Professional Indemnity Insurance News
Sun, 19 August 2007
MBF To List On ASX
MBF Australia said it intends to demutualise and list on the Australian stock exchange in an attempt to grow and diversify its business.
The health insurer said its plans have been endorsed by the MBF Council.
It said a share market listing is likely in calendar 2008.
The board believes that demutualising is in the best interests of policyholders, that it will maximise MBF's future growth potential and enhance its ability to compete in a rapidly changing environment," chairman John Conde said.
Tue, 26 February 2008
What is Public Liability Insurance?
Public liability insurance is an insurance policy which offers the insurer protection from people claiming compensation in the event of an accident or loss in or around their home or business. Thus if there was an accident on your property and someone were to lodge a compensation claim, then your public liability insurance policy will assist you with the payment of compensation. Public liability insurance may additionally offer the insurer protection against claims from trespassers as well as provide cover against injuries made by falling objects or people carrying out repairs.
http://www.netstarter.com.au
Tue, 04 March 2008
Why get an insurance quote
People who have the cheapest car and home insurance policies do so because they shop around for the best deals especially when theirs is coming up for renewal. For those choosing to accept their renewal quote each year, by letting your policy roll on you're probably paying far more than you need to when all you need to do is get a couple of quotes and see what deals are on offer.
It is usually the case that if you stick with the same insurer for more than 12 months you will be paying over the odds on your insurance because there are always insurers and insurance companies offering attractive low cost rates in order to entice new customers to their policies and most offer you online discounts.
There are now insurance policies which allow you to insure yourself against almost any eventuality. There's car insurance, buildings insurance, contents insurance, health insurance, life assurance and critical illness insurance. Mortgage payment protection insurance (MPPI) and even the family cat or dog can be insured.
Source: http://www.insuranceguideuk.co.uk/
Sat, 08 March 2008
Professional Liability Insurance: A Concept
Can you think of something that not only reduces your tension but also minimize your financial worries related to work? Professional liability insurance is an effective instrument that may reduce your work pressure to a great extent and help you to lead a tension free life in many ways.
Professional liability insurance is a kind of insurance policies that covers all your professional liability and worries while practicing your profession effectively. In todays world, the importance of liability insurance has increased to a great extent as more and more companies and professionals are seeking professional solutions for their problems. In many countries, it is impossible to practice without adequate professional liability protection. Therefore, professional liability insurance has been gaining popularity as it never had.
There are many professional liability agencies and companies that provide different types of policies that will help you in long term. You can check their quotations and terms and finally come to make the best decision to take the most beneficial policy or your company or yourself. Furthermore, you can search through the internet to check the usability of various professional liability policies provided by different companies around the world. Check their offerings well and you can easily make out some differences fro yourself.
Internet is the best medium to search out productive liability policies that may help you and your company to get the benefits of the prevailing time. Whether you a doctor, an architect, an engineer, a lawyer or any other professional, the good points of professional liability insurance is must for all. It will save to fight for any undesirable financial demands from any third party and will help you to protect your rights. The provisions of professional liability insurance differs from country to country and company to company, make sure you go through all the terms and conditions very well to get the benefits.
Source; http://www.ezine-writer.com.au/articles
Mon, 17 March 2008
Getting Started Buying or Building a New Business
Getting Started Buying or Building a New Business
(I) Buying a business
So you want to want to be an entrepreneur and strike out on your own. You want to be your own boss and you have experience in a particular field or a skill but feel more comfortable running an existing operation.
You see an opportunity to make more money. What do you do next?
(1) Find a business to buy. Places to look:
People you know who want to sell or retire.
Local newspapers. Check to papers that serve your town and surrounding towns, too.
Go online. Check sites that have businesses for sale like www.bizbuysell.com or
www.businessbroker.net.
Ask your accountant, attorney or friends. Tell them to keep you in mind.
(2) Ask to see their books and client list
Have your accountant check the books for the past three years.
Call at least ten clients to see if they're still current clients and what the reputation of the business is.
(3) Evaluate the business
For all businesses there is a formula to use in determining a business value. Example:
Take the Net income to the owner and multiply by three.
Purchase the client list and pay the owner a fixed price for each client who signs up with you.
Include or exclude business equipment. Make it clear what you want to buy. Don't assume.
(4) Make an offer
Use one of the proven methods to evaluate a business and make the owner an offer, which should
include the following:
Total amount you're willing to pay.
Down payment.
Timing of payments (monthly, quarterly, at the end of the year).
Financing, if necessary. You may have to pay the owner interest on the unpaid balance.
No compete clause. Make sure he's selling you all of the business and won't try to take back
clients once you sign the agreement.
(5) Write up a contract Have an attorney do it. Have it witnessed and notarized.
(II) Building a Business From Scratch
You've looked and can't find a business to purchase or you would rather start a new business without the hassle of negotiating over someone else's business and/or financing a purchase.
Are you ready to run a business? Do you have the knowledge to run the daily operations of a business as
well and perform the skills that people will hire you to do? This web site will help.
You need clients! How will you get them? Section Seven of this website covers advertising but there are several things you can do right away. Don't wait until you've opened the new business to get the phone
ringing.
See if any clients who work with you at your current job are willing to go with you.
Tell business owners who you would like to work with to call you at your new phone number.
(III) Make a Business Plan (Highly Recommended)
You'll need it, in conjunction with this website, to successfully start a new business venture. If you want financing you will need it. Sit down at your computer, fire up the word processor, and use the Checklist for Success to map out how you envision the company. Itemize the business services you want to offer.
Source: http://www.small-business-help-advice.com/New_Business.htm
Mon, 17 March 2008
Different Indemnity Insurance Covers
Taking adequate indemnity insurance is important for everyone in todays competitive world. Professional insurance companies and firms can provide different kinds of insurance protection catering to different needs and requirements. It is the best way to get adequate financial compensation and tension free life when things actually go wrong. In this article, well talk about these different types which are important in our day-to-day life:
Professional Indemnity Insurance
One of the prominent insurance is professional indemnity (PI) insurance that protects a person against his or her legal liability for losses and damages suffered by the customers as a result of your negligent advice.
Employers Liability Insurance
Under this law, employees have the facility to take adequate liability insurance protection with an approved insurer to protect them against any kind of claim from employees for accidents or sickness caused through work.
Public Liability Insurance
In this type of insurance cover, an employer is free to take adequate protection against damage caused to the people as a result of your business activities. It also covers any related legal costs.
Product Liability Insurance
Such insurance policy can be taken against any kind of injury or damage caused by faulty goods. It is important for a person who indulges into manufacturing, repairing or retailing of goods and services.
Property & Content Insurance
As a responsible person, you can seek insurance protection against business property, including premises, fixtures and fittings, stock, computers and equipment. Freelances can seek protection for equipment used for business purposes, contents insurance, or purchase specific business insurance.
IR35 & Legal Expenses Insurance
IR35 Insurance pays costs to cover professional fees relating to tax investigations covering.
Income Protection Insurance
In this arrangement of insurance protection, regular income can be protected in case of long-term sickness, paying their salaries during the period of incapacity.
Permanent Health Insurance
This insurance protection helps you to get compensation in case of health related problems. It covers general insurance to critical illness medical problems.
By: Editor 123
Article Directory: http://www.articledashboard.com
Sat, 29 March 2008
Umbrella Insurance Protects Your Legal Liability
At some point, you have probably heard of umbrella insurance, but have no idea what it is. Well, first off, it does not cover the umbrella you protect yourself from the rain. It is a figure of speech. An umbrella policy is designed to shield you from almost everything that your home and auto insurance does not, as well as fill in gaps in coverage when the limits of your regular policy are exhausted.
Every day, there are personal lawsuits filed against ordinary citizens, with the reasons ranging from the frivolous to the justified. When and if this happens to you, you need to be prepared. More often than not, people are sued and have no extra protection to block the plaintiff from going after their personal assets in the lawsuit. To protect yourself from such a quandary, you need to have umbrella insurance.
An umbrella is often referred to as excess liability. This excess liability coverage kicks in when the underlying limits on your home or auto policy have been exhausted, or if you are sued personally for something that neither your home nor your auto insurance covers. Depending on the company, you can purchase anywhere from 1 to 5 million dollars worth of excess coverage, sometimes as high as 10 million.
The amount of coverage you select really depends on how much you are worth. If you have 5 million dollars worth of personal assets, you should get a 5 million dollar umbrella. It is not uncommon for someone to buy a 5 or 10 million dollar umbrella policy even if that number far exceeds their net worth, because the coverage is so cheap to buy.
Most insurance companies will not offer you the coverage unless you have both your home and auto already insured with them. Also, the insurer will require that you maintain a certain level of liability on the home and auto policies in order to qualify for the excess policy. Usually, you must maintain at least $250,000 of bodily injury liability per person, $500,000 per accident, and $100,000 for property damage for your autos, and $500,000 of liability for your home.
The coverage is cheap. It is possible to obtain 1 million dollars worth of excess liability for as little as $120 dollars. The more cars and homes you have, the higher the price for the insurance, but the cost is still low. In addition to your home and cars, liability associated with any other conveyances you may have, such as boats, motorcycles, and other recreational vehicles, may also qualify for coverage under the umbrella, depending on the insurance company.
