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INSURANCE

MITIGATE THE RISK OF UNEXPECTED EVENTS

WHAT IS INSURANCE?

Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.

Insurance policies are used to hedge against the risk of financial losses, both big and small, that may result from damage to the insured or her property, or from liability for damage or injury caused to a third party.

 

KEY TAKEAWAYS

 

  • Insurance is a contract (policy) in which an insurer indemnifies another against losses from specific contingencies or perils. 

  • There many types of insurance policies. Life, health, homeowners, and auto are the most common forms of insurance.

  • The core components that make up most insurance policies are the deductible, policy limit, and premium.

How Insurance Works

There is a multitude of different types of insurance policies available, and virtually any individual or business can find an insurance company willing to insure them—for a price. The most common types of personal insurance policies are auto, health, homeowners, and life. Most individuals in the United States have at least one of these types of insurance, and car insurance is required by law.

Businesses require special types of insurance policies that insure against specific types of risks faced by a particular business.

 

For example, a fast-food restaurant needs a policy that covers damage or injury that occurs as a result of cooking with a deep fryer. An auto dealer is not subject to this type of risk but does require coverage for damage or injury that could occur during test drives.

IMPORTANT: In order to select the best policy for you or your family, it is important to pay attention to the three critical components of most insurance policies—the deductible, premium, and policy limit

There are also insurance policies available for very specific needs, such as kidnap and ransom (K&R), medical malpractice, and professional liability insurance, also known as errors and omissions insurance.

Insurance Policy Components

When choosing a policy, it is important to understand how insurance works.

A firm understanding of these concepts goes a long way in helping you choose the policy that best suits your needs. For instance, whole life insurance may or may not be the right type of life insurance for you. There are three components of any type of insurance (premium, policy limit, and deductible) that are crucial.

Premium

 

A policy's premium is its price, typically expressed as a monthly cost. The premium is determined by the insurer based on your or your business's risk profile, which may include creditworthiness.

For example, if you own several expensive automobiles and have a history of reckless driving, you will likely pay more for an auto policy than someone with a single mid-range sedan and a perfect driving record. However, different insurers may charge different premiums for similar policies. So finding the price that is right for you requires some legwork.

Policy Limit

 

The policy limit is the maximum amount an insurer will pay under a policy for a covered loss. Maximums may be set per period (e.g., annual or policy term), per loss or injury, or over the life of the policy, also known as the lifetime maximum.

Typically, higher limits carry higher premiums. For a general life insurance policy, the maximum amount the insurer will pay is referred to as the face value, which is the amount paid to a beneficiary upon the death of the insured.

Deductible

 

The deductible is a specific amount the policy-holder must pay out-of-pocket before the insurer pays a claim. Deductibles serve as deterrents to large volumes of small and insignificant claims.

Deductibles can apply per-policy or per-claim depending on the insurer and the type of policy. Policies with very high deductibles are typically less expensive because the high out-of-pocket expense generally results in fewer small claims.

Special Considerations

With regard to health insurance, people who have chronic health issues or need regular medical attention should look for policies with lower deductibles.

Though the annual premium is higher than a comparable policy with a higher deductible, less expensive access to medical care throughout the year may be worth the trade-off.

OUR INSURANCE SOLUTIONS

 

Transport Cargo

Cost, insurance, and freight (CIF) is an expense paid by a seller to cover the costs, insurance, and freight of a buyer's order while it is in transit. The goods are exported to a port named in the sales contract. Until the goods are fully loaded onto a transport ship, the seller bears the costs of any loss or damage to the product. Further, if the product requires additional customs duties, export paperwork, or inspections or rerouting, the seller must cover these expenses. Once the freight loads, the buyer becomes responsible for all other costs. CIF is similar but not the same as carriage and insurance paid to (CIP).

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General Liability

Commercial general liability (CGL) is a type of insurance policy that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’s operations, products, or injuries that occur on the business’s premises. Commercial general liability is considered comprehensive business insurance, though it does not cover all risks a business may face.

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Occupation and Workers Compensation

Supply chain finance is a solution that improves cash flow by allowing businesses to lengthen their payment terms to their suppliers while providing the option for small,  medium and large suppliers to get paid early.

This results in a win-win situation for the buyer and supplier. The buyer optimizes Working Capital, and the supplier generates additional operating cash flow, thus minimizing risk across the supply chain.

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Commercial Autotransport

Designed specifically for equipment manufacturing companies and dealers.

 

Manufacturers: Increase sales and improve cash flow while also providing your dealers with a quick and easy option to finance inventory purchases.  Our Floor Plan solution offers OEMs a competitive advantage in the market regardless of current conditions.

Dealers: Acquire more inventory and increase sales while freeing up cash flow with Floor Plan Financing. 

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Property and Casualty

Designed specifically for equipment manufacturing companies and dealers.

 

Manufacturers: Increase sales and improve cash flow while also providing your dealers with a quick and easy option to finance inventory purchases.  Our Floor Plan solution offers OEMs a competitive advantage in the market regardless of current conditions.

Dealers: Acquire more inventory and increase sales while freeing up cash flow with Floor Plan Financing. 

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Industrial and Operator Error

Designed specifically for equipment manufacturing companies and dealers.

 

Manufacturers: Increase sales and improve cash flow while also providing your dealers with a quick and easy option to finance inventory purchases.  Our Floor Plan solution offers OEMs a competitive advantage in the market regardless of current conditions.

Dealers: Acquire more inventory and increase sales while freeing up cash flow with Floor Plan Financing. 

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