Article Titles

What insurance do I need when I rent a car?

Is your business eligible for a small business health care tax credit?

What you need to know if you are selling or buying a business.

Articles

What insurance do I need when I rent a car?

March 14, 2011

With the spring and summer travel season rapidly approaching, we receive phone calls from clients asking for guidance through the world of rental cars.  Unless you are a regular business traveler, this can be a very confusing and sometimes very costly concern.  We welcome your call, as everyone’s circumstances are different, and there is not one correct answer that applies to everyone.  With that in mind, the following are some guidelines:

• First the easy part.  Most insurance policies, both Personal and Commercial, will cover your Liability exposures while driving a rented vehicle.  Therefore, you do not usually need to purchase Liability Insurance through the rental car company.
• Coverage for the vehicle itself (Physical Damage).  Here it gets a little more complicated.  There are essentially four sources of coverage for the vehicle itself:

1. It is very expensive.
2. Your Personal Auto policy may already provide the coverage.
3. Your Personal Umbrella policy may provide the coverage.
4. Your credit card may provide the coverage.
5. The rental car company CDW usually doesn’t apply if you have had any alcoholic beverages to drink.
6. Coverage from the rental agency may not apply if you drive the vehicle outside the state where you rented the vehicle unless you have requested permission to do so.
7. The rental car company coverage may not apply when a non-listed person is driving--sometimes even your spouse.
8. The rental car company policy may not cover damage caused by careless driving, and sometimes this term is not defined.
9. You might find that the coverage provided by the rental car company applies excess over your Personal Auto Insurance, requiring you to prove that your Personal Auto policy coverage does not apply before this coverage (again, which was rather expensive) will pay for the damage.
10.   There is oftentimes an exclusion in the coverage from the rental car company if you drive the vehicle off paved roads.  An unexpected dirt or gravel country road could cause you problems.

• If you bring the car back damaged and have not purchased coverage from the rental car company, there will inevitably be a time delay in filling out the necessary paperwork, reports, etc., with the rental car company.  This could cause an interruption in your travel schedule.
• The odds of having an accident while driving in a strange city in a vehicle you are not familiar with definitely increase.
• If you have had claim activity on your Personal Automobile Insurance policy and you are in danger of a rate increase or cancellation as a result, purchasing the coverage through the rental car company may be a good option.

Guest article by Suttner Accounting
Chilton, WI
February 21, 2011 

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law.  There are several provisions in the Act that take effect over a four-year period beginning in 2010.  Here we are focusing on one of those provisions: the Tax Credit for Employee Health Insurance Expenses of Small Employers.

This potentially lucrative credit could be as much as 35% of the cost of premiums paid by the company.  Three primary factors come into play in determining whether a business can take advantage of this credit:

1. The business must have fewer than 25 full-time equivalent employees.
2. The average annual wage of the eligible employee group must be less than $50,000.
3. The employer must maintain an arrangement under which the employer pays premiums
     for each employee enrolled in Health Insurance coverage offered by the employer in an
     amount equal to a uniform percentage (not less than 50%) of the premium cost.

               Total compensation        1,046,000
               Less Owners                      360,000
               Less Family Members        250,000
                                            Divide by       12
                                                           36,333

As you can see, this business is eligible for the credit.

What you need to know when buying or selling a business.....

February 1, 2011

A recent issue of Trends stated that we will be going through an unprecedented time for business transitions, so I thought it would make sense to address some of the insurance issues involved in buying or selling a business.  The majority of sales are completed through an asset-purchase method; therefore, I will use that scenario for portions of this article.

• The seller knows and controls the insurance coverages.
• Loss of Rents coverage can easily be added to continue that source of income if a loss causes the rental income to cease during reconstruction.
• Any payments from the insurance carrier are made directly to the seller.