You are probably wondering when the umbrella would actually come into play. Here is an example: If you are involved in an auto accident where you crashed into a pedestrian who was walking on the sidewalk, resulting in medical expenses for that person that costed more than what your auto policy covered, the umbrella would be used. Or, if that pedestrian then decides to sue you for negligence and seeks punitive damages, your umbrella can be utilized to cover your legal expenses and to pay any judgements levied against you.
It is also important to understand that the excess liability covers you for all sorts of things that have nothing to do with your cars or homes. Things such as personal injury protection are covered. This includes false arrest, false imprisonment, malicious prosecution, defamation, invasion of privacy, wrongful entry, or eviction.
Also, some umbrella policies provide coverage for you if you are sued in connection with any charitable boards or organizations of which you are a member. You may have to contact your insurance company and pay an extra premium for this type of coverage.
I hope this has helped illuminate to you the importance of having umbrella insurance. Without it, your personal assets are totally vulnerable in any lawsuit or legal action. Talk to your agent about it and ask how much it costs. Even though multi-million dollar lawsuits are not common, they can happen. So, an umbrella is probably worth it.
Written by Jim Pretin
Fri, 11 April 2008
Public liability insurance
Public liability insurance
If you are tired of searching around online for public liability insurance then we have the perfect solution! If you run are self employed or run a business then the chances are you have more than enough to do without the stress of looking for a comprehensive policy at a low price, for this reason we have created a specific quote system for liability insurance in the UK which will search for the best price from a panel of different insurers and provide you with a comparative quote.
Our quote system is available online 24 hours a day to provide you with a quotation for your public liability insurance from several different insurance companies. You could save yourself both time and money on your public liability policy by letting our automated system do the hard work of searching our panel of insurers for the lowest premium and/or excess and after this you might want to try out our automated system for landlords insurance which again searches many insurers on your behalf.
You may be wondering why you actually need a public liability policy, the main idea of this insurance is to cover yourself against a member of the public(for example a client you are working for) holding you liable for any injury or property damage you cause during the course of your occupation. A prime example would be if you were a builder and whilst carrying your equipment into the property you accidently knocked over an expensive item which the customer held you liable for the cost of repairing or replacing. Your public liability insurance also provide cover against the person holding you liable for injury, for example if you left your tools on the ground and the customer then tripped over them injuring themselves and held you liable.
Source:http://www.easypublicliabilityinsurance.co.uk
Wed, 07 May 2008
Liability insurance
Types of liability insurance you need to consider:
Public Liability
Public liability insurance protects you and your business against the financial risk of being found liable to a third party for death or injury, loss or damage of property or pure economic loss resulting from your negligence.
Professional Indemnity
Professional indemnity insurance protects you from legal action taken for losses incurred as a result of your advice. It provides indemnity cover if your client suffers a loss - either material, financial or physical - directly attributed to negligent acts.
Product Liability
If you sell, supply or deliver goods, even in the form of repair or service, you may need cover against claims of goods causing injury or damage. Product liability insurance covers damage or injury caused to another business or person by the failure of your product or the product you are selling.
Tue, 20 May 2008
Professional Indemnity Insurance
Business protection, by the experts, for the experts.
No matter what professional business you're in, client expectations of service and quality of advice continue to grow. That's good - it means we're all striving to improve on what we do. The down-side is the increasing number of claims for alleged negligence or breach of duty.
The need for professional indemnity insurance has never been greater. It's a 'must have' - without the right insurance, you're putting your business and personal assets at risk. It's not just the potential damages that may be payable, it's the cost of defending claims that may be made against you.
Source: http://www.aon.com.au
Thu, 29 May 2008
The 5 Common Mistakes Business Owners Make When Evaluating Their Insurance Requirements
Looking over your insurance premiums each year, you may be wondering how you could save a dollar or two on your next premium. As an intangible asset, it can be difficult to put a value on insurance ... until something goes wrong and you need to claim. Insurance specialist Brett Wrightson from Brian Bushell & Associates, highlights the five most common mistakes that business owners make when evaluating their insurance requirements:
Not Understanding Their Full Risk Profile
When reviewing your insurance needs, it's essential to sit down and determine what types of events could occur in your business that would create adverse impact. From there, you need to determine what would have the biggest business impact - in terms of dollars, time and effort. Then you need to work out how to ensure that you are adequately covered against these risks.
Often policy holders will do away with one part of a policy thinking that they can save money. For example, they will go for theft, fire and glass coverage, but not take out burglary even though it's a relatively minor additional fee.
It is Murphy's Law that the one thing you leave out is the one thing you need to claim for on your insurance. And it can be for the most oddest of items. The strangest story I've heard of is a fish and chip shop that was robbed of all their frozen fish. Although it was never proven, it was suspected that a competitor fish and chip shop, just around the corner, decided that they wanted a freezer full of product to sell without the set up costs!
Not Disclosing Everything!
Yes, it is true ... if you don't disclose everything upfront when you sign up your insurance policy, the insurance company is quite within their rights to not pay out on your claim. Worst still, they won't even refund your premium paid to date. Therefore, don't hold back. Disclose anything relevant to your insurance upfront to save any drama's at a later date.
nsuring Assets at Written Down Value Instead of Replacement Value.
It is essential that you insure your assets for REPLACEMENT value. In other words, how much would it cost you to repurchase the items insured at full price. A common mistake, particularly when purchasing an existing business, is to insure the assets at the "written down" (or depreciated) value, rather than replacement cost.
Being "cheap" on their premium
Don't get caught out by trying to save yourself a few hundred dollars on your insurance premium, to the detriment of being fully insured. Being cheap now could end up costing you thousands of dollars down the track.
Not listening to your insurance broker
Your insurance broker is the best person to advise you on insurance cover. Having seen many similar businesses to yours, they have seen other business owners go through the pain that you don't need to. Your insurance broker will know what works for your type of business and how to get it for the cheapest possible price. As an insurance agent, they know the ropes and can maneuver you through the subtleties in insurance policies which will save you dollars in the long term.
It's a quick, efficient and cheap way to grow your profits immediately!
Source:Tabitha Wellman
Thu, 12 June 2008
Insurance: Why worry?
During our lives all of us are exposed to the possibility of a variety of risk events such as:
Work accidents
Major illnesses
Death
House fire
Motor accidents
Theft
While death is of course inevitable at some time, some of the other risk events may never happen. Also the likelihood of some of these risks occurring may be greater at particular stages of our lives. For instance most major road accidents involve younger people while most major illnesses occur with advancing age.
Also at different times of our lives our financial plans and our dependents are more vulnerable to the financial effects of the risk events occurring. For example a family with young children, a large mortgage and only one breadwinner would experience tremendous pressure if the breadwinner became incapacitated for one reason or another.
The chances of being able to accurately predict when a risk event will happen are very slight. Occasionally there will be symptoms of the onset of a disease but usually these things come out of the blue.
Therefore, if our finances would be vulnerable to the consequences of a risk event, it would be wise to protect ourselves and our dependents against those consequences. This can be done in a number of ways, from taking steps to ensure that we are not endangered through to purchasing insurance that would compensate for the financial consequences of the risk event occurring.
Here are five steps that can help to manage personal risk:
1. Identify the risks that you are exposed to now and in the future.
You should look at the risks that may affect your body or that of your partner, such as death, disability, illness and the need for long term care due to aging. And you should consider risks from theft, fire and other misfortunes relating to any property you may have.
Another risk that some readers may need to consider is the risk that someone may decide to sue you for a loss that they consider you have caused them. This can particularly affect professionals and tradespeople. Often having adequate Professional Indemnity Insurance is a condition of operating in a particular field but if this affects you, you should ensure that your cover is adequate against likely successful claims.
2. Analysis of Risks.
The answers to the following three questions will provide a good basis for your risk management program:
What is the potential loss if the risk event occurred?
Who will suffer the loss?
How likely to occur is it?
The way they can work is illustrated in the following example:
Bill and Sue are in their early 30's and both have good jobs earning $50,000 and $40,000 respectively. They are paying $15,000 p.a. on the mortgage on their house and are saving $20,000 p.a., half in superannuation and half in other investments. Sue is about to leave the workforce to start a family and they need to consider what would be the impact of any reduction of Bill's earning capacity.
The answers to the three questions could be:
If Bill was completely incapacitated, the family income could reduce to zero, they could deplete their savings and in the worst case they could lose their house due to their inability to continue their mortgage payments. As well as their living expenses they need to consider the impact of medical bills which could make the situation worse. The situation could be eased if Sue were able to go back to work.
They would suffer these financial consequences directly. They could face extreme financial hardship which, of course, could drastically affect their child's future prospects. If Bill were to die he would not feel the financial effects himself but Sue would have to cope with the double whammy of financial disaster and grief at his loss.
In this instance, too much hangs on one person's health for it not to be vital to insure Bill against death and disability and to have good medical insurance for the whole family. However, his family medical history may give some pointer towards the need for particular protection.
Of course this is only one of the risks of death that this family is exposed to. They would also need to analyse the implications of any misfortune that could befall Sue. If she were to die or be disabled with a young family, the last thing Bill would need on top of his grief would be the extra financial costs of housekeeping and raising the children.
