Insureon CEO Ted Devine on WDIS-AM
Host: Insurance is too expensive for a company as small as mine. Disaster will never happen to me. I’m already covered. I don’t need insurance. Now you hear those phrases quite often from some business people. These are the common attitudes and misconceptions of business owners have when it comes to providing the proper insurance for their company. With those beliefs widespread, it’s not surprising that nearly 75% of businesses are underinsured by as much as 40% or more. Joining us now on W-CIS NewsLine is insureon CEO and Business Expert Ted Devine. Hello, how are you?
Ted: Good, Dan. How are you?
Host: Good, thanks. What kinds of insurance does a small business need?
Ted: Sure. That’s a great question. There are three basic types. First, all businesses need to think through whether they need what’s called a business owner’s policy – A BOP. The great thing about the BOP is it covers the property of the business primarily, a little bit of liability. So if a contractor has tools and equipment, a consultant has computers, and a restaurant has ovens and equipment. The BOP will cover that. So first that’s a really important element. The second is for consultants, and advisors, or accountants, technology firms who have data – they need to have something called a Professional Liability, or an E&O policy, which covers them in case the data’s lost or if they get sued because they gave advice that the client doesn’t like. Or they did a web design and the client isn’t happy with the work. So, the E&O policy will cover them in that situation. And then, if they grow, they’ll have employees – which is terrific and exciting – and we need to make sure those employees are covered. So, that’s what’s called a Workers’ Comp policy in case the employees get hurt on the job. Dan, those are the three basic types of insurance we deal with every day here at insureon.
Host: Well, tell us more about personal liability.
Ted: Having started my business career when I was 16 – my mom and I started a hockey store to pay for myself and my sister’s college. So, we’ve been doing this a long time. The most important thing from a personal liability perspective is a legal and structural element, which is to make that sure you incorporate, or in an LLC, where you separate the personal risk from the business risk. That includes, Dan, having separate bank accounts. That includes making sure that you’ve got good record keeping and minutes and board elements to make sure there’s clear, corporate governance around a separate legal entity. From an insurance perspective, what that means is it’s really important that you’ve thought through your insurance coverage because, for big companies like GM or Ford, they have other people’s money. They’ve got shareholders, debt holders. If they have a loss, they’ve got a big balance sheet. For my clients, and we’re passionate about this – we’ve got 40,000 clients across the country. We live and die with them every day. It’s their balance sheet. If they get sued, it’s their kid’s college education, it’s their retirement fund. We want to make sure that they have the resources of the insurance company behind them so that they can get that business operating as fast as possible – they don’t get hit with a lawsuit that would put them out of business. And so they can protect their balance sheet and their kids and their future.
Host: Can a company have a contingency plan in place in case something happens?
Ted: Ah, such a great question. Particularly with all the weather that’s been going on in the East Coast and all the new things related to data and technology and hackers – absolutely. It’s a wonderful, wonderful question. Really important for all small businesses. And a lot of them don’t think about it. So, they all need to have a contingency plan that is what they do – what is their 10 steps that they need to take right after an event. That should include calling all their customers, that should include making sure all their employees are safe, and it should include calling us and their insurance professional. We’re often the first protocol. Inside of those conversations, the thing that we need to make sure that they’ve got, around those three basic policies that I described, is two elements – one is what’s called business interruption insurance which is a great insurance product, and an endorsement usually to the BOP or inside of the BOP, which covers any lost profit from an event as well as the costs of getting the business back operational. And a great feature – if a supplier that they deal with is offline, it’ll also protect them from that. And then given all the technology risks out there right now, and all the stuff that’s in the news – data is such a big deal. Thinking through whether they need a Cyber Liability cover for an event like a hacker or somebody who gets at their data, is often a very inexpensive way to make sure that they’re protected in that contingency.
Host: Very good. Now, before we run out of time. Could you tell us what the Small Business Heroes program is?
Ted: Yeah, thank you so much, Dan, for asking. It’s one of the things that we’re really proud of. I mean, we’re proud of our firm, and all of our clients at insureon. But one of the things that we started as a way to give back to the real small business heroes across the country is the Small Business Heroes program. What we do is, once a week, we give away a gift, of usually around $500, to a small-business owner. Our first one was to a cancer survivor who wanted a color printer to help grow her interior design firm. The last one was to an inner city nonprofit who teaches financial literacy to kids about how to open a bank account and how to manage a loan. She wanted an iPad to make those lessons more compelling for the kids. We give back. It’s a way that we give back to the small business heroes across the country. And your listeners can go to insureon.com, or go to smallbusinessheroes.com and they can learn about the program. Probably the best part of my week is to make that phone call to give somebody the gift.
Host: Well, how’s that. Well, I want to thank you very much for coming on and clarifying a very complicated subject. Before you go though, remind people what those websites were.
Ted: Go to www.insureon.com, or go to smallbusinessheroes.com. And we’re also on Twitter and Facebook as well.
Host: Very good.