With so many products and services available to consumers, how do you make yours stand out? The temptation to cut corners by making misleading claims or not performing that complex and lengthy quality test is real. Resisting temptations like these may be the key to avoiding legal troubles in the future.
THE Dos
DO pick a company name and trademark or service mark that has not already been chosen by someone else.
DO register your company with the appropriate state officials.
DO obtain trade name, trademark, service mark, copyright, and trade dress protections to ensure that your products and expressions are safe from copycats and infringers.
DO make yourself knowledgeable of state and national laws and regulations concerning creation of businesses, management of businesses, and consumer protection.
DO follow all state and national health and safety requirements in developing your product.
DO perform the necessary testing to ensure that your product or services stand up to the claims you make about them.
DO advertise and market your product or service in a manner which is lawful.
DO your homework: if you claim your product is the "fastest," the "cheapest," the "newest," or anything like that, do your research before making the claim so that you know it is true.
DO plan ahead. Develop a budget for marketing that you are willing and able to stick to. Be prepared to spend money to market your product, but know your financial limitations and avoid over-extending your pocketbook.
THE DON'Ts
DON'T be a copycat and use someone else's idea for a product or service without their knowledge and approval.
DON'T make guarantees or claims in your advertisements that you cannot support with facts and evidence.
DON'T advertise in a misleading or deceptive manner. Consumer protection statutes in every state protect against these types of actions and if you are caught attempting to deceive consumers the punishment can be more than monetary -- your business reputation will also suffer.
DON'T fail to appreciate your target audience when seeking to market and advertise your products and services.
Ten Tips for Starting and Running a Successful Small Business
Suggestions to help get your business off to a smooth start and keep it going for the long haul.
1. Save up as much money as possible before starting. All too often, people go into business without any savings, exclusively using loan money from friends, banks, or the SBA. They except to be able to start paying the loans back right away with their profits. What these business owners don't realize is that it can take months or years to make a profit. And once a lender discovers a business isn't as profitable as expected, the lender is likely to call in the loan or refuse to renew it for another year. Often new business owners then have to take out home equity loans or use credit cards to pay off their loans (which puts their home and credit rating at risk).
A better plan is to save up as much of the needed investment money as possible, including your living expenses for the first year, or even two. Odds are that your business won't be profitable for one to two years. Even if you get plenty of business coming your way -- and your customers pay you on time, which isn't always a sure thing -- you'll want to be able to invest most of that money back in the business for space, equipment, advertising, and insurance needs.
2.Start on a shoestring. Think small. Don't rent premises if you can work somewhere else, and don't hire employees until you can keep them busy. (You can hire independent contractors or temps in the meantime.)
People who start their small business on the cheap, often in a garage, den, or some other scavenged space, and create their first goods or services with more sweat than cash, have the luxury of making their inevitable rookie mistakes on a small scale. And precisely because their early screw-ups don't bury them in debt, they are usually able to learn and recover from them.
3.Protect your personal assets. When you go into business for yourself, you are usually personally liable for all judgments and debts that the business incurs. This includes business loans, taxes, money owed to suppliers and landlords, and any judgments against the business as a result of a lawsuit. If you don't protect yourself, a creditor can go after your personal assets, such as your car and your house, to pay for these debts.
While you can protect yourself against lawsuits by buying business liability insurance, this won't help you with business debts. If you will be running up big debts, consider forming a corporation or limited liability company (LLC). Just one person can form either of these types of businesses.
4.Understand how -- and if -- you will make a profit. You should be able to state in just a few sentences how your business plans to make a substantial profit. For starters, you need to know your costs: how much you'll spend purchasing inventory, paying the rent, compensating any employees, and covering what is likely to be a surprisingly long list of other costs. Then you can figure out exactly how much you need to sell each month, for how many dollars, to cover those expenses and have an adequate profit besides. These numbers are all you need to create a "break-even analysis."
