Why Credit Protection Coverage Is Needed

Financial guaranty insurance is a type of credit protection for investors in debt obligations such as municipal bonds, commercial mortgage-backed securities (CMBS), and auto or student loans. It provides financial recourse in the event of a default on the bond or other debt instruments. Banks and other lending institutions require a company that provides them with this type of insurance. The purchase of financial guaranty insurance generally allows the debt issuer to “wrap” the credit rating of the insurer around the debt obligation that is being issued in order to raise the credit rating of the debt and thus qualify the debt for lower interest rates.

Many municipalities use bond insurance to obtain an AAA rating, thereby lowering their borrowing costs, which in turn allows them to save money on the overall transaction. In order for this to occur it’s essential that the financial guaranty insurer maintain a very high credit rating for wrapping the debt obligations it insures. Financial guaranty coverage improves the efficiency of the capital markets from a cost and accessibility perspective. The premium paid for the insurance is less than the amount saved through lower interest rates that can be obtained with a higher credit rating.

Many challenges lie ahead

Despite the growing role of financial guaranty insurance in the securitization process that has come to characterize many financial markets, the entities providing this specific financial service received relatively limited attention until early 2008, when several rating agencies openly discussed the possibility of taking adverse rating actions related to the biggest entities in the sector. This resulted in an intense scrutiny into the role of bond insurers in structured finance.

There is a reasonable amount of public interest in the continued availability of guarantees on payments on municipal bonds. To what extent such concerns justify policy intervention is rather uncertain, however, the business outlook for this sort of activity is reasonably sound. Still, more stringent solutions are in the works and new private capital is entering into that segment.

As to the role of financial guarantors in structured finance, some of the smaller companies may exit the market. It remains to be seen whether or not the remaining financial guarantors will be successful in procuring the necessary capital base to insure such business going forward.

 

Choosing Which Business Insurance to Bundle

In order for your business to make a profit, you need to provide and maintain customer satisfaction. This can be a challenge and if your service to customers comes into question you could find yourself entangled in a lawsuit. If someone falls and is injured while on your property what then? Or you cause property damage to a car parked in your lot and the owner decides to sue for damages – you would likely be found responsible. Two policies that are commonly bundled by small business owners are a general liability and commercial property insurance.

You can even be sued for information or advice that brings harm to a client, and this is another major reason most businesses carry liability coverage in their Indiana BOP insurance package. For example, any time that a client experiences physical harm from using one of your products, including the packaging, that client can seek recourse through the courts. Your business liability package can be enhanced to include product liability coverage. All small businesses such as retail stores and independent contractors need a BOP to safeguard against unforeseen financial losses.

Bundle insurance provides savings

If you have BOP property insurance, the insurance company pays you in order to help your business get back on its feet. Many BOPs also include business interruption insurance that provides coverage that helps you pay any expenses, such as lost revenue that accrues when your business is forced to temporarily shut down after a covered event.

Small business liability insurance will protect a number of people in your company if claims are filed against them, including your employees, accountants, managers, and financial planners. Small business owners can also add “endorsements” to their policy to include certain kinds of additional coverage. The type of endorsements that will benefit your business will depend on the industry you serve.

The best thing to do is to go to an insurance advisor that will be able to inform you about the best companies offering Indiana BOP insurance policies that you’ll need along with the type of insurance terms that you should seek.

 

Inside Running a Laundry Business

Like any other type of business, there are certain factors to consider when operating a laundry business that could affect your success. You’ll have to spend time researching and learning about the types of risks of owning a commercial laundry business so that you can get the proper insurance coverage that will enable you to have success at it.

If you already own a laundry then you probably understand some of the concerns, such as changes in utility rates that will affect your enterprise since it is reliant on electricity, water and sewage in order to conduct operations. There are exposures that exist for any business that provides services to, or deals in the care of items belonging to others. This is where Commercial Launderers insurance comes into play. You have to protect the operations from costly claims and lawsuits that may arise.

The cost of doing business

Part of owning a business is budgeting for expenses, both known and unforeseen. Repairs can be an ongoing issue for a laundry business. Whether your machines are new or old they may break down or cease to function properly. You can purchase coverage that addresses this issue. If your machines are suddenly out of service they aren’t going to be bringing in much revenue. Laundry owners without the mechanical skills to fix their own equipment need to budget for repairs required to fix the machines.

Other expenses include employees hired to ensure that the premises are always clean because it makes customers feel secure and that is critical to the success of your business. Make sure the floor plan has sufficient lighting as well as your parking lot. You should probably hire security because businesses that don’t always have an owner on premise can be easily targeted. Otherwise, customers may decide they’re better off driving to a safer and cleaner facility.