3. Reduction of Risks.
This is the process of doing something that will reduce the likelihood of a risk event happening. Again a set of three questions can be asked:
What precautions can be taken?
Are the precautions reasonable? (remember you have to live and
enjoy your life).
What will be the benefits of taking the precautions? These could be
reduced insurance premiums or other side benefits.
Often simple precautions like installing deadlocks or always locking the car can reduce the likelihood of loss quite considerably. And reducing weight, eating healthy food and giving up smoking can reduce the likelihood of early traumatic illness. You might even find that some of these actions (e.g. giving up smoking) can make your insurance cheaper too.
4. Consider Retaining Some Risk
It could be that the cost of obtaining protection might outweigh the benefits. Or the likelihood of the risk event occurring is very slight or its cost could be easily afforded. In these instances it may be prudent to retain the risk yourself, to self-insure.
Decisions on retention should not be taken until the previous three steps have been completed. It is also vital that we don't underestimate the consequences of the risk if we decide to self-insure. Remember we can't go back and tidy up once the event has happened. It is therefore prudent to get expert advice before taking this option.
However once a risk is identified, analysed and reduced as much as possible a rational decision to self insure may be considered. The questions to ask at this stage are:
If the event does happen what will be its financial impact? (can
you afford it?)
Can you afford the insurance premiums?
Can part of the loss be afforded?
Do the premiums represent good value?
5. Buy Protection Against the Financial Consequences of the Risk Event
When you have decided it would not be prudent to carry the financial consequences of the risk yourself you need to purchase appropriate insurance protection. This transfers the financial consequences of the risk event to the insurer and to compensate them for taking on that risk you pay them a premium.
The act of buying insurance does not reduce the likelihood of the risk event occurring but it does mean that the financial consequence is removed or reduced. In our earlier example, insuring Bill's life for a large amount will not reduce the likelihood of his death but it does mean that if that unfortunate event was to occur Sue and the family could cope financially.
The range of insurance cover that can be purchased is extremely broad. Cover for just about every conceivable risk is available. Some policies cover a number of related risks while others are very specific covering only the financial consequences of a very particular risk event. Some risks are covered by the policies of a number of insurers while for other more specialised risks only one or two insurers provide cover.
Different insurance policies provide a wide variety of different benefits which may include:
A specific lump sum of money.
A lump sum of money plus bonuses related to the company's
investment performance.
Cost of replacement of or repairs to a damaged or stolen item.
Provision of a stream of income
Meeting all or part of defined medical expenses.
Sometimes your premium will just buy cover for a particular period of time, at the end of which you have to renew your policy. In other instances the premiums are regular and may even have a savings/investment component built in.
Because the range of insurance on offer is so wide, you should shop around before you purchase. First you should find the policies on offer that cover the risks you need covered. Then you should read the policy to make sure that there are no exclusions relating to a particular risk you might face.
Also check that the benefits are in a form that will be appropriate should the risk event occur. And lastly you should look for the most cost effective of the products that would cover your particular risk need.
This can be very complex, so most people find it is very useful to purchase their insurance from an expert with specialist knowledge in that.
Source: Matt Davis
Mon, 23 June 2008
Business: Avoiding Loss with Proper Risk Management Strategies
Solid protection in the form of commercial insurance, should buildings, tools or materials become damaged, is important for company survival, and many individuals believe that having insurance coverage will replace losses in the case of fire, theft or accidents.
However, there are many financial considerations that office insurances cannot cover.
For example, while your business insurance might provide coverage to replace damaged machinery vital to your companys functioning, the lost productivity from the beginning of the accident to the end of downtime can mean serious costs that could be crucial to your companys survival.
Risk management strategies help reduce financial loss and avoid unnecessary failures of productivity that many businesses cant afford and shop insurance policies cant cover.
While full business insurance coverage is important and vital to the survival of a small company, knowing the risks and the consequences of downtime are imperative.
For example, a damaged piece of machinery can be replaced, but losing a client that didnt receive his shipment on time or having disgruntled employees that dont find their workplace conductive incurs long-term financial loss that most small business need to avoid.
Any financial impact to your small business affects its competitiveness and overall success.
When analyzing what factors need to be taken into consideration to minimize lost income, having solid, comprehensive business insurance is a must.
A professional advisor can help you choose which type of coverage and commercial insurance policy is best for your enterprise.
During discussions of office insurance options, ask your advisor about deductibles or excess that your business may have to absorb should an accident occur.
Always read the fine print of your policys coverage and know ahead of time what youll be facing if misfortune strikes.
Then, prepare a plan to deal with those risks.
Avoiding risk keeps your business competitive in the marketplace and helps maintain low costs and lost productivity.
Examining your businesss workplace for potential accidents or hazards and correcting the situation before something goes wrong can help prevent crucial financial loss.
Preparing a plan to deal with downtime minimizes the financial impact to your small business.
Also, knowing the potential risks your company faces can help you transfer these same risks to commercial insurance companies, reducing loss should your business suffer an upset in productivity.
Discuss risk transfer with your insurance advisor and be fully prepared to deal with financial losses beyond direct material damage.
Written by: Frank Hills
Sun, 29 June 2008
Do You Work For Your Money Or Does Your Money Work For You ?
The Poor Cash Flow Pattern
In order to understand the three basic cash flow patterns, you must first understand the difference between an asset and a liability. When you stop working for money, an asset is something that will put money in your pocket every month. A liability is something that will take money out of your pocket every month. This idea touches on the difference between earned income and passive income.
The first basic cash flow pattern is the poor cash flow pattern. Before most people even learn about money they want things, and so they learn first to work FOR money. As their income is earned it is just as quickly spent on their list of wanted items. The poor cash flow pattern has earned income flowing in and entirely back out to expenses.
It does not matter if you have a sizeable income, because money does not make you rich or poor. Money is just a tool. It is how you are managing the tool (money) that determines whether you become rich or poor. Even with a substantial income you are still poor as long as your focus is only to earn your income and pay your expenses.
You may make $500,000 a year, you may have enough income to cover all of your expenses, but if you were to stop working for money you would quickly realize that you are poor, and the idea that you were not was just a temporary illusion.
The Middle-Class Cash Flow Pattern
Eventually people get tired of this routine and begin to gain better understanding and control over their expenses. Enough time spent focused on working for money may produce extra income in the way of a raise or a promotion.
Most people still have not spent any time to financially educate themselves, so they don't know what to do with the extra money. They don't have any ideas of their own about financing their retirement, either. The extra money is usually used to buy a newer car, a bigger house, and anything left over usually accumulates as savings. Eventually most are sold on putting the extra money into a portfolio for their retirement, usually consisting of mutual funds.
These purchases make life more comfortable, and so feel like assets...but they create an expense every month for a very long period of time. The misunderstanding is made worse by bankers who ask you to list your cars and home as assets against loans. By definition, these purchases are liabilities.
The Wealthy Cash Flow Pattern
A change of focus to passive income leads people down the path to a wealthy cash flow pattern. When you look at the pattern of the wealthy you may notice- they do not get their income from a job. Their cash flows in from assets.
Imagine spending your time figuring out a process that will automatically produce some income for you every month. Now imagine duplicating and improving upon that process until it automatically produces your ENTIRE income every month. Finally, you will stop working for money. That process is a business, and that income is a passive income.
From that point forward you will be financially independent. You will not work for money, you will have money working for you. It might take you 2, 3, or even 5 years to establish a system to that point, but once you do you can retire. Once you retire, you have all of your time to spend however you like.
This is the reason understanding the three basic cash flow patterns is so important. These patterns demonstrate the reason why you can become financially independent in just a few years working at a seven dollar an hour job. Your biggest obstacle in the beginning is controlling your expenses and changing your focus from earned income to passive income. Once you have become committed to these fundamental ideas, only persistence stands between you and great wealth.
Written by: Frank Hills
Mon, 07 July 2008
Reducing Your Insurance Rates Dramatically -- 4 Time-Tested Tips For Any Policy
There are many different ways you can save in different insurance policies.
However, some things that will help you save in one policy will have no bearing whatsoever on another policy.
Here are things that will help you save across all insurance policies...
1. If you want a discount, get your health insurance policy from the same insurer you bought your other policies from.
Every insurer will typically offer a discount if you buy more than one policy from them.
Nevertheless, all the money you may get as discount may still be much lower if weighed with savings you'll make by getting your policies from several insurance companies.
2. Take it upon yourself to ask your agent or broker about all the discounts available to you with your present insurance carrier.
There's a possibility that your broker has left one or two out.
The only way to be sure it's false in your case is by taking the time to ask your broker to list out all discounts that your insurer offers.
Do not be surprised if you discover discounts that you've never heard of.
3. You'll attract cheaper rates if you opt to pay your premiums yearly and not monthly.
Yes, monthly payments might be stressless but it is also less affordable.
There are transaction fees that are incurred when processing a check. .
While a yearly payment attracts a single check and therefore a transaction every year, monthly payments attract twelve.
You'll then have to pay the total of twelve transaction charges.
Apart from this there are also administrative costs that are incurred due to the monthly payment option.
A clear example of such is the cost associated with sending out payment notices.
All such cost to your insurer is eventually borne by you (that's in addition to their own profit margin for providing such a "convenient" option).