5. Make a business plan, no matter how short. Understanding your profit numbers and creating a break-even analysis is the first step in making a business plan. For most small companies, the key portions of a business plan are the break-even analysis, a profit-and-loss forecast, and a cash flow projection. (Projecting your cash flow is key and will make or break your company: Even if your business is getting plenty of work or selling its products, if you're not getting paid for 90-180 days, you're not going to survive unless you've planned for it.) With a cash flow spreadsheet in place, as well as a profit-and-loss forecast, you can tinker with your business idea and improve it before you start -- and continue to use them after you start.
Creating a business plan also allows you to determine what your projected start-up costs are (how much money you'll need to save) and what you marketing strategies are (how you'll reach customers to make sales). If you can't make the numbers work on paper, you won't be able to make them work in real life.
6. Get and keep a competitive edge. Building a competitive edge into the fabric of your business is crucially important to long-term success. Some ways to get this edge are by knowing more than your competitors, making a product that is hard or impossible to imitate, being able to produce or distribute your product more efficiently, having a better location, or offering superior customer service.
One way to hold on to your competitive edge is to protect your trade secrets -- confidential information that gives you a competitive advantage in the marketplace. Examples of trade secrets include customer lists, survey methods, marketing strategies, and manufacturing techniques. To protect your trade secrets under the law, you need to take steps to keep the information confidential. This includes marking documents "Confidential," using passwords to protect computer information, using nondisclosure and/or noncompete agreements, and limiting access to employees with a reasonable need to know the trade secrets.
Another way to keep your competitive edge is to react quickly to bad news. Once you see that your business faces some kind of adversity, you need to come up with a plan to deal with it immediately. This may involve moving your offices, introducing a new product or service, or developing a better way to reach customers.
7.Put all agreements in writing. The laws of your state require you to put some contracts and agreements in writing:
•Contracts that will last longer than a year.
•Contracts that involve the sale of goods worth $500 or more.
•Contracts that transfer the ownership of copyrights or real estate.
Even if not legally required, it's wise to put almost everything in writing, because oral agreements can be difficult or impossible to prove. This includes leases or rental agreements, storage agreements, contracts for services (such as consulting or electrical work), purchase orders or contracts for goods worth more than a couple hundred dollars, offer letters of employment, and employment policies. Get in the habit of getting and giving receipts for all goods, services, and deposits, regardless of how much.
8.Hire and keep good people. Your goal should be to hire and retain truly excellent employees -- not just reasonably competent ones. A highly competent and truly enthusiastic employee is at least two and sometimes even three times as valuable as a person of average skills.
To create a stable and happy workforce, it's essential not only that your employees (and independent contractors) believe they are being fairly treated, but that your business is worthy of respect. Employees and contractors who like their work will represent you well on and off the job. And customers will more likely be loyal to an upbeat business -- and are more likely to recommend it to their friends.
9. Pay attention to the legal status of your workers. When you hire workers as independent contractors, make sure they shouldn't really be taxed as employees. The IRS can impose substantial penalties against you for not withholding taxes and paying taxes for a worker who is really an employee. The IRS and other agencies are likely to think that a worker is an employee rather than an independent contractor under any of these conditions:
•The worker works full-time or nearly full-time for you.
•The worker doesn't work for anyone else.
•The worker provides services that are an integral part of your operations.
•You control how the worker does the job and provide detailed instructions and training for the worker.
One way to help avoid trouble is to have the worker sign a written service contract, or independent contractor agreement.
Most employees you hire will be "at-will" employees -- subject to being fired at any time and for any reason (except for illegal motives such as discrimination). It's important to preserve your at-will rights because they protect you from having to prove that you have a valid business-related reason to terminate an employee. Don't make any promises to prospective or current employees that you are offering a permanent job or that they will lose their job only if they perform poorly, because this will limit your ability to terminate the employee for other reasons, such as personality conflicts or finances.
When hiring an at-will employee, have the employee sign an offer letter that makes it clear that the employment relationship is at will. Except for high-level executives, you shouldn't have employees sign an employment contract -- this can limit your ability to alter the terms of employment as your business needs change and subjects you to higher legal standards.
