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How to Set Up a Home-Based Business Office

Monday, June 27th, 2016

Homepreneure-e1376337238809There’s no denying that home-based businesses are on the rise. Right now, it’s estimated that there are 38 million home-based businesses that generate $427 billion a year in the United States.

Perhaps you already have an idea for a home-based business—and maybe you’ve even thought through the risks as well as logistics like buying business insurance. If so, you’re probably focused on one of the more enjoyable aspects of your new enterprise: setting up your home- based business office.

Whether you have a spacious wing of your house or simply one end of your kitchen table, it’s your space. Not sure where to start? Then read on to get some tips to set up your home-based business office.

Supplies for your home-based business

  • Set a budget and stick to it. Chances are you don’t have an abundance of funds if you’re just starting out. That’s why it’s important to create a budget and commit to it. Thrift stores, clearance aisles and yard sales are all great ways to score good buys if you’re on a tight budget.
  • Keep your receipts. You can deduct from your taxes many items that you purchase for your home-based office.
  • Think about the equipment you really need. If you’re going to use a piece of equipment on a daily basis, buy it. For equipment you use less often, a trip to a copier or office supplies store may be more economical.
  • Invest in ergonomics. A chair is one thing you don’t want to buy online—go test a few to find one that’s a good fit. Also consider a standing desk—research shows that it’s not healthy to sit all day.
  • Stock up. Whether it’s paper, pens, printer ink or boxes, make sure to have plenty of supplies on hand. Constantly having to buy one thing at a time cuts into your productivity—plus, you can usually pay less if you buy in bulk.

How to set up your home-based business

  • Try to get some natural light. One of the best parts of not being cube-bound is having access to light that isn’t exclusively emitted from fluorescent bulbs. Beyond just looking nicer, natural light has many positive health benefits for office workers.
  • Consider noise level. Think about the noise levels both inside and outside your home for each space you’re considering. White noise can help reduce distraction as well.
  • Indulge in some aromatherapy. Scents can have a pretty big impact on your stress level and focus. Consider a room spray, potpourri or an oil diffuser. Lavender reduces stress, peppermint boosts energy and lemon is calming.
  • Don’t forget colors. Like scents, colors influence you more than you think. Learn about how color affects mood before you commit to a color for your office.
  • Get plants. Did you know that plants can make you 15 percent more productive? You don’t need a green thumb to enjoy the benefits of plants—varieties like succulents and bamboo are easy to care for.
  • Create a separation from the rest of your house. If you don’t have a separate room in your house, try to partition part of your home. Having physical boundaries helps create mental boundaries when the temptation to work around the clock hits. Having a clock in clear view and set office hours will also help you establish a line between your personal and professional lives.

Many home-based business owners don’t realize that their homeowners insurance does not protect their business in most cases. For that reason, it’s best to check with an insurance professional at Melendez Insurance. He or she can tell you more about your business insurance options and get you a free quote.

Large Losses Are a Threat to Every Business

Friday, April 22nd, 2016

UmbrellaPolicyMany trends in today’s business world are exciting and encouraging. Unfortunately, the number of lawsuits and high-dollar awards in liability cases are not one of those positive trends. Here are a few recent news headlines from around the country:

  • Pennsylvania hotel sued for concussion from shower slip.
  • Fatal two-truck accident case in New York results in $3.97 million settlement.
  • Virginia victims get settlement checks (about $9 million) over toxic drywall.

There’s no way to prevent lawsuits like these entirely, but you can manage the impact. A business catastrophe liability policy serves as financial protection, or a cushion, against a legal judgment for a covered loss, beyond the limits of your underlying insurance policies.

A business catastrophe liability policy functions in a similar fashion to a personal catastrophe liability policy.  Personal catastrophe liability —commonly known as “umbrella” – coverage can provide an extra layer of liability protection over and above your auto and homeowners policies in the event that a covered claim is made against you (or a covered family member).

Like a personal catastrophe liability policy, a business catastrophe liability policy doesn’t replace your present policy. Instead, it bolsters it with an additional $1 million (or more) in liability protection.