Your laundry facility will need to have cash on hand in order to provide change to operate the machines and this can also put your business at risk, as having a lot of cash on hand could be tempting to a thief that may decide your business is an easy target. That’s why choice in location is so vital to your success, that and having sufficient Commercial Launderers insurance to address your many concerns.

 

Don’t Let the Wind Catch You by Surprise

With its warm, sunny climate, Florida is a haven for homeowners looking for a beautiful place to buy a house. Unfortunately, this legendary climate comes with a dark side: hurricanes. Many homeowners are unaware that wind insurance in Florida is a standalone policy from their homeowners’ insurance. If you live in an area where major storms are a possibility, make sure you insure your most important asset against the potentially devastating damage resulting from nature’s fiercest storms.

Make Sure You’re Properly Covered

When you’re shopping for wind insurance in Florida, it’s important to remember that not all insurance policies are equal. Talking to a wind insurance specialist is a great way to ensure your building has proper coverage against the types of damages typical of your area, such as structural or landscaping.

Take Steps to Cover Your Property Type

These are the four major property types insurance companies cover,

  • Habitational
  • Industrial
  • Commercial
  • Institutional

When you are researching wind insurance companies, take the time to confirm they cover your building type.

Protect Yourself Against the Wind

Every geographical area has quirks that need special coverage. If you live in California, you need earthquake coverage. In Florida, you need protection from hurricane damage. The best time to get your home or commercial coverage is before you need it, so contact a professional insurance specialist regarding wind insurance in Florida. Remember, when it comes to hurricanes hitting Florida, it’s a matter of when not if.

Why You Need Wind Insurance

Living in Florida isn’t all sunshine. As a property owner in Florida, you understand this. Tropical storms and hurricanes are known to leave behind significant damage, and without the right insurance, you’re responsible for all expenses associated with restoring your property. This can be a devastating experience, both financially and emotionally. That’s where wind insurance in Florida comes in.

Unfortunately, you can’t assume that your homeowner’s or commercial property insurance covers wind damage. While in some states wind insurance is part of these standard policies, in Florida, this is usually not the case. Instead, you need to purchase specialized coverage in the form of wind insurance. For property owners like you who live near the coast in a state where strong winds are not uncommon, going without wind insurance means that you would take a big hit in the event of a catastrophe. A standard insurance policy often times doesn’t cover the water damage associated with hurricanes. Since water is what commonly causes the largest damage though, it’s recommended to get an excellent wind insurance policy.

As you can see, not having wind insurance in Florida puts your assets and family’s well-being on the line and it’s always better to be prepared. An experienced and trustworthy insurance specialist is there to get you the coverage you need.

Management Liability Insurance and Business Interruption Coverage Can Play Important Roles in Safeguarding Your Business’ Assets

If something goes wrong with your business, having the right insurance products in place can make all the difference. Although we hope they are few and far between, accidents do happen, natural disasters occur, and people make unfortunate mistakes. Before unforeseen challenges arise, Los Angeles insurance companies can be a great resource when you’re looking for loss protection.

Management liability insurance is something you may not have considered previously, but it’s something directors, officers and managers should certainly think about. Some of the products available cover errors and omissions, fiduciary liability and crime. While nonprofit organizations and small businesses can usually bundle these products in packages, larger companies most often obtain this type of coverage through stand-alone insurance policies.

Another type of insurance available for business owners is business interruption insurance. In the event of a disaster or other type of covered loss, business interruption policies provide stopgap funding when a company must temporarily close its doors. Designed to protect against the hardships created by lost revenue, this type of insurance is also known as business income coverage (BIC). Trusted Los Angeles insurance companies can help you carefully evaluate the many options you have available to safeguard your assets when things go wrong. Then, you can go about your business with confidence.

Protection Required for Mortgage Professionals

One of the mortgage brokers main jobs is to help their customers close the deal on the house of their dreams. Because you earn their trust, your clients believe that you always want to protect them from any issues or complications that can arise in the mortgage process and their hope is that you’re going to get them the best deal possible on their home loans.

You certainly do your best to satisfy the needs of each and every client. If you make a professional mistake, and this can happen quite easily, your client may now decide to sue your company for any financial losses they endure and hardships that they believe you are responsible for. You are obligated to protect your company from these types of potential issues by carrying professional liability insurance for mortgage brokers.

This particular insurance coverage is also known as errors and omissions, or E&O coverage. It is designed to protect your company from financial and legal problems whenever lawsuits arise. Regardless of whether or not your company of makes a professional mistake, if a customer files a lawsuit alleging that you did, you must then address the issue. Dealing with this sort of legal action can ultimately cost your company in both time and money. Without the proper protection in place, you’ll wind up having to pay any money that was lost out of your own pocket.

Issues resulting in litigation

There are several exposures you must consider when engaging in business negotiations. For example, if your company accidentally forgets to sign and date a mortgage loan application on behalf of the client, the client may then lose out on the opportunity to purchase the home they were all set to buy.

They may wish to sue your company for pain and suffering as well as for financial losses if they are now forced to make a higher offer on the property. Professional liability insurance for mortgage brokers is the best solution to any legal or financial burdens that arise due to a lawsuit being filed against an entity or individual.

 

Business Interruption Coverage Can Save the Day

Restaurants, hotels, laundromats, and other businesses across the nation depend on linen supply companies to keep them running properly. The amount of linen, in the form of sheets, towels, uniforms and other essential products in use on a daily basis is staggering. Now imagine if an electrical circuit goes out, or an expensive piece of machinery malfunctions, just how many businesses would be negatively affected? If even one linen company had to shut down for just a day the impact could be monumental.

As an owner, if your business suffered a work stoppage that resulted in a serious business interruption, without Linen Supply Companies insurance that directly addresses this issue your business would be at risk. The significance of the losses could be staggering, and your reputation would also be on the line. In this competitive and burgeoning industry, an event of this type could lead to ruin.

Business interruption insurance vital to success

As you already well know, insurance is a necessity and should never be overlooked. If your company is forced, for any number of reasons, to temporarily cease business operations you probably need business interruption insurance to address these concerns. The primary purpose of this policy is to ensure the business’s income continues to flow when a crisis arises and the business is unable to function for any given amount of time.

You can rest assured that any ongoing expenses will be covered when unable to perform your usual operations. It’s good to know that this policy can also be included in a business owner’s policy (BOP) as part of your Linen Supply Companies insurance coverage.

Business interruption coverage provides for lost revenues, including profits that one would’ve earned if the incident had not occurred in the first place. This often includes the day-to-day expenses, any normal operating costs, such as employees’ wages, and relocation expenses to move the business to a temporary location if required to do so, which may also include moving costs and/or the cost to rent.

You’ll be covered once it’s determined that the cause of the interruption was a covered loss. So, for example, if a fire were to destroy an office, then this type of an event would likely be covered. However, any damage resulting from a flood would only be covered by a flood insurance policy.

 

Investors Seek Opportunities in Financial Guaranty Insurance

Many insurance companies specialize in financial guarantees and similar products that are used by debt issuers as a way of attracting investors. A Financial Guaranty in California can provide investors with an additional level of comfort that the investment will be repaid in the event that the securities issuer would not be able to fulfill the contractual obligation to make timely payments. It can also lower the cost of financing for issuers because the guarantee typically earns the security a higher credit rating and therefore lower interest rates.

Issuers often use a financial guaranty to lower costs of funds and diversify funding sources.  Investors rely on the guaranty for payment of principal and interest when due, and also may benefit from good credit underwriting, as well as negotiated terms, surveillance and, where necessary, remediation.

Financial guaranty insurance is a type of credit protection

For investors in debt obligations such as municipal bonds, commercial mortgage-backed securities (CMBS), and auto or student loans, financial guaranty offers added protection. In essence, it provides financial recourse in the event of a default on the bond or other debt instruments. The terms “monoline,” “financial guaranty insurer,” and “bond insurer” are often used interchangeably to reference a company that provides this type of insurance solution.

The purchase of financial guaranty insurance generally allows the debt issuer to “wrap” the credit rating of the insurer around the debt obligation that is being issued in order to raise the credit rating of the debt, and thus qualify the debt for lower interest rates. For example, many municipalities use bond insurance to obtain an AAA rating, which lowers their borrowing costs, saving money on the overall transaction. For this to occur, it is essential that the financial guaranty insurer maintain a very high credit rating for wrapping the debt obligations it insures.

Remember that, insurance under Financial Guaranty in California allows debt issuers to lower their overall borrowing costs. This occurs because the premium paid for the insurance is less than the amount they can save through the lower interest rates that can be obtained with a higher credit rating. In the case of municipal bonds, the Association of Financial Guaranty Insurers (AFGI) estimates that, in nearly forty years, municipalities and their taxpayers have saved more than $35 billion in interest costs as a result of bond insurance.