10. Pay your bills early and your taxes on time. In the real world, where a reputation for keeping one's word is a hugely important asset, a good strategy is either to pay your bills up front or pay them early. You gain trust, build a positive credit profile, and have a built-in safety net if things go badly. These benefits outweigh any interest you might earn by holding onto your money until the last possible minute.
Most importantly, pay your payroll taxes on time, especially the portion that you withhold from your employees' paychecks. The IRS and state tax authorities can hold you personally liable for these taxes, plus stiff penalties, if they're not paid. This is true even if you operate your business as a corporation or LLC or if your business goes bankrupt -- you will still be personally and legally on the hook to pay back payroll taxes.
The most common types of commercial insurance are property, liability and workers' compensation. In general, property insurance covers damages to your business property; liability insurance covers damages to third parties; and workers' compensation insurance covers on-the-job injuries to your employees. Depending on your business, you may want additional specialized coverages. Listed below are some of the different types of business insurance.
PROPERTY INSURANCE
Property insurance pays for losses and damages to real or personal property. For example, a property insurance policy would cover fire damage to your office space. You can purchase additional coverages for business property, including:
Boiler and Machinery Insurance Boiler and machinery insurance, sometimes referred to as "equipment breakdown" or "mechanical breakdown coverage," provides coverage for the accidental breakdown of boilers, machinery, and equipment. This type of coverage usually will reimburse you for property damage and business interruption losses. For example, this coverage would cover fire damage to computers.
Debris Removal Insurance Debris removal insurance covers the cost of removing debris after a fire, flood, windstorm, etc. For example, a fire burns your building to the ground. Before you can start rebuilding, the remains of the old building have to be removed. Your property insurance will cover the costs of rebuilding, but not of removing the debris.
Builder's Risk Insurance Builder's risk insurance covers buildings while they are being constructed. For example, a Builder's risk policy would cover losses if a windstorm takes down your partially constructed condominium complex.
Glass Insurance Glass insurance covers broken store windows and plate glass windows.
Inland Marine Insurance Inland marine insurance covers property in transit and other people's property on your premises. For example, this insurance would cover fire-damage to customers' clothing from a fire at your dry cleaning business.
Business Interruption Insurance Business interruption insurance covers lost income and expenses resulting from property damage or loss. For example, if a fire forces you to close your doors for two months, this insurance would reimburse you for salaries, taxes, rents, and net profits that would have been earned during the two-month period.
Ordinance or Law Insurance Ordinance or law insurance covers the costs associated with having to demolish and rebuild to code when your building has been partially destroyed (usually 50 percent). For example, your three-story building is 100 years old. A flood destroys the basement and first two stories. Because more than 50 percent of your building has to be rebuilt, a local ordinance requires that the building be completely demolished and rebuilt according to current building codes. Property insurance covers only the replacement value, not the upgrade.
Tenant's Insurance Commercial leases often require tenants to carry a certain amount of insurance. A renter's commercial policy covers damages to improvements you make to your rental space and damages to the building caused by the negligence of your employees.
Crime Insurance Crime insurance covers theft, burglary, and robbery of money, securities, stock, and fixtures from employees and outsiders.
All to often we speak with insurance consumers that don't fully understand the industry or the products that are available. Consumers understand deductibles and generally co insurance percentages if they have any and the rest is somewhat of a mystery.
We fully understand that insurance can be a confusing and frustrating experience and that's exactly why we've put together this website. To educate and give you non biased information on Life, Auto, and Homeowners Insurance. Hopefully, we will shed some light on some questions you may have and give you information you didn't even know you needed.
Health Insurance You need health insurance, and the time to get it is before you have an accident, suffer a serious illness...
Travel Insurance Travel insurance provides international health / medical coverage, should something happen to you abroad.
Home Insurance Home insurance breaks down into two distinct types: buildings insurance and contents insurance.
Car Insurance This is insurance which protects the insured against losses involving the use of cars.
Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
Auto insurance provides property, liability and medical coverage:
Property coverage pays for damage to or theft of your car.
Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you're financing a car, your lender may also have requirements.
Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.
Without a doubt, life insurance should be an important part of many people's financial plan. Having said that, don't be scared into buying insurance you don't need.
"I see time and again that life insurance is not suggested for children since no one relies on their income. I find this advice a little shocking and short-sighted since a child's funeral is not free."
"A minor child may develop physical ailments in his teens or early adulthood that could render him uninsurable."
"Young and single people die and leave debt."
"Older people, who need their money to live on, can use life insurance to help their grandkids compete in this unbalanced society."
Insurance in its basic form is defined as “A contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event."
In simple terms it is a contract between the person who buys Insurance and an Insurance company who sold the Policy. By entering into contract the Insurance company agrees to pay the Policy holder or his family members a predetermined sum of money in case of any unfortunate event for a predetermined fixed sum payable which is in normal term called Insurance Premiums.
Insurance is basically a protection against a financial loss which can arise on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. By paying a very small sum of money a person can safeguard himself and his family financially from an unfortunate event.
For Example if a person buys a Life Insurance Policy by paying a premium to the Insurance company , the family members of insured person receive a fixed compensation in case of any unfortunate event like death.
There are different kinds of Insurance Products available such as Life Insurance , Vehicle Insurance, Home Insurance, Travel Insurance, Health or Mediclaim Insurance etc.
The following definitions of Insurance Terms are from insurance sources. They are included below for your information. The content is believed accurate but is not guaranteed.
Plain English explanations of insurance terms used by agents, companies and lawyers and found in your insurance policies.
ABANDONMENT: Giving up the proprietary rights in insured property to the Underwriter in exchange for payment of a constructive total loss.
ACCIDENT: An unexpected fortuitous event, unforeseen and unintended, not under the control of an insured and resulting in a loss.
ACCIDENT FREQUENCY: The number of times an accident occurs. Used in predicting losses upon which premiums are based.
ACCIDENT INSURANCE: A form of health insurance against loss by bodily injury.
ACCIDENTAL DEATH: Coverage in the event of death due to an accident, usually in combination with dismemberment insurance.
ACCOUNTS RECEIVABLE POLICY: An inland marine (also burglary) policy written to protect the insured from financial loss due to his inability to collect amounts owed him because of the destruction of his records.
ACT OF GOD: A flood, an earthquake or other accident or event that is without any human intervention and that could not have been prevented by reasonable care or foresight, but is the result of natural causes (A snowstorm is an Act of God; driving in one is an act of man).
ACTUAL CASH VALUE: The sum of money required to pay for damages or lost property, computed on the basis of replacement value less its depreciation by obsolescence or general wear.
ACTUAL TOTAL LOSS: Occurs when:
(1) the insured property is completely destroyed or
(2) the Assured is irretrievably deprived of the insured property or
(3) cargo changes in character so that it is no longer the thing that was insured or
(4) a ship is posted "missing" at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss.
ACTUARY: A professional trained in the mathematics of insurance and risk management.
ADD-ONS: Additional coverages to your basic policy.
ADDITIONAL INSURED: A person or firm or corporation other than the named insured on a policy or mortgage company named in a mortgagee clause, who is protected against loss by the terms of the policy or mortgage company named in the mortgage clause.
ADJUSTER: An individual representing the insurance company and acting for the company in working on agreements as to the amount of a loss and the liability of the company in same.
ADVERSE SELECTION: Selection against the insurance company; the tendency of more poor risks to buy and maintain insurance than good risks.
AGENTS: Two types of agents sell insurance: (1) Independent Agents are self-employed business people who typically represent more than one insurance company and are paid on a commission basis; and (2) Exclusive Agents represent only one insurance company and may be salaried or work on a commission basis.
ALL RISK: Insurance against loss or damage to property arising from any fortuitous cause, except such as may be specifically excluded.
ANNUITY: A life insurance company contract that pays a periodic income benefit for a specified period of time.