4. You will reduce your health insurance rates by a huge margin if you take out time to do extensive and thorough shopping..
You will start your shopping right if you make inquires from friends about their experiences with different health insurance carriers.
Doing this helps you avoid being led to just the provider with the biggest hype but to the carrier that gives the best price/value.
An acquaintance is more likely to tell you if they had an unpleasant experience with a provider.
If you ask your friends and acquaintances - you'll hardly buy from a bad insurer.
5. You might save some hundreds of dollars by simply obtaining and comparing quotes from about five insurance quotes sites. And, it will require just a total of 25 minutes.
Written:Matt Davis
Sat, 12 July 2008
The Weird and Wonderful World of Insurance
A lawyer in Charlotte, NC purchased a box of very rare and expensive cigars, then insured them against fire among other things.
Within a month, having smoked his entire stockpile of these great cigars and without yet having made even his first premium payment on the policy, the lawyer filed a claim with the insurance company.
In his claim, the lawyer stated the cigars were lost "in a series of small fires."
The insurance company refused to pay, citing the obvious reason: that the man had consumed the cigars in the normal fashion.
The lawyer sued....and won! In delivering the ruling the judge agreed with the insurance company that the claim was frivolous.
The judge stated nevertheless, that the lawyer held a policy from the company in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what is considered to be "unacceptable fire," and was obligated to pay the claim.
Rather than endure lengthy and costly appeal process, the insurance company accepted the ruling and paid $15,000.00 to the lawyer for his loss of the rare cigars lost in the "fires."
But... After the lawyer cashed the check, the insurance company had him arrested on 24 counts of ARSON!
With his own insurance claim and testimony from the previous case used against him, the lawyer was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a $24,000.00 fine.
Written by : Matt Davis
Sun, 20 July 2008
Insurance policy confusion
Insurance law experts have called on insurers to address the confusion surrounding the definition of permanent disability in insurance policies...
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TurksLegal financial services partner Alph Edwards said unclear language at critical places in insurance policies means it is harder for insurers and trustees to administer them, resulting in unnecessary costs to consumers.
Currently, the wording in many life insurance and superannuation policies with cover for total and permanent disability (TPD) is causing lack of consistency and uncertainty for all involved courts, insurers and consumers, he said.
Insurers and super trustees need to clarify this immediately.
According to Edwards, the latest NSW Supreme Court decision (Mabbett v Watson Wyatt Superannuation & Anor) highlighted the need to address the issue.
While the court confirmed that the correct date for assessing the likelihood of an applicants future return to work is six months after leaving a job due to injury, a previous judgement suggested the correct date was when the insurer came to assess the claim.
Heres a case where the judgement is totally at odds with another judges decision on essentially the same thing Its not the judges fault. Its a fundamental lack of clarity in what they are being asked to interpret, Edwards said.
This decision throws out a challenge for life insurers and super trustees to think about the words they use in their group life policies and make the necessary changes to make it absolutely crystal clear how you go about assessing TPD, including this time issue.
Edwards said this was just one of several traps inherent in the definitions and that needed urgent attention.
SOURCE: Justin Lim - Money Management
Sat, 26 July 2008
Who wants to be a millionaire?
Australia now has more of them than Brazil or Spain. John Collett looks at the reasons why.Thanks to the resources boom, the ranks of Australia's millionaires swelled more quickly last year than in most other developed countries...
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The number of Australians with financial assets of at least $US1 million ($1.03 million), excluding the family home but including superannuation, rose 7.1 per cent to 172,000, according to a survey by Merrill Lynch and Capgemini.
Of the 71 countries surveyed, Australia ranked 10th by number of millionaires.
Australia has more millionaires than Brazil and Spain, despite those countries having much bigger populations. As expected, the US is still the richest country and is home to 3 million of the world's 10 million millionaires.
Yet the large emerging economies of China, India, Russia and Brazil are growing their ranks of millionaires much more quickly than countries with fully developed economies. China, which had 415,000 millionaires last year, is on the verge of overtaking Britain and its 495,000 millionaires.
However, the credit crunch and turmoil in world financial markets slowed the millionaire club's growth rate last year and is expected to affect this year as well.
Wealth in Australia has been generated in several ways, says Thomas Alexy, Merrill Lynch's head of global wealth in Australia. Certainly, the booming demand for commodities has helped, he says.
"But the wealth comes in a lot of shapes and forms."
Apart from the handful of lottery winners, the prerequisite for building wealth is either being successfully self-employed, having a job with a high income or receiving an inheritance.
Yet plenty squander their income without having much to show for it.
Those with discipline who get good advice and take full advantage of Australia's quite generous tax system for borrowing to invest tend to do the best, Alexy says.
He says successful long-term investors are those who preserve their capital with good asset allocation and "never try to hit the big home run".
Andrew Inwood, the founder of brandmanagement, which conducts market research for the financial services industry, estimates that one in four of Australia's millionaires was born overseas.
"Migrants with money used to be mostly from Europe but are now from Asia and even the Middle East and Africa," Inwood says.
He says another striking feature of Australia's millionaires is that about three-quarters own their own small or medium-sized businesses and more than 70 per cent are tertiary educated.
PATIENCE
Doug Turek, the founder of high-end financial planning firm Professional Wealth, says wealth is driven by age, income and a few habits or traits - the main one being patience.
"Barring a few dotcom or iron ore millionaires, it is very hard to accumulate assets quickly; you need time for these things to build. It doesn't necessarily matter if your investment focus is strictly shares or direct property, or a mix of those things or even building a business. The key is having a disciplined focus over a long period of time."
Turek has developed an online survey (www.wealthbenchmarkets.com.au) where people enter their financial details anonymously and in return are told how their wealth compares with others of the same age and income.
More than 90 per cent of the participants in the survey are male. "Males seem to be picking up higher income roles than females," Turek says.
"There is plenty of other research to show that women, because of their time out of the workforce and inequalities in roles and promotion, are not as wealthy as men."
However, Turek says the marked predominance of wealthy males in his online survey may be partly because men are more comfortable than females in sharing their financial information, even though it is given anonymously.
"It is a male-dominated wealthy world," he says.
One of the key determinants of wealth is the family situation. "Being together and not divorced is a very strong success indicator because of the tremendous financial costs of separation over a lifetime," Turek says. "If you have been divorced, your net worth will only grow to three-quarters of those who are not."
PENNY PINCHERS
Inwood, whose company recently conducted a focus group with wealthy people, says some millionaires enjoy an extravagant lifestyle but most are modest in their spending. They tend not to spend that much on clothes and holidays, and are generally "tight" with money but will spend on quality things.
Turek says working overseas is also good for building wealth. "We have found that those that have spent time working overseas have a higher net worth than those who have not.
"You can think of professionals who have worked for a law firm in London or for an investment bank. Then there are those who have grown up in another culture and economy, and have come to Australia as a wealthy migrant."
It is not only those on particularly high incomes that have become wealthy.
Inwood uses a lower threshold for the definition of a high-net-worth individual than many other researchers. His definition is those with assets of more than $450,000 outside of their homes and superannuation. Recent research by brandmanagement shows that about half of them earn less than $100,000 a year.
They are those in their 50s and 60s, the baby boomer generation who have enjoyed rising house prices during the 1990s and 2000s and have good savings and investment habits. Home ownership has given them a springboard to borrow and invest.
Now that house prices are much higher than when the baby boomers first got onto the property ladder, it remains to be seen whether younger generations will fare as well.
SOURCE: John Collett - The Age
Mon, 28 July 2008
7 Cash Flow Steps to a Healthy Budget
The word budget can strike fear into even the strongest of people. If there is one thing very few people are ready for when they leave the safety of home for the first time it is dealing with money. There are not too many people who even know how to balance their chequebook after they open their first chequeing account. So creating a budget can be a scary proposition for anyone who isn't good at keeping track of their money.
But if we look at a budget in a different light then maybe it will be easier to live with what it is. And all it is is a cash flow plan. All a budget does is track where the money is flowing from and where it is flowing to. Cash flow; it's what makes the world go around.
Here are 7 steps you can use to plan your cash flow and before you know it you'll have built a budget. Start with a piece of paper and a pencil; you can save those fancy budgeting software packages for later.
1. Write down your monthly income. If you are a salaried worker this should be easy. If your income is not that steady then add up the past three months worth of income and average it by dividing by three. This will give you a good starting point.
2. Start writing down all your monthly expenses. Mortgage, rent, car payment, credit card payments, utilities, groceries, eating out, entertainment, and anything else you spend money on. For those expenses that fluctuate, such as groceries and gas, use the three month average method to get an accurate amount.
3. Here's the scary part for most people. Subtract the expenses from the income and see what's left. You will either have a positive cash flow or negative cash flow. Unfortunately in this day of increasing debt most people have a negative cash flow.
4. Once you have your monthly cash flow laid out in front of you you can start assigning your money to your expenses. As you make those payments throughout the month write them down to see how your spending lines up with what you have budgeted for that particular item.
5. If you have a negative cash flow then you can start looking at everything you have written down and find areas where your spending may not be in the best interest of you financial goals. As you do this you can free up money for more important financial considerations.
