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Unexpected Business Expenses?

Unexpected Business Expenses? – Yes, this is a common search

many business owners conduct and for good reason.

Reducing business cost in any area is just as positive as increasing your profit margin.

This is where many general owners of the business can review and save,

and this happens to be your commercial policy.


Business Expense: Epedentures?

Commercial Insurance Premium – New Perspective –

So, when you see your next commercial insurance policy premium,

you will have a different perspective. Even if your premium is high in your eyes,

think about the costs to fix and replace everything

during a loss, if you were the only responsible party.

That can be a frightening image for any business owner, small or large.

This is true with industry as well. So, an aircraft maintenance business can

expect the same unknowns in a business loss as a Deli Owner.


Unexpected Business Expenses


Business Bottom Line?

These unexpected expenses could be devastating to you and

your bottom line. This is true at any business stage.

This means if you are a large commercial agency,

the lost factor still holds true for a smaller insurance agency.

These agencies were used for illustration purposes only.

These losses can also occur on a personal level as well.


Personal Coverage Level?

This image alone would not deter you from not driving

without insurance protection alone,

as an example of reducing premiums.

The loss rate or claim rate for insurance

companies to insureds is, small in comparison to

the total premium collected. Keep this in mind the next time you

are searching for any type of insurance coverage.

Commercial or personal. Review all areas to reduce

any possibility of gaps in business and personal protection and coverage.


Claim Pool:

(Bottom Line?)

Unexpected Business Expenses? –

The pool of Coverage – The Insurance Factor?

Good discussion, even if only a small percentage

of that insurance pool had a claim, the rest of the pool members, unfortunately,

might pay the price.

The total premium on all policy programs might have been increased.


Loss Increased?

This is due to the loss ratio the company might have suffered through a typical fiscal year.

This percentage of loss versus premium collected can factor into the reason for some

of the major premium increases. Next time, you might consider this scenario

when you receive an increase in your insurance rates.

Especially, since you have maintained your clean driving

record or have not faced any business losses.


The Insurance Plan:

(Ripple Effect)

It is no different when one member of the group creates ripples for everyone else.

Now, the ripples have affected every member in that pool.

It does not seem fair in this illustration that one member can affect everyone.

Unfortunately, the reality is, that this is commonplace, and happens

more often than you think. There are many reasons for insurance premium hikes,

but this plays a major role in the premium change. You can always consider these factors

in the equation when deciding to go with a particular insurance carrier.


Internal Insurance Components –

(Operational Analysis)

Let’s look at an insurance company on an operational basis.

What does that exactly entail?

This means, to look at the internal components that make up

the entire system of the operation.

Like with most things, it’s each individual component that makes

up the whole system that is worth considering.


Internal Functions & Processes

These internal components can be examined by what an insurance company is viewed

as, or through its functions. This is achieved by looking at the

“whole function” of the insurance company

and then breaking down individual components,

like ethics for example. This will shed light on the actual inner

workings of the insurance operation.


Understanding Internal Functions

Understanding the functions of an insurance company on both a

individual and whole basis will reveal its purpose and motivation.

This breakdown will help when language deconstruction takes place.

This is always a beneficial tactic for user and industry comprehension and study.


Insurance Layers?

The Insurance Onion – A good segway to review. As you can see,

there are many different layers to an insurance program, plan or company.

It is very similar to an onion. You must peel each separate layer back,

to reveal the next, and eventually the core. The process is like that

of insurance reviewing, as well. The different layers of insurance expose

the motivation behind most insurance companies and their practices.

Going below the layers of insurance coverage

can help you reduce any coverages no longer needed.

This only adds the reduction of unexpected business expenses. So, at face value, it

is an invaluable tool to have in your business housekeeping checklist.


Business Practices of Industries?

Insurance Companies Like Investment Firms?

Yes, this is a common thread in many consumers

and business owners minds. According to this description,

you might not see the similarities at first glance.

However, insurance companies for the most part,

whether commercial or personal lines,

borrow, invest and lend money.

Therefore, many of these insurance companies

are viewed as investment firms.


Unexpected Business Expenses


Investment Firms of Protection

So, what are investment firms? They are firms that borrow capital from its

policyholders. They do this to maintain the cycle of the system and function of

the insurance company. As you have learned, these functions include to,

borrow, invest, and lend money. This cycle repeats and continues to stay

in place. Another type of insurance company categorization is Reinsurance.



(Protection for Your Business)

What is a Reinsurance Company? – So, what exactly is a reinsurance company?

This type of insurance company can be viewed in the same way as a traditional

insurance carrier. The only distinction between the two is, that the policyholders

are themselves insurance companies.


Coverage Type

This type of insurance coverage will reimburse

those who have suffered loss. It is not as though the insurance itself

will return the borrowed monies to each policyholder. Instead, it is like a

reimbursement or loan program. You can find more information on your insurance contract.

Normally, this information will be spelled out so, if not,

do not hesitate to contact your local insurance agent or business industry professional.

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