APPLICATION: A signed statement by a prospective insured client which becomes a part of the insurance contract.
APPRAISAL: A survey of property made for determining its insurable value or the amount of loss sustained.
ASSIGNMENT: The passing of beneficial rights from one party to another.
ASSIGNED RISK: A risk which underwriters do not care to insure, but because of state law or otherwise, the insured must be protected and the insurance is therefore handled through the state and assigned to companies.
ASSUMED LIABILITY: Liability which would not rest upon a person except that he has accepted responsibility by contract expressed or implied. This is also known as contractual liability.
AUTOMOBILE INSURANCE PREMIUM DISCOUNTS: A discount offered to drivers for such safeguards as air bags, seat belts, good driving record, anti-theft devices, multiple vehicles, etc.
AUTOMOBILE FLEET POLICY: A commercial automobile policy covering five or more automobiles.
AVERAGE: A marine partial loss. This can be particular average or general average (see below).
AVERAGE CLAUSE: A clause in a marine insurance policy, whereby partial losses are subject to special conditions (e.g. a franchise or deductible is to be applied to claims).
A fundamental principle of insurance is to put you in the same financial condition after the loss or injury as you were before it. The aim of all insurance companies is to compensate the owner against loss arising from a variety of risks, which he anticipates, to his life, property and business. All insurance contracts are based on the information provided by the insured in the proposal form.
Types Of Insurance Available :
·1. Auto Insurance
oTwo Wheeler Insurance
oCar Insurance
oCommercial Vehicle Insurance
· 2. Commercial Inurance
oAgriculture Insurance
oFire Insurance
oIndustrial Insurance
oMarine Insurance
oShop Insurance
· 3. Home Insurance
·4. Life Insurance
oAccident Insurance
§NRI Accident Insurance
§Personal Accident Insurance
oHealth Care Insurance
§Medical Insurance
§Critical Illness Insurance
·5. Travel Insurance
With the opening of the insurance sector by the government, private players are giving stiff competition to the public sector players, making them provide better services and new products to the customers.
Life insurance is an agreement between you (the insured) and an insurer. Under the terms of a life insurance policy, the insurer promises to pay a certain sum to a person you choose (your beneficiary upon your death), in exchange for your premium payments. Proper life insurance coverage should provide you with peace of mind, since you know that those you care about will be financially protected after you die.
The many uses of life insurance
One of the most common reasons for buying life insurance is to replace the loss of income that would occur in the event of your death. When you die and your paychecks stop, your family may be left with limited resources. Proceeds from a life insurance policy make cash available to support your family almost immediately upon your death. Life insurance is also commonly used to pay any debts that you may leave behind. Life insurance can be used to pay off mortgages, car loans, and credit card debts, leaving other remaining assets intact for your family. Life insurance proceeds can also be used to pay for final expenses and estate taxes. Finally, life insurance can create an estate for your heirs.
How much life insurance do you need?
Your life insurance needs will depend on a number of factors, including whether you're married, the size of your family, the nature of your financial obligations, your career stage, and your goals. For example, when you're young, you may not have a great need for life insurance. However, as you take on more responsibilities and your family grows, your need for life insurance increases.
There are plenty of tools to help you determine how much coverage you should have. Your best resource may be a financial professional. At the most basic level, the amount of life insurance coverage that you need corresponds directly to your answers to these questions:
What immediate financial expenses (e.g., debt repayment, funeral expenses) would your family face upon your death?
How much of your salary is devoted to current expenses and future needs?
How long would your dependents need support if you were to die tomorrow?
How much money would you want to leave for special situations upon your death, such as funding your children's education, gifts to charities, or an inheritance for your children?
Since your needs will change over time, you'll need to continually re-evaluate your need for coverage.
How much life insurance can you afford?
How do you balance the cost of insurance coverage with the amount of coverage that your family needs? Just as several variables determine the amount of coverage that you need, many factors determine the cost of coverage. The type of policy that you choose, the amount of coverage, your age, and your health all play a part. The amount of coverage you can afford is tied to your current and expected future financial situation, as well. A financial professional or insurance agent can be invaluable in helping you select the right insurance plan.