6. The first time you do a cash flow plan it probably won't work out quite right. It normally takes about three months to get everything working right while you figure out where your money has been going every month. Be patient with your budget and before long it will start working and you will regain control of your money.
7. Once you are comfortable with your written budget and you have better control of where your money goes and what it does then consider investing in some budget software such as Quicken. It can make your cash flow plan much easier and with the added features like retirement and tax planning it can give you a solid financial future.
By using these 7 cash flow steps you can begin your budget quickly and easily. Only by taking back control of your money can you improve your financial future for you and your family.
Written by:Andrew Bicknell
Tue, 05 August 2008
Choosing A Disability Income Protection Insurance Policy
People often make the mistake of shopping for an individual disability insurance policy the same way they would for a term life, or car insurance policy.
The concept seems simply enough, "If I get disabled, the insurance company should pay me." Therefore many shoppers spend time comparing quotes from different disability insurance carriers, and trying to find the lowest price.
The internet makes this task even easier when a shopper can simply search for disability insurance on Google, and request free quotes from the top ten search results.
According to statistics, 66% of the people who buy a disability insurance policy in this way will never have a problem because 66% will never become disabled for 90 days or longer before they retire.
However, 33% will become disabled before they reach the age of 65, and therefore will need to understand how the individual disability insurance policy purchased will work.
Buyer beware, not all disability insurance policies work the same way. In fact, no two policies are the same at all.
Definition of Total Disability
The first thing you need to compare is the definition of total disability. This will dictate exactly what the insurance company will pay out a total disability claim for.
While many carriers have slight variations on this definition, there are essentially three major definitions in use in the market today.
The most comprehensive is a Pure Own-Occupation definition of total disability. This definition will result in you being paid the total monthly benefit if a sickness or injury prevents you from being able to perform the material and substantial duties of your regular occupation, even if you are engaged in some other capacity.
The middle definition is a modified own-occupation or income replacement definition. The definition will begin the same way as a pure own-occupation definition does, except for the last sentence which will say so long as you are not engaged in any other occupation. This means the policy will pay you so long as you are not earning any earned income while on a claim.
The third major, and least comprehensive, is the gainful occupation definition which starts the same way as the previous two, however adds the language are unable to perform any occupation for which you are qualified by education, training, or experience. This means the insurance company could say that while you can not work in your current occupation they believe you could do something else, and therefore not pay your benefits.
As you can see, the three definitions are very different, and depending on your income and occupation, the price could be different as a result.
Residual or Partial Benefits
There are so many variations to residual or partial benefits that I could not possibly cover them all in this article.
If you take anything away from this article, make sure you understand when and how the residual or partial disability benefits pay in your individual disability insurance policy.
There are policies out there that allow professionals an unlimited recovery benefit as part of their residual benefits. This means that any fee for service professional would be paid under their residual disability rider for the entire benefit period until they financially recovered, not just until they physically recovered.
There are also policies that just pay a straight forward percentage of the monthly benefit depending on your percentage loss of income, and policies that pay a limited partial benefit.
The scope of benefits is extremely large, so make sure you understand the differences before selecting a policy on your own.
Inflation Protection
My feelings on inflation protection are mixed. It is something you always want to have if you are on an extended long term disability insurance claim, however if you only have a short term claim it is not going to help you.
If you are younger, I recommend purchasing this option every time because there is a longer period of time that inflation could affect your benefit amount while on claim.
If you are older, feel free to make your own decision. You can always buy it now, and drop it later on in life when inflation is not much of a threat to you.
I hope some of these tips help you make an educated decision when purchasing your own individual disability insurance policy.
It is not a contract where browsing by price will give you the best deal, it will only mean you bought the cheapest disability insurance policy out there.
Written by:Steven Crawford
Mon, 18 August 2008
Which Credit Card is Right for You
If you're in the market for a new credit card, there is a bewildering array of cards to choose from. There are even more incentive offers, so how can you decide on the card that is best for you? Here are some of the factors to consider.
What Kind Of Payer Are You?
The most crucial question is whether you are a person who clears the credit card every month or whether you always leave a balance on the credit card.
If you pay up at the end of every month, then you can go for a credit card that offers an incentive. If not, then you need to look at the annual percentage rate (APR) on the card. If you know what your typical credit card balance is, look at the illustrations given by card issuers to give a guide to how much you might have to repay over time.
Taking An Interest
Even with interest rates, you need to be careful. Although your new credit card may come with a 0% balance transfer rate, this is not the only rate to think about. Look at the rate on purchases or other transactions to see what you might be paying. And remember that any payments you make are likely to pay off the transferred balance first, while any new spending accrues interest.
Compare Credit Cards
Want to know which card is right for you? Why not check out our credit card comparison page to view a table comparing features and benefits of some of the most popular cards. Click here.
Hand in hand with the interest rate goes the interest-free period. This is the delay between spending money on the credit card and being charged interest. This can vary considerably depending on the card you choose. The interest free period can be as much as 56 days. And it's how you use it that counts. If you put major spending on the credit card after the statement date, you have a month till the next statement, and then a few weeks to make the payment. This can be a good way of managing cash flow.
Look At The Fees
There are three types of fees that count with credit cards. The first is the cash withdrawal fee. Many credit card issuers charge you for withdrawing cash at an ATM. These fees can be around 2% of the transaction. The percentage is even higher when withdrawing cash abroad. If you must use the credit card, then you're better off making one large withdrawal so you don't pay the minimum fee each time.
Getting Some Cash Back
Some credit cards offer annual cashback deals which are great for people who clear their balance every month, but not so good for others. If you don't clear your balance, the interest charged will wipe out any cashback gains. There are also reward points schemes that allow cardholders to earn money from their spending and spend it again with a variety of high street and online retailers.
Paying attention to these items will help you to choose a credit card that will match your financial situation.
Source:Amanda Cherry
Wed, 10 September 2008
Insuring against loss of income
An important part of stress-testing yourself involves imagining what would happen if your source of income were cut off. If you've done that and the answer scares you, there are various forms of insurance you can take out. For young people in particular, their biggest asset is their income-earning ability
Not all people have enough income protection insurance.
It's amazing that so many financial planners don't talk about it.
About 35 per cent of people insure themselves for income protection - and the vast majority of those people are self-employed.
Many people in full-time employment rely on an income protection through superannuation that they may not actually have.
A lot of people think they have protection through super when they don't.
Also, people don't understand the difference between total and permanent disability benefits and temporary disability benefits.
Take a moment to check your policy: the answer may surprise you.
Attitudes to income protection can be baffling.
If you don't have an income, then there are all the other things that are dependent on that - you can't pay the mortgage, you can't feed the family.
A lot of people could only go a month or two without income.
Ask the population if they have home and contents insurance and 90 per cent would say yes.
But they don't think they have to insure themselves, and they're the ones generating the money to pay for all this.
Then there's redundancy.
Many mortgage providers offer - and sometimes insist on mortgage insurance.
It's estimated that ten per cent of people have taken income protection with their mortgages over the long term.
But that's more historical than current; it used to be more like twenty per cent and now it's more like five.
People feel a lot more confident.
This sort of insurance means that if you lose your job, or your ability to earn income for another reason, the policy will continue to pay your mortgage.
Periods vary with policies but can be one to two years.
Some institutions require people to get mortgage insurance, particularly if they are gearing heavily in their mortgage.
If the loan to value ratio is above 80 per cent, for example, many lenders will require mortgage insurance ... with good reason for doing so: at the 80 per cent level, about 1 per cent of mortgages default. At the 90 per cent level the default figure climbs to 2.5 per cent.
Then there's the loss of income from an untenanted rental property.
Landlord insurance can cost as little as a couple of hundred dollars and covers, for example, defects in the building or damage caused by a tenant.
But if you can't rent it just because it's unpopular, you can't protect against that - it's a case of looking closely at the quality of the product in the first place.
http://www.financialservicesonline.com.au
Sun, 21 September 2008
To insure ... or not to insure
A question oft posed by many a business or household is whether insurance is really worth the expense. After all, the "It'll never happen to me" syndrome (unless we're talking about death) always seems to strike at the hip pocket.
And while taxation rarely forms part of this decision, the Tax Office will often be wanting their share of any compensation.
Where the compensation is to make good lost income it will be of a revenue nature and taxable to the recipient.
Where the compensation is for the loss of destruction of a capital asset the compensation will have the unmistakable character of capital.
In that case, it will only be taxable if caught by the capital gains tax ("CGT") provisions of the Tax Act.
Death Cover
Never a truer word has been uttered than by Benjamin Franklin when he said that there were only two certainties in life - death and taxes.
When he spoke these words we doubt he contemplated taxation on death.
Fortunately, the Tax Office also does not contemplate tax on death (in most circumstances).
Losses as a result of death are capital in nature and, therefore, payments to compensate for these losses are almost always non-taxable.
However, proceeds of death cover may be revenue in nature in limited circumstances, such as where they are intended to compensate a business for a temporary loss of income between the death of an employee and the employment of a suitable replacement.
Superannuation Death Benefits
Death benefits received from a Superannuation fund will not be taxable provided they are paid to a dependent of the deceased and do not result in the deceased exceeding their reasonable benefit limit.
