Q. How much liability insurance should I have?
A. Enough to protect your assets, both personal and business since any asset you own is at risk. We usually recommend at least $1 million in coverage.
Q. Must I purchase workers compensation insurance if I have less than 3 employees?
A. Although the Virginia code does not require you to have worker’s compensation insurance if you have less than 3 employees, most general contractors and many other business require you to have “WC” to do business with them. This is because if one of your employees gets hurt while working for them, their “WC” policy is liable for the claim. In addition, their “WC” insurance carrier will charge them for anyone that does not have “WC” coverage.
Q. What value should I insure my property for?
A. We require that any property be insured for the replacement cost at current construction costs. Although many banks only require coverage for the amount of their loan, this could leave you with a reconstruction shortage. Also, many property policies require at least 80% of replacement cost coverage for a claim to be paid fully. If you have a policy like this and only insurance for 50% of value, any partial claims would be paid at 50% of the claim less your policy deductible.
Q. How much life insurance should I have?
A. Generally, you should have enough liquid assets (stocks, cash, retirement plan assets, and life insurance) to provide the cash your family needs to remain in their own world at 5% of assets. This allows for an increasing amount of money as hopefully their assets grow at more than 5%.
Q. What should I do if I leave a company and I have a vested retirement plan?
A. Generally, we recommend that you “roll” these assets to an IRA account. You then have control of these assets. This rollover must be done in a specific way to avoid current taxation.
Call us to speak to one of our specialists in any area of insurance or investments. We look forward to developing a professional relationship with you and your company.