What's in a life insurance contract?
A life insurance contract is made up of legal provisions, your application (which identifies who you are and your medical declarations), and a policy specifications page that describes the policy you have selected, including any options and riders that you have purchased in return for an additional premium.
Provisions describe the conditions, rights, and obligations of the parties to the contract (e.g., the grace period for payment of premiums, suicide and incontestability clauses).
The policy specifications page describes the amount to be paid upon your death and the amount of premiums required to keep the policy in effect. Also stated are any riders and options added to the standard policy. Some riders include the waiver of premium rider, which allows you to skip premium payments during periods of disability; the guaranteed insurability rider, which permits you to raise the amount of your insurance without a further medical exam; and accidental death benefits.
The insurer may add an endorsement to the policy at the time of issue to amend a provision of the standard contract.
Types of life insurance policies
The two basic types of life insurance are term life and permanent (cash value) life. Term policies provide life insurance protection for a specific period of time. If you die during the coverage period, your beneficiary receives the policy death benefit. If you live to the end of the term, the policy simply terminates, unless it automatically renews for a new period. Term policies are available for periods of 1 to 30 years or more and may, in some cases, be renewed until you reach age 95. Premium payments may be increasing, as with annually renewable 1-year (period) term, or level (equal) for up to 30-year term periods.
Permanent insurance policies provide protection for your entire life, provided you pay the premium to keep the policy in force. Premium payments are greater than necessary to provide the life insurance benefit in the early years of the policy, so that a reserve can be accumulated to make up the shortfall in premiums necessary to provide the insurance in the later years. Should the policyowner discontinue the policy, this reserve, known as the cash value, is returned to the policyowner. Permanent life insurance can be further broken down into the following basic categories:
Whole life: You generally make level (equal) premium payments for life. The death benefit and cash value are predetermined and guaranteed. The policyowner's only action after purchase of the policy is to pay the fixed premium.
Universal life: You may pay premiums at any time, in any amount (subject to certain limits), as long as policy expenses and the cost of insurance coverage are met. The amount of insurance coverage can be changed, and the cash value will grow at a declared interest rate, which may vary over time.
Variable life: As with whole life, you pay a level premium for life. However, neither the death benefit nor cash value are predetermined or guaranteed; they fluctuate depending on the performance of investments in what are known as subaccounts. A subaccount is a pool of investor funds professionally managed to pursue a stated investment objective. The policyowner selects the subaccounts in which the cash value should be invested.
Universal variable life: A combination of universal and variable life. You may pay premiums at any time, in any amount (subject to limits), as long as policy expenses and the cost of insurance coverage are met. The amount of insurance coverage can be changed, and the cash value goes up or down based on the performance of investments in the subaccounts.
Choosing and changing your beneficiaries
You must name a primary beneficiary (this can be your estate) to receive the proceeds of your insurance policy. Your beneficiary may be a person, corporation, or other legal entity. You may name multiple beneficiaries and specify what percentage of the net death benefit each is to receive. If you name your minor child as a beneficiary, be sure to designate an adult as the child's guardian in your will.
Generally, you can change your beneficiary at any time. Changing your beneficiary usually requires nothing more than signing a new designation form and sending it to your insurance company. If you have named someone as an irrevocable (permanent) beneficiary, however, you will need that person's permission to adjust any of the policy's provisions.
Where can you buy life insurance?
You can often get insurance coverage from your employer (i.e., through a group life insurance plan offered by your employer) or through an association to which you belong (which may also offer group life insurance). You can also buy insurance through a licensed life insurance agent or broker, or directly from an insurance company.
Any policy that you buy is only as good as the company that issues it, so investigate the company offering you the insurance. Ratings services, such as A. M. Best, Moody's, and Standard & Poor's, evaluate an insurer's financial strength. The company offering you coverage should provide you with this information.