Where death benefits from a Superannuation fund are paid to a trust, or to the deceased's estate, they will be taxable under the eligible termination payment provisions. In this case, the commissioner has the discretion to treat the benefit as paid to a dependent and he will usually do so if he is satisfied that the money will ultimately be paid to dependents.
Accident and Disability
As a general rule, periodical payments made in substitution for lost wages, or which otherwise compensate for loss of income, are themselves of an income nature and taxable.
On the other hand, lump sum compensation for the loss of earning capacity generally is a capital receipt, as the ability or capacity to earn income is a capital asset.
However, the answer may not always be so clear.
Between these two extremes lie a range of possible outcomes.
The proceeds of a personal disability insurance policy, received as a series of periodic payments, are assessable where the purpose of the policy is to provide a periodic indemnity against income loss arising from the inability to earn.
This is true even when there is no actual loss of earnings.
In circumstances where an accident or disability policy is taken out to provide compensation for the loss of an earning capacity and the recipient receives a lump sum payment, such a payment should not be assessable income to the recipient.
However, if the compensation is received as periodic payments then that, together with other factors, may change what would otherwise be capital amounts into income.
Trauma Policies
Trauma policies usually pay out a specified amount in a lump sum form. In such cases the pay-out is of a capital nature.
Where the compensation is in a different form, the taxation treatment needs to be determined having regard to the factors discussed above.
CGT
The CGT provisions do not generally apply when there is a pay-out under a life insurance policy.
However, they do apply where the recipient is not the original beneficial owner and acquires the rights under the policy for consideration.
If the compensation is of a capital nature, it will be necessary to consider the CGT provisions.
Compensation or damages received for any wrong, injury or illness suffered personally by the taxpayer or relative is also specifically exempt from CGT.
Death, Disability and Taxes
An event of death or disability is no time to discover that the Tax Office will be taking a hefty slice of any insurance proceeds.
There is no time like the present to consider the structure and nature of any insurance policies entered into, to ensure that the after tax proceeds of the policy are sufficient for your needs.
By Financial Services Online
Mon, 29 September 2008
Professional Indemnity Insurance: A Safety Cover For Professionals
Professional indemnity insurance is an instrument that provides an essential cover of financial protection to all practicing professionals and advisors. In the event a client experiences a financial loss due to an alleged error, negligence or omission, the protection cover from professional indemnity insurance pays for the damages caused or for any kind of defending claims. Even the most professional and expert can eliminate the risk from his or her life. Likely, a professional may fall for situations that may create an embarrassing situation and create a financial catastrophe. Evidently, it is important to protect interests by taking adequate insurance protection to deal with abrupt situations that may claim your financial assets.
It is Important!
Having indemnity insurance is absolutely important in todays litigious world. For any kind of professional businesses and services, indemnity insurance can serve requirements and provide to practice in a tension-free consumer market. Besides paying the claim amount, a professional insurance can help professionals to get all legal costs. Whether you are an accountant, an architect, a doctor, a lawyer, a computer consultant, a journalist or anybody else, professional indemnity can be taken by all to protect their interests. Without adequate insurance policy, professionals work in a dangerous situation where they can be accused anytime.
Not all, professionals are aware of the benefits of professional indemnity insurance. Unfortunately, many of them consider it as an overhead cost as they cant see the future work situations. They consider it unnecessary and expansive. However, with the experience, professionals are realizing that professional indemnity can avert danger to a great extent. Also, to provide an economical solution for professionals, insurance companies are providing low-cost policies that can provide same benefits to all professionals.
So, if you are a practicing professional, getting a good insurance cover would be a mandatory decision for you.
By: Editor22
Mon, 06 October 2008
Professional Indemnity Insurance: A Safety Cover For Professionals
Professional indemnity insurance is an instrument that provides an essential cover of financial protection to all practicing professionals and advisors. In the event a client experiences a financial loss due to an alleged error, negligence or omission, the protection cover from professional indemnity insurance pays for the damages caused or for any kind of defending claims. Even the most professional and expert can eliminate the risk from his or her life. Likely, a professional may fall for situations that may create an embarrassing situation and create a financial catastrophe. Evidently, it is important to protect interests by taking adequate insurance protection to deal with abrupt situations that may claim your financial assets.
It is Important!
Having indemnity insurance is absolutely important in todays litigious world. For any kind of professional businesses and services, indemnity insurance can serve requirements and provide to practice in a tension-free consumer market. Besides paying the claim amount, a professional insurance can help professionals to get all legal costs. Whether you are an accountant, an architect, a doctor, a lawyer, a computer consultant, a journalist or anybody else, professional indemnity can be taken by all to protect their interests. Without adequate insurance policy, professionals work in a dangerous situation where they can be accused anytime.
Not all, professionals are aware of the benefits of professional indemnity insurance. Unfortunately, many of them consider it as an overhead cost as they cant see the future work situations. They consider it unnecessary and expansive. However, with the experience, professionals are realizing that professional indemnity can avert danger to a great extent. Also, to provide an economical solution for professionals, insurance companies are providing low-cost policies that can provide same benefits to all professionals.
So, if you are a practicing professional, getting a good insurance cover would be a mandatory decision for you.
By: Editor22
Article Directory: http://www.articledashboard.com
Thu, 16 October 2008
Income Protection Insurance
If sudden illness or injury from an accident happens to you as an employee it may mean that you can not earn a living for a period of time. If you own a company and it happens to a member of your staff, it can cause plenty of havoc and anxiety at an organization, even in the most stable and established company. Income protection insurance cover for employees.
Many people are too busy earning a living, so much so that they hardly have the time to stop and think of the possible dangers, of what would happen to them and their families and dependants if they were not able to work for any reason.
They continue with life oblivious of the dangers that they expose themselves to by not taking any precautionary measures. Precautionary measures are mainly in the form of insurance cover. In particular we are talking about Income protection insurance here.
Group income protection insurance is a cover that offers both the employer and the employee protection against sudden illness or injury on the employee that would incapacitate them or make him or her unable to work. Group Income protection covers a portion of an employee's salary should illness or injuries prevent eligible employees from working.
Employers benefit by employee income protection insurance.
Although both the employer and the employee suffer serious consequences in the event of the employee being unable to work for extended periods of time, most people do not realize just how serious it can be to the employer as well. This is precisely the reason why Income Protection Insurance not only makes sense but provides a number of key advantages to both parties who come under the umbrella of such a cover.
Any sole family bread winner or income earner is bound to feel much more comfortable and secure about their future and that of their family after they have taken out some form of income protection insurance. It really does not matter how basic an insurance policy somebody takes out, as long as it takes care of income loss.
Source: Finance Unlimited
Thu, 23 October 2008
Professional Indemnity Insurance Coverage
Professional indemnity insurance supports you in paying the compensation to a third party, who may have suffered injury, loss or damage through any breach of duty, causing a quantifiable financial loss. Professional indemnity insurance, commonly known as pi insurance, is a financial instrument that indemnifies professionals against any legal liabilities, such as injury, loss or damage caused due to their professional negligence.
Broadly, there are three types of Professional indemnity insurance, namely breach of duty, civil liability, and negligent act, error or omission.
Negligent act, error or omission- is the narrowest form of cover that indemnifies the pi insurance holder against loss incurred only due to their negligent act, error or omission in carrying out the business of the policyholder. Breach of duty is a typical pi insurance that provides indemnity to the insured against the loss arising from any claim for breach of duty made to the insurers during the policy period. Civil liability is another form of Professional indemnity insurance that provides indemnity for any kind of civil liability. This includes breach of contract, libel, and slander
Professional indemnity insurance actually covers many aspects. The followings are the detailed list of the same.
Usually the duration of the policy is one year.
Premiums represent a particular part of a firms running costs
Professional indemnity insurance only covers the firm, not the interests of their client or any third parties.
PI insurance is written on a claims made basis.
The policy pays only after the liability of the claimant is established.
In the event of a claim being made, the policy also covers the cost of legal defense
PI insurance saves the policyholder against any unfortunate situation of facing a legal action or claim arising out of the services he has provided as consultation. It is necessary to build up an understanding of your needs and risks before looking for professional indemnity insurance cover. Professional indemnity insurance is a powerful tool that saves you against any sort of uncertainties in your business that ends up with financial compensations. Understand your business needs and requirements and adopt Professional indemnity insurance coverage to deal with financial uncertainties.
By: Editor22
Article Directory: http://www.articledashboard.com
Tue, 28 October 2008
The Funnier Side of Insurance
The statements below are taken from actual insurance accident claims forms. They are real, true (you can't make up this kind of stuff). Read 'em and laugh and be glad it wasn't you.
The guy was all over the road. I had to swerve a number of times before I hit him.
A pedestrian hit me and went under my car.
I collided with a stationary truck coming the other way.
A truck backed through my windshield into my wife's face.
The other car collided with mine without giving warning of its intention.
My car was legally parked as it backed into another vehicle.
I started to slow down but the traffic was more stationary than I thought.
The accident occurred when I was attempting to bring my car out of a skid by steering it into the other vehicle.
I was unable to stop in time and my car crashed into the other vehicle. The driver and passengers then left immediately for a vacation with injuries.
The gentleman behind me struck me on the backside. He then went to rest in a bush with just his rear end showing.
The car in front of me stopped for a yellow light, so I had no choice but to hit him.
Coming home I drove into the wrong house and collided with a tree I don't have.
I told the police that I was not injured, but on removing my hat found that I had a fractured skull.
I pulled away from the side of the road, glanced at my mother-in-law and headed over the embankment.
I thought my window was down, but I found it was up when I put my head through it.
As I approached an intersection a sign suddenly appeared in a place where no stop sign had ever appeared before. I was unable to stop in time to avoid the accident.
In an attempt to kill a fly, I drove into a telephone pole.
I saw two kangaroos having it off in the middle of the road. So I hit them, which caused me to ejaculate through the sunroof.
I was thrown from my car as it left the road. I was later found in a ditch by some stray cows.
I pulled in to the side of the road because there was smoke coming from under the hood. I realized there was a fire in the engine, so I took my dog and smothered it with a blanket.
No one was to blame for the accident but it would never have happened if the other driver had been alert.
I had been shopping for plants all day and was on my way home. As I reached an intersection a hedge sprang up, obscuring my vision and I did not see the other car.
The indirect cause of the accident was a little guy in a small car with a big mouth.
I was on the way to the doctor with rear end trouble when my universal joint gave way causing me to have an accident.
On approach to the traffic lights the car in front suddenly broke.
No witnesses would admit having seen the mishap until after it happened.
I had been learning to drive with power steering. I turned the wheel to what I thought was enough and found myself in a different direction going the opposite way.
The accident happened when the right front door of a car came round the corner without giving a signal.
I had been driving for forty years when I fell asleep at the wheel and had an accident.
An invisible car came out of nowhere, struck my car and vanished.
Source:Frank Hills
The accident happened because I had one eye on the truck in front, one eye on the pedestrian, and the other on the car behind.
Tue, 04 November 2008
Disability Income Insurance - Protection In Troubling Times
Nobody likes to think about being disabled. Unfortunately when accidents strike they will quickly change your financial outlook. What disability income insurance options do you have if you find yourself disabled, temporarily or otherwise? In other words do you have a plan of action if you don't have, or plan to take, disability income insurance?
There Are 2 Types Of Disability Income Insurance Contracts:
* Non-cancellable: premiums are guaranteed level for the life of the contract unless the benefits are increased.
* Guaranteed renewable: Company reserves the right to increase the disability income insurance premiums for everybody, should the number of claims in a particular class begin to rise.
Your Disability Income Insurance Concerns:
* Occupation: The dangers of your job are a factor companies weigh to see the chances of you getting injured.
* Compensation: How much are you looking for to cover your expenses, and is it less than 70% of your present gross salary?
* Medical History: Your current health and what medical history your family has, will also affect how the life disability income insurance carriers will see you.
Other factors that go into assessing your situation are your gender, age and province or state of residence.
You also have the option of riders. Residual and partial riders are available to you if your situation changes and you are returning to work in a different job and experience a loss of income. Or if you return to work as a part time employee, but in the same job.
Plan Disability Income Insurance For Potential Accidents Or Sickness
Although no one likes to talk about getting hurt or such, the benefits of a disability insurance policy greatly help during times of crisis. Investing in a policy helps strengthen your overall financial plan or at least puts a floor underneath it. Get together soon with an insurance broker and discuss how your personal situation can benefit from disability income insurance.
By: Ivon T. Hughes -
Sat, 08 November 2008
The Ins And Outs Of Public Liability Insurance
With the compensation culture increasing around the world, having public liability insurance is becoming more and more important. If you dont have public liability insurance included in your current building insurance, then now is the time to look at getting better cover. Here is some advice about why you need public liability insurance, and what to look out for:
What is public liability insurance?
Public liability insurance is an insurance policy that protects you from claims that other people might make against you in the event of an accident. If someone damages their property or injures themselves in or around your property or business then public liability insurance will cover you for any compensation claims that might occur. Cover usually ranges from £250,000 up to £1 million.
What are you covered against?
Public liability insurance will insure you against accidents or loss that others might suffer in or around your home or business premises. You are covered against claims from trespassers, as well as injury that might occur to anyone from falling objects or people carrying out repairs. If an accident occurs on your property and someone claims against you, your insurance will help you pay any compensation.
Included in your contents insurance
Some contents or property insurance policies have in-built public liability insurance. You should check with your insurer whether this is the case, and what level of cover you have. Even if the insurance is included, you need to make sure that you are adequately covered for any accidents that might occur.
Premiums
The premiums that you pay depend on the level of coverage you want. If you are simply covered your home, then premiums are likely to be lower than if you are covering a business. However, premiums are relatively cheap for the level of cover that you are afforded, and it is therefore essential for anyone running a business. With compensation claims on the rise it is also a good idea for homeowners to have adequate public liability insurance.
Dangers of not having insurance
If you dont have public liability insurance then you could end up with a massive compensation bill. If you are at fault or negligent and someone makes a claim against you, then you will have to pay the full level of compensation if uninsured. A claim might range from a few hundred pounds to a few million for more serious accidents. If you cannot pay the claim amount then you could lose your home and other possessions in order to pay for the claim.
Requirements
Some businesses are required to have public liability insurance, such as horse riding schools. Any type of business that has some obvious risk to the public will be required to have public liability insurance. Also, many businesses and customers will want proof that you have public liability insurance before they work with you, in case anything should happen and a claim is made.
Source:By Expert Author: Peter J Kenny
Tue, 25 November 2008
Insurance Claim? Your Insurance Company Wants To Keep Your Money - You Can Fight Back
It's called a float,. Money is collected from policyholders in the form of premiums. Your premiums are then invested, floated, by the insurance company for its own profit. But at what point is there a conflict between the profit motives of the insurance company and the welfare of its policyholders?
While insurance companies profess to maximize profits by investing your premium dollars, the process is flawed. Diverse market situations create a volatile environment for investments. The inherent risks of investment can cut heavily into the profitability of an insurance company. While companies cannot control the volatility of interest income, they can control the payout on claims.
Manipulation of claims payouts has become ingrained in the corporate insurance community with such success that routine claims handling cannot be distinguished from bottom-line claims handling. The effect is to create serious insurance claim problems for unsuspecting policyholders.
In order of success, companies can enhance their profitability by utilizing three general tactics.
Lowballing, or undervaluing your claim is the most profitable and the most common method used to manipulate claims payments.
Consider that this approach is utilized in virtually all insurance claims. Claims settlements are actually claims negotiations. Recognize that the process occurs on a very unlevel playing field.
(1) Assume that your claim is undervalued. (2) Conduct your own independent research regarding the value of your loss. (3) Recognize that you will need to fight to get past the "range" of value offered in your claim. Adjusters are taught to negotiate for less than a claim is worth. Management provides adjusters with authority ranges, and they are expected to begin their negotiations at the bottom of that range. If you question the lowest offer, the theory is that you will accept the next offer within the adjuster's range.
Wrongful claims denial is the second most profitable tactic.
Unscrupulous insurance companies recognize the enormous profitability potential of claim denials. If you do challenge the denial, they can respond with a lowball offer. If you do not challenge the denial, they have realized pure profit.
If your claim has been unjustly denied, you must resist. Understand that insurance companies are bound to find ways to pay claims, not to search for means to deny them.
(1) Insist on a written recitation of the policy provisions utilized as a basis for the denial. (2) Adhere to any appeal processes specified in your policy. (3) File a complaint with your state insurance regulator. While state agencies cannot force your company to pay your claim, the complaint can serve to indirectly hasten a successful conclusion. (4) Seriously consider a legal opinion.
Claims delays represent the third most profitable tactic used to separate you from your money.
Paramount in the delay tactic is the belief that by forcing you to wait for settlement of your claim, you will eventually give up. Giving up translates to less money for the claim payment and more money for the insurance company. While there are a multitude of common delay tactics, one of the most common methods stems from the company's attempt to impose on you, biased interpretations of your policy. To combat this, you must read and strive to understand your insurance policy. Approach your agent for clarification or conduct independent research.
Insurance companies have a responsibility to investigate all claims. The key is that the investigation must be reasonable and timely.
There are other actions you should take. (1) Communicate with your adjuster. Insist on a time frame for an update on your claim and follow up with the adjuster when the time is met. (2) Insist on a full account of the reasons for the delay. If an explanation is not provided, follow up in writing. (3) Offer to provide any additional data which would prove helpful to the positive resolution of your claim.
You are not entitled to receive more than you are owed - but your company is bound to treat you fairly and to return you to the condition you enjoyed prior to your loss. Anything less is unacceptable. The key to your success depends on your ability to arm yourself with knowledge of your rights, recognition of the tactics used against you, and your refusal to accept that the insurance company holds all the power.
By: Jane Pytel
Wed, 10 December 2008
Demystifying Insurance
Q: Why do people who are overweight pay more for life insurance than thin people?
A: While it is true that a few extra pounds dont necessarily mean youre unhealthy, for the most part being overweight does increase your risk of illness and death. Obesity definitely makes you riskier to insure. That risk shows up in the size of your premium.
