insured,
some
run
the
system
through
private
insurers
while
others
use
state
agencies.
Business
Interruption
Business
interruption
insurance
insures
against
loss
or
damage
to
the
cash
flow
and
profit
of
a
business
caused
by
the
business
being
unable
to
operate
because
of
interruption.
The
easiest
example
is
to
think
about
a
critical
piece
of
machinery
being
struck
by
lightning.
The
repairs
to
the
machine
may
be
covered
by
other
coverage
such
as
property
or
casualty
insurance.
But,
if
you
cannot
make
widgets
for
three
months,
than
there
is
no
replacement
of
that
income
without
this
coverage.
LEGAL
REQUIREMENTS
“The
business
of
America
is
business”
–Calvin
Coolidge
UNIT
IV
/
LESSON
10:
page
5
Health
Insurance
To
be
competitive,
most
businesses
need
to
offer
their
worker’s
health
insurance.
This
insurance
offers
a
health
coverage
benefit
to
your
employees
(and
you).
Life
and
Disability
Insurance
Life
and
disability
insurance
protects
the
business
against
the
death
or
disability
of
key
employees.
For
example,
one
partner
carries
a
life
insurance
policy
naming
the
partnership
as
a
beneficiary.
If
that
partner
dies,
and
the
business
has
planned
properly,
the
proceeds
of
the
policy
can
be
used
by
the
business
to
buy
out
the
share
of
the
decedent's
partnership
interest
from
the
estate.
Other
Insurance
or
Scripted
Policies
It
could
very
well
be
that
your
business
is
so
unique
to
have
need
for
coverage
that
is
a
mixture
of
some
of
the
coverage
listed
above
or
something
written
specifically
for
your
particular
risk.
One
can
think
of
some
actresses,
actors,
or
sports
stars
that
have
had
legs
insured
at
some
point
in
their
careers.
This
would
be
an
example
of
a
scripted
policy.
This
About.com
page
has
been
optimized
for
print.
To
view
this
page
in
its
original
form,
please
visit:
http://businessinsure.about.com/od/insuringyourbusiness/tp/listtypesins.htm
©2011
About.com,
Inc.,
a
part
of
The
New
York
Times
Company.
All
rights
reserved
LEGAL
REQUIREMENTS
“The
business
of
America
is
business”
–Calvin
Coolidge
UNIT
IV
/
LESSON
10:
page
6
Handout
IV.10.C,
“Social
Insurance”
Directions:
On
the
handout
below,
you
will
learn
about
social
insurance
and
five
different
examples
of
social
insurance
that
Americans
receive
today.
Life is filled with risks. Uncertainty is the rule because nobody can predict with confidence his or her
future state of wealth or health. Families once bore the primary responsibility for caring for their
individual members in bad times, but modern industrial society has scattered family members to
different jobs in different locations. Citizens have decided, through the political system, that we need
financial protection against some of life's difficulties that are hard to face as individuals. These include
old age, ill health, unemployment, disability that makes it impossible to work, injury on the job, and
the death of a family breadwinner. For all these conditions, we rely on help from social insurance
programs, which are financed by workers and employers.
Social Security
Medicare
Workers’ Compensation
& Disability
Pays benefits to retired and
disabled workers and their
families and to families of
deceased workers.
Pays for health care for
those over 65 and disabled
adults under age 65.
Pays for wage replacement and
medical care for those injured or
killed on the job.
Unemployment
Insurance
Provides partial wage
replacement for those who
have lost their jobs.
Long-Term Care
Provides assistance with daily living activities when you
need help. (Long-term care means assistance with things
that healthy, independent persons can do without help.
These are basic activities of daily living: eating, dressing,
using the toilet, bathing, getting out of bed, and crossing
the room to sit in a chair.)
LEGAL
REQUIREMENTS
“The
business
of
America
is
business”
–Calvin
Coolidge
UNIT
IV
/
LESSON
10:
page
7
Exercise:
There
some
debate
today
whether
or
not
the
government
should
continue
to
pay
for
all
of
some
of
the
five
examples
of
social
insurance
listed
above.
In
the
chart
below
indicate
whether
or
not
you
believe
the
government
should
continue
to
pay
for
the
social
insurance
listed.
Type of social insurance
1. Social Security
2. Medicare
3. Workers’ Compensation & Disability
4. Unemployment Insurance
5. Long-Term Care
Government
should pay
Government
should not pay
Not sure
LEGAL
REQUIREMENTS
“The
business
of
America
is
business”
–Calvin
Coolidge
UNIT
IV
/
LESSON
10:
page
8
Handout
IV.10.D,
“Keeping
Insurance
Costs
Down”
Directions:
Read
the
handout
below
and
complete
the
exercise
that
follows.
Here are some suggestions for lowering your insurance costs:
1.
Make
Sure
You
Have
Copies
of
All
Policies
and
Update
Your
Insurance
File
Start
your
review
by
looking
at
your
insurance
file.