Examples of business liability claims

Research shows that four out of 10 small businesses are likely to experience a claim in the next 10 years. While most of these claims will be covered by an underlying policy, some claims will exhaust a business’s underlying policy. If that happens, the very future of a business could be at stake if applicable coverage under a business catastrophe policy is not in place.

Here are some types of situations that could lead to costly claims:

  • Product liability
  • Customer slip and falls
  • Reputational harm like libel or slander
  • Someone being struck by an object

Protect your business

Not having enough liability coverage for your business could spell trouble down the line. Protect what you worked so hard to build by contacting Melendez Insurance.

Eight Tips to Help Avoid Costly Slips, Trips & Falls

Tuesday, September 22nd, 2015

No one wants to see employees hurt on the job, especially if an accident was preventable. Unfortunately, slips, trips and falls can be major and costly accidents in the workplace.

Nearly 20 percent of the workers’ compensation claims filed last year were due to slips and falls. About one-third missed work for a significant time because of their injuries, which can increase the cost of claims dramatically.

With a proper safety plan in place, you could avoid accidents or reduce the severity of accidents, decrease an injured employees’ time away from work and avoid productivity drops. You could also keep your costs in check.

What are the common causes of slips, trips, falls?

Slips, trips and falls can occur on a variety of walking surfaces as well as on ramps and stairways. Some of the major hazards associated with these accidents can include:

  • Slippery, broken or uneven surfaces
  • Inadequate spill cleanup
  • Poor drainage
  • Weather conditions
  • Loose rugs or wrinkled carpet
  • Clutter, poor lighting or obstructed views

8-question checklist for evaluating floor safety

So are the floors at your business safe? To help you find out, answer yes or no to the following questions, developed from Occupational Safety and Health Administration (OSHA) guidelines.

  1. Has your organization selected a floor material that is appropriate for the environment in which it will be used?
  2. Are the adjacent walking surfaces in your business similar?
  3. Does your business have a program for regularly cleaning its floors? Is your floor cleaner certified by the National Floor Safety Institute (NFSI)?
  4. Does your business use different mops for cleaning and disinfecting?
  5. Are your floors treated with a high-traction finish?
  6. Does your organization strip an old finish following the manufacturer’s instructions before applying a new one?
  7. Does your organization require employees to wear appropriate footwear?
  8. Does your organization use proper warning signs for slip/trip/fall hazards?

Based on your answers to these questions, what are opportunities for improvement? What actions do you need to take?

Don’t slip up

Erie Insurance’s staff of risk control consultants can help you identify slip, trip and fall exposures and solutions to help prevent them. Ask Melendez Insurance about how to develop a customized risk control plan for your business.

Can Your Business Afford to Lose $3,000 a Day?

Tuesday, July 21st, 2015

business_interrupt_thinkstockphotos186928593The recent storms that swept across the country shut many businesses down for days on end.

Downtime like that can cost your business big bucks: The Symantec 2011 SMB Disaster Preparedness Survey revealed that disasters cost inoperable small businesses an average of $3,000 a day.

Most people would never consider opening a business without coverage for things like fires and weather events. But many small business owners don’t think about how they would manage if a fire or other disaster made their building temporarily unusable. A business that has to close down completely while the premises are being repaired may lose out to competitors—or even end up going out of business.

The good news is that you can protect your business with business interruption insurance. Business interruption insurance covers the revenue you would have earned (based on your financial records) had the disaster not occurred. The policy also covers continuing operating expenses (like electricity) that continue even though business activities have come to a temporary halt.

Business interruption coverage is not sold separately—it is added to a property insurance policy or included in a package policy. Talk to an insurance professional at Melendez Insurance to learn more about it and to get a free quote.

The 5 Biggest Financial Threats to Your Small Business

Sunday, December 7th, 2014

Biggest-Financial-Threats-for-Small-BusinessRunning a business is about balance. You have to balance your weaknesses with greater strengths. You have to balance your team with talented candidates in many different disciplines. You have to balance threats with opportunities, or at least proactive measures to reduce those threats.