Being 50 or 60 pounds overweight can increase your premium by 50% over what you would pay at a normal weight for the same policy, and thats if you have no health problems. Add in any health issues such as cholesterol problems and your premium will likely be higher still. If you are having other problems as well, such as high blood pressure or pre-diabetes symptoms, you may find it difficult to get an affordable life insurance policy.
There is good news, though. If you lose the excess weight, you will often be able to shed problems such as high blood pressure along with it. Then when your weight and health are better, contact your insurance company for a reduction in premium. Dont wait until youve lost all the weight, either. You can continue to request premium reductions as you work your way to a normal weight.
Source: Insurance Compared.com
Sat, 27 December 2008
The Insurance Claim Game
If you've never had to file an insurance claim, consider yourself lucky - in more ways than one. While it's terrific that you haven't suffered a loss significant enough to file a claim, you're also lucky not to have had to suffer through the insurance claim game.
How do you play the insurance claim game? Let's just say that there's more involved than tossing the dice, crossing Go and collecting $200. While the object of most games is to win, this game starts with a loss. It doesn't matter what the loss is; it could be a crunched car, burned down house, theft of valuables, water damaged carpets and cabinetry, a blown off roof, or any number of damages. Whatever the loss, that's the hand you're dealt.
Each different loss type has its own related hassles. This makes the game more challenging! Let's say that your house has been flooded thanks to a burst pipe in the walls. Not only do you have a loss, you have a major mess and the potential for further damage (such as mold growth if the home is not dried out within 72 hours). The clock is ticking. Isn't this fun?
But we're just getting started. You also have safety hazards to deal with, emergency repairs to make, insurance paperwork to file, water damage professionals to hire, and temporary lodging to find.
Now, your opponent takes a turn. Who's the other player in this game? Your insurance company and, yes, they are playing against you. At stake is potentially tens of thousands of dollars and this isn't Monopoly money we're talking about. This is real U.S. Treasury currency.
You've paid your premiums and you are entitled to a fair settlement. However, the insurance company is a business that must minimize losses in order to be profitable. This includes minimizing YOUR loss.
Insurance companies often have contracts with "preferred" vendors who have agreed to pre-determined rates in order to earn their business. One of the first moves any insurance company makes is to steer you to their preferred vendors.
Your turn. While using the insurance company's recommended contractor may be fine if you don't have a preference and are unsure of whom to call for repairs, you are under no obligation to follow their recommendation. Most states allow "customer choice," meaning you can pick your own contractor for repairs; in this case, a water damage restoration company.
Your opponent's turn. Your insurance company is on the offense and will send an adjuster to your home to estimate the damage. This adjuster is friendly and likeable. However, he is a company representative that needs to minimize losses. He may overlook those warped baseboards or suggest a coat of paint rather than complete drywall removal. In addition, he won't necessarily prompt you to list all damaged personal belongings.
Your turn. Because your opponent is on the offense, you must put up a strong defense. Start by having either your contractor or a public insurance adjuster (an insurance adjuster that represents you) present when the adjuster arrives. By having a professional on your side, less obvious damage won't get overlooked or underestimated. In addition, have a complete inventory on hand documenting ALL damaged items, big and small. This ensures that nothing is overlooked.
The game continues with your opponent throwing mountains of paperwork your way, claim denials, low-ball settlement offers, unnecessary delays, and other tricks from their play book. If you play your cards right, you'll work out a fair settlement offer, hire a reputable contractor for repairs, replace your damaged items, and restore your home to its previous condition.
If you must play the insurance claim game, remember that your insurance company has a huge home field advantage because the company plays the insurance claim game day in, day out. You only play it a few times in your lifetime - if you're lucky.
Written by:Mark Decherd
Thu, 22 January 2009
Public Liability Insurance
What the insurance covers
This type of insurance covers any awards given to a member of the public because of an injury or damage to their property caused by you or your business. It also covers any related legal fees, costs and expenses. Premiums depend on the type of business you run, your turnover and the number of employees you have.
How much cover should you take out?
Most businesses have cover between $5 million and $20 million, but we recommend that the minimum cover should be set at $10 million as claims for injuries can take many years to settle.
Talk to a professional
There are many conditions and exclusions that can be applied to public liability policies. It is therefore important that you discuss with your insurance broker any that are applicable to your policy.
Products' Liability
If you supply a product and something goes wrong with it, claimants are likely to try to claim from you first, even if you did not manufacture the product. The nature of risk ie. the likelihood of a claim and the premium, are affected by who the product is sold to, how and where it is used and any warnings or labels that are provided.
The products' liability insurance that you buy covers you against any compensation awarded as a result of damage or injury caused by your product.
Product liability covers you against unforeseen circumstances. If you simply make an inferior product, then you may not be able to make a claim and bad workmanship is not covered.
In order to reduce your premiums you should put in place quality control measures. This not only ensures lower premiums, but also reduces the risk of compensation claims and the loss of your reputation in the marketplace.
Source: www.liability.com.au
Tue, 17 March 2009
Disasters payouts push premiums
THE head of the world's most influential insurance market said commercial premiums were likely to rise over the next year as underwriters looked to replenish capital following one of the worst years for payouts linked to natural disasters...
The chief executive of Lloyd's of London, Richard Ward, said 2008 was emerging as one of the most expensive years for insurers, with payouts linked to natural disasters such as floods, cyclones and earthquakes across the world coming in at around $US45 billion ($A68.3 billion), double the previous year.
At the same time, insurers here and around the world have been hit with large writedowns on the value of their investment portfolios, which has further eroded capital.
Still, Mr Ward, who has headed the multibillion-dollar Lloyd's market for nearly three years, said an expected single-digit percentage rise in premiums was still a measured response to market shocks.
"In 2008, we've had the second worst year for natural catastrophe payouts that caused significant losses for the insurance market," he said.
"If you then combine that with the economic environment we find ourselves in, that will also lead to a hardening of the market."
Lloyd's writes about $1.2 billion of insurance premiums in Australia annually on behalf of syndicates. At the same time, some of the re-insurance arrangements held by key domestic insurers IAG and Suncorp Metway are backed by Lloyd's syndicates.
"To characterise (rate rises) as a single-digit rise is probably appropriate we're not seeing a step change in rates, which is good," Mr Ward said.
Australian insurers have warned that premiums could rise by as much as 10 per cent across some categories of personal insurance, outstripping rises in commercial property and liability insurance.
With insurance losses linked to last month's devastating bushfires in Victoria estimated to exceed $1.12 billion, analysts have said this is likely to accelerate rate rises already in train.
"Clearly, when you have a natural disaster, the market will respond with an increase in rates," Mr Ward said.
While the global banking system has come close to paralysis after being weighed down with deep losses, Mr Ward noted that Lloyd's and other large insurers other than US giant AIG have been able to escape the worst of the downturn.
The key to this had been insurers keeping the focus on insurance.
"AIG's problems have been because it was involved in financial products, which is not insurance," he said.
SOURCE: Eric Johnston - The Age
Fri, 05 June 2009
Insurance for the Tradesman
Tradesman's Insurance Description
Tradesmen are exposed to 2 areas.
1. Public & Products Liability Insurance
2. Loss of tools whilst the vehicle is parked or in transit.
Insurers recognise this and there are Tradesman's Insurance packages that we can put together to cover this problem. Several companies do Tradesmans Public & Products Liability Insurance. Finding the right price for the trade is our problem, but this is what we are good at and what you are paying us for.
Your Tools of Trade - We can organise cover whilst the vehicle is in transit, or parked in the street, should it be broken into, or worst still, stolen. We can also cover the tools that you leave at home in the garage, and even the truck too, if you wish.
Pitfalls of Tradesman's Insurance Policies
Liability Insurance always has the problem of disclosure ... telling the insurer exactly what you do. If that is covered, it is smooth sailing, and as your broker we lodge any claims, which enables you to carry on with your business.
Tools of trade must be nominated items with individual values, commonly limited to about $500 per item unless specified. Most policies have a NIL excess and new-for-old up to 5 years. Extending this to cover tools at home is easy. The same conditions apply to tools in transit. All vehicles or garages must be locked when not attended.
Wed, 29 July 2009
Professional Indemnity Insurance
At your place of business you want everything to go smoothly. You want to your clients to get the most out of your company and in return you want their return custom. Occasionally there are situations that arise where a client of yours may hold you liable for a piece of advice you have given that have caused them financial loss. Professional indemnity insurance protects you and your company against instances like that.
Fri, 20 November 2009
Professional Indemnity- Who needs it?
Professional Indemnity Insurance effectively protects a company and its individuals from any advice they may have given a client that could have led to financial loss. In a not so perfect world the chances of this happening are fairly reasonable so this type of policy will be usefull to many professionals.
For example a Financial Advisor would find it very important to have this type of insurance. People such as acountants, private bankers, web designers, marketers, medical professionals and more, all legally require professional indemnity insurance to ensure that they are protected and are not bankrupted by any legal action caused by their advice.
As professional indemnity claims may arise from any situation where a client loses money as a result of a professional mistake, professional indemnity insurance is also recommended to a whole number of other industries. Architects, engineers, graphic designers or anyone that takes a fee for service and delivers a product that a client relies upon is a candidate for professional indemnity insurance.
You can apply online for a free quote. The process is fast and simple and you can be assured of getting the best possible deal Australias leading insurance providers.
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