business trends | by kathleen sebelius
Insurance Pitfalls and Guidance
The world of insurance is filled with pitfalls that many new business owners are unfamiliar with. And over time, as laws and business conditions change, even experienced business owners may need some guidance on insurance along the way. The Kansas Insurance Department gives business owners the information needed to protect their business, employees, and themselves.
Business owners are busy, and need quick, concise information on important business matters like insurance. The Kansas Insurance Department has developed common sense solutions to enhance business, not impede it. When was the last time you heard a regulator say that? For example, my office has designed a business insurance information packet specifically geared toward helping small business owners. The packet includes information on:
• Health insurance
• Workers compensation
• Property and liability
• Home-owned business
• Tax credit for health insurance
In addition, one of the most well received programs this year is the tax break offered to small business owners who begin to provide health insurance for their employees. Due to guidelines outlined by the Kansas Legislature, they must employ between two and 50 employees and have not contributed to a health insurance premium for those employees in two years. Eligible employers receive a tax credit for a portion of the contributions they make to health insurance plans for employees. Specific rates are listed in the information packet.
More good news: workers compensation rates have continually dropped the last five years. In that time frame, approximately $118 million in savings has been passed on to business owners. The law requires that an employer have a workers compensation plan to pay employee benefits for job-related injuries, disability, or death.
• Present law covers all Kansas employers except those in certain agricultural areas or those with a gross annual payroll of less than $20,000.
• All payroll is taken into account, including that paid in Kansas or elsewhere.
• If the employer is a sole proprietor or in a partnership, the wages paid to the owners (or their family members) is not used in computing the $20,000.
Because of the dropping workers compensation rates, meeting this requirement is easier than ever.
Something else to keep in mind is how important it is to have the right amount of property and liability coverage to protect your business. There have been situations where business owners have been shocked to learn after a claim was made that they were not properly insured. I urge you to talk with a licensed insurance agent that you trust to make sure you understand the coverage. If you have any other questions, call the Kansas Insurance Department. We will do whatever we can to make sure your insurance will be there for you in case you need it.
As a quick checklist, take a moment to review the following suggestions:
• Evaluate your needs - a good agent can help you determine the most appropriate insurance coverage to cover your needs. Make sure you compare your options.
• Check agents and companies - make sure the Kansas Insurance Department licenses both the agent and the company with whom you are dealing.
• Know what is excluded - make sure you know what is and what is not covered by the policy you are considering.
• Consider a higher deductible - you can reduce your premium payments by raising the deductible. Make sure your deductible is high enough to reduce the premiums, but not so high that you cannot pay the deductible.
• Don't underinsure - an expensive policy may not provide enough protection. The Kansas Insurance Department works for you, both as a business owner and an insurance consumer. It is our goal to be sensitive and responsive to your needs so that you and your business can prosper.
The Honorable Kathleen Sebelius is Commissioner of Insurance with the Kansas Insurance Department. Contact Kathleen via the net: www.ksinsurance.org or call 1.800.432.2484. Write KID at 420 SW 9th Topeka, Kansas, 66612.