If
you
don't
have
a
file,
now,
is
a
good
time
to
start
one.
Make
sure
that
you
have
copies
of
all
policies
in
your
file
and
readily
accessible
when
needed.
Make
sure
there
are
copies
of
claims
forms
for
each
policy
in
the
file.
You
will
want
to
create
a
separate
off‐site
location
for
a
copy
of
your
policies
and
forms
in
case
this
file
is
destroyed.
Organization
is
the
first
step
in
reducing
insurance
premiums.
2.
Compare
Your
Schedules
to
Autos
and
Equipment
Actually
Owned
A
good
place
to
start
with
your
premium
review
is
an
analysis
of
your
equipment
and
auto
schedules.
Does
your
business
still
own
the
vehicles
listed?
Changing
key
equipment
can
sometimes
result
in
premium
savings.
3.
Compare
Your
Named
Insured
and
Key
Employees
to
the
Employees
That
Work
For
You
Much
like
Step
#2,
this
step
involves
reviewing
named
drivers
and/or
key
employees
identified
on
policies
to
make
sure
these
people
are
still
with
your
company.
Many
employers
simply
fail
to
adjust
their
named
insured
endorsements
when
employees
leave.
But,
this
can
result
in
significant
savings
if
the
loss
of
the
employee
results
in
lower
risk.
4.
Look
for
Irrelevant
or
Repetitive
Coverage
Business
changes
and
it
may
change
dramatically.
Some
coverage
may
no
longer
be
necessary.
For
example,
if
a
portion
of
your
business
closes,
operations
change,
or
you
choose
to
outsource,
then
it
may
be
that
your
business
carries
coverage
that
can
be
eliminated.
5.
Adopt
and
Maintain
a
Consistent
Safety
Plan
A
consistent
safety
plan
will
include
the
elimination
of
hazards
that
can
become
claims.
Make
it
a
goal
of
your
business
to
enforce
a
safety
plan
and
follow
through.
6.
Classify
Your
Workforce
Correctly
Significant
savings
can
be
achieved
by
making
sure
your
workforce
is
correctly
classified
by
your
workers'
compensation
insurer
and
liability
insurer.
Your
premiums
are
based
on
the
type
of
workers
used.
If
you
are
a
painting
company
that
incidentally
uses
ladders,
then
you
could
be
incorrectly
classified
as
a
construction
business
and
your
premiums
will
be
greatly
inflated.
Classify
each
worker
and
make
sure
your
insurer
does
so
also.
7.
Discuss
Your
Premiums
With
Your
Insurer
and
Insurance
Professional
Too
many
businesses
don't
take
the
step
of
telling
their
insurer
that
they
want
a
better
rate.
Frequently,
insurers
will
discuss
the
premium
in
detail
and
will
suggest
ways
to
have
it
reduced.
8.
Become
Active
in
Trade
Organizations
or
Professional
Associations
Most
trade
organizations
or
associations
have
affiliate
members
that
are
insurance
companies.
As
a
benefit
of
membership,
your
business
may
receive
substantial
insurance
discounts.
LEGAL
REQUIREMENTS
“The
business
of
America
is
business”
–Calvin
Coolidge
UNIT
IV
/
LESSON
10:
page
9
9.
Adopt
Health
Specific
Changes
To
Your
Work
Place
Health
premiums
and
workers'
compensation
premiums
will
be
your
highest
‐
work
to
lower
the
costs
through
a
healthy
work
force.
Commit
to
setting
a
good
example:
quit
smoking,
become
active
and
see
your
physician
regularly.
Adopt
a
no
smoking
policy
at
your
company.
Allow
yoga
or
weight
loss
classes
to
be
held
at
your
break
room.
Encourage
proper
lifting
techniques.
Consider
a
partial
reimbursement
of
health
club
membership
as
a
benefit.
In
other
words,
taking
active
steps
to
create
a
healthy
work
place
lowers
premium
dollars.
10.
Training,
Training,
and
More
Training
Train
your
workforce
and
demand
training
as
part
of
their
employment.
Most
Insurers
will
offer
substantial
discounts
for
a
trained
workforce.
For
example,
liquor
liability
premiums
can
be
cut
by
15‐20%
if
servers
are
required
to
attend
alcohol
awareness
training.
Find
out
what
training
will
reduce
rates
and
get
your
employees
involved.
This
About.com
page
has
been
optimized
for
print.
To
view
this
page
in
its
original
form,
please
visit:
http://businessinsure.about.com/od/insuringyourbusiness/ht/htlowerprem.htm
©2011
About.com,
Inc.,
a
part
of
The
New
York
Times
Company.
All
rights
reserved.
Exercise:
Write
one
paragraph
summary
for
an
Internet
piece,
providing
advice
to
the
business
owner
as
to
how
to
keep
insurance
costs
down.