Threats to your business can come in many forms, from conceptual failures to real physical consequences. Some of the most dangerous threats are financial threats, which can escalate your costs, stifle your revenue growth, or in some other way compromise your profitability.

As you grow and develop your business, be sure to avoid these five major financial threats.

1. Losing a Major Client

Once you get your business up and running, you’ll probably have a handful of major clients or a major segment of your audience that you rely on for the majority of your revenue. The Pareto principle applies here for most businesses—approximately 80% of your business (or revenue) will come from 20% of your customers. Losing the bulk of that 20% of your customer base could be devastating for your revenue, leaving you with all the expenses of your original model without the income to offset them. Depending on the size of your business and the contingencies you have in place, it could spell disaster for your company in a matter of months.

The solution: The easiest way to prevent such a potential disaster is to strategically build your customer base. If you have one major client that provides the bulk of your revenue, try to find another that can balance them out, or build a backup of several dozen smaller clients so you aren’t as dependent. Similarly, you can expand your target demographics so you aren’t dependent on sales from one niche market. Either way, make sure you have formally drawn-up contingency plans that allow you to either drastically cut expenses or change strategies should your revenue suddenly diminish.

2. Overspending

It’s easy to overspend, especially when you’re excited about developing your business, but spending too much too quickly could wind up devastating your bottom line. The two main culprits here are marketing and hiring. On the marketing front, companies tend to overestimate the impact of their marketing campaign without grounding the numbers in research. As a result, they’ll throw thousands of dollars into a campaign they know nothing about, and might be forced to leave before they see any real results. On the hiring front, companies might hire a full team of full-time workers, anticipating increased demand, only to find their revenue growing far more slowly than expected.

The solution: There are two solutions to this financial threat. The first is doing more extensive research. Force yourself to logically and statistically defend your spending decisions with real research—it can prevent you from making impulsive or speculative decisions. The second is scaling more efficiently. In hiring, marketing, or any other spending area, start out small and start out slowly. Monitor your progress and only ratchet up your spending as necessary.

3. Poor Cash Flow Management

Cash flow is another business killer. In addition to making sure the bottom line for the business shows a profit, companies need to actively manage their incoming and outgoing cash so they can continue to pay their bills and their employees without jeopardizing the entire operation. Neglecting to actively manage your cash flow could lead you to run out of money—even if your total projected numbers still land in your favor.

The solution: Keep a close eye on your cash flow, and do whatever it takes to keep it positive. Negotiate terms with your vendors and suppliers, and only pay bills on the day they’re due. Give limited terms to your customers, invoice early, and send follow-ups to ensure timely payment. Report regularly, and know where you stand at the end of every day. Most cash flow problems can be corrected if caught early.

4. Pricing Errors

Pricing problems are some of the most difficult financial threats to prevent, since there are so many unknowns when developing an initial price model. In your business plan, you likely outline the reasoning for the prices of your products and services, estimating the total resource and human capital costs for production and distribution. However, there are many unpredictable factors that could get in the way of successful implementation of your model. Pricing too high could severely throttle your customer base, while pricing too low could make your profit margins too slim to see any real eventual benefit.

The solution: There will always be unknowns and market changes, so it’s impossible to effectively predict every aspect of your pricing structure. However, if you extensively research your pricing and stay flexible enough to adapt when new factors emerge, you’ll be able to build an ever-changing pricing model that puts you in the best possible ongoing position.

5. Legal Problems

It could be a disgruntled employee trying to take you for all you’re worth. It could be a harassment or discrimination suit filed against you by an employee. It could be a copyright or patent violation. It could be an angry customer trying to get revenge. Whatever the case, there’s a very real possibility that your business will face some type of legal action at some point during the course of its development. Getting sued could cost you thousands or millions of dollars, which you might not have, forcing you to close your doors forever.

The solution: Being proactive is the key here. Offering training seminars to prevent your employees from engaging in actionable offenses is a good idea, but you’ll never be able to prevent every possible lawsuit. If you’re interested in protecting your business from these threats, general liability insurance will help provide an additional layer of support.

