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The world might not stop on January 1, 2000, but many computers will. If you're looking for insurance against Y2K-related problems, forget it: Insurers and suppliers alike are backing away from assuming responsibility for any business losses.
"I'm not aware of any product designed to protect small businesses," says Nancy James, principal of N.P. James Insurance Agency in Concord, Massachusetts, and a cyberspace liability specialist. "Every insurance company in the world is telling people why they're not [going to be] insured."
Insurance companies argue that, while their policies are meant to cover unexpected events, there's nothing unexpected about the millennium's approach. "We know exactly when it's coming," says James. "You've every opportunity to fix the problem [now]."
An even bigger reason not to expect a bailout? There's simply not enough money to cover expected damages. Some analysts predict that businesses will lose roughly $600 billion from millennium-related business interruption. The reserve for all United States insurance claims--including home, auto and every other policy type--is only $280 billion.
All the more reason to fix your system before it's too late.
Claire Tristram is a business and technology writer in San Jose, California.
How to shear the cost of your medical insurance.
Here's some good news for budget-conscious entrepreneurs: Last year, Congress voted to accelerate the timeline for business owners to fully deduct their medical insurance by 2003.
But if that seems like too long to wait, you may already be able to deduct 100 percent of your medical insurance, says Bob Sharp, a CPA with Sharp, Thunstrom and Batson, an accounting firm in La Mesa, California. If your spouse works for your company, then you can offer group health insurance, declare yourself a dependent of your spouse and legally deduct 100 percent of your medical insurance expense.
"[This strategy] will work to an advantage before the percentage kicks in to 100 percent," Sharp says. "There will be a crossover point if you take into consideration the cost of payroll taxes and workers' compensation insurance for the spouse."
Be sure to check with your accountant to see if this solution applies to your situation.
Wheeling & Dealing
Here are two probable facts regarding commercial auto insurance:
1. You probably don't have enough coverage.
2. You're probably paying too much for what you do have.
Once you've taken out the minimum auto insurance required by law, it's relatively inexpensive to increase your liability coverage, says David Snyder, assistant general counsel of the American Insurance Association. "Additional layers of coverage, even up to $1 million or more, don't cost that much more money," he explains.
Smart planning about deductibles can also keep your policy expenses down. "If you're more likely to write off a $1,000 expense than report it to an insurance company, then why are you carrying a $250 deductible?" asks Barry Schimel, co-founder of the Institute of Profit Advisors, a national consortium of business consultants in Chicago. Schimel also advises staying on top of seasonal changes in vehicle usage and discontinuing insurance coverage whenever a vehicle isn't used regularly.
N.P. James Insurance Agency, (978) 369-2771, http://www.npjames.com
Barry Schimel, (800) WE PROFIT, http://www.weprofit.com
Sharp Thunstrom & Batson, (619) 463-5548, firstname.lastname@example.org