Threats are only powerful if they aren’t anticipated. Keeping a steady read on the pulse of your business, identifying potential problems before they escalate, and constantly refining your approach will all help you mitigate the possible impact of these critical threats.

America’s Best-Kept Secret About Business Insurance

Wednesday, November 12th, 2014

best-kept-secret-business-insuranceThe vast majority of successful business owners enjoy that status by working hard and making smart decisions. One of the best decisions any company can make is finding experienced, qualified people for key positions. One position that can greatly impact any business investment’s chance of success is its insurance agent. Do you want an agent who works for your business, or the insurance company?

To protect your investment and future, purchasing from a quality business insurance company is imperative for the long-term success of your business. As a business owner, however, it can be difficult to know what actually constitutes a “quality” company, given the variety of options available to you. This article will serve as a primer to help guide you in the right direction.

Captive Versus Independent

There are two primary types of insurance agents who will handle your business insurance needs. Understanding the differences between the two will help you determine which one is best suited for your business and your needs.

Captive Agents

A captive agent is someone who represents a single insurance company. Part of a captive agent’s agreement is that only one company’s coverage, services and products are offered to clients and potential clients.

Independent Agents

Independent agents, such as those on the Trusted Choice® network, can offer coverage from a variety of different providers. In most cases, independent agents can provide clients with more options, as well as cost savings, given the variety of insurance providers they represent.

Independent agents are able to shop around to ensure you get the best possible blend of coverage coupled with rates. You are most likely busy operating your business. Instead of spending endless hours finding quotes from insurance companies, you can let an independent agent take care of this for you.

In addition, an experienced independent agent can provide you with guidance as it relates to your particular business insurance needs. There are many situations when combining various types of insurance policies can save your business substantial amounts of money. As no two businesses face exactly the same risks, knowledgeable independent insurance agents can help identify your unique liabilities and insurance needs.

Independent Insurance Agencies Meeting Your Business Insurance Needs

A recent study of The South Group, an independent insurance company in Mississippi, shows that 70 percent of their current clients are business owners. This is a significant increase for the company, which mostly dealt with personal insurance policies in the past. In fact, some independent insurance agencies, such as Trusted Choice, are devoted to retaining knowledgeable agents who have carved out an expertise in certain industries, such as the agriculture business, jewelers, and anything in between. These agents can give clients niche-specific service to ensure they receive the coverage and protection they need.

Advantages of Using Independent Insurance Agents for Your Business Insurance Needs

Savvy business owners are turning to independent insurance agents for their business insurance needs because they:

  • Offer a Larger Selection

One of the most obvious advantages of working with independent agents is that you have access to more choices. Independent agents will present you with a number of options, which means you’re likely to see policies that will cover the needs of your business at prices that fit your budget.

  • Are More Affordable

Business insurance purchased from independent agencies typically involves cost savings. An independent insurance agent will work to find the best deal for you, instead of focusing on the product selection available from a single provider. This will you save money on premiums, while still giving you the protection you need.

  • Offer Unbiased Advice

When you work with captive insurance agents, you need to keep in mind that they are limited by the options that they can present to you, since the only things they can sell you are products from the companies they represent. When you use an independent insurance agency, your business insurance agent will provide you with unbiased advice. The agent works for you, not those other guys. Some Trusted Choice agents are trained experts in the field and can provide you with the most relevant information possible so that you can make smart decisions regarding your business and your insurance needs. They will work with you to narrow down available options based on your requirements.

  • Can Assist with Claims

When you have an insurance claim, an independent agent will help you through the process. Unfortunately, more often than not, a captive agent will leave you to wade through the waters alone. It’s also important to note that independent agents don’t have to adhere to the strict protocols that typical traditional agents must follow. With the complicated nature of the insurance world and the specialized language, having a person you can call to ask for advice is a huge benefit.

Even more beneficial, however, is the fact that independent business insurance agents are advocates for their clients. Remember, a Trusted Choice agent works for you, not the insurance company, ensuring the best possible outcome in your interests.

Captive Agent Disadvantages for Business Insurance Policies

If you make the decision to work with a captive agent, you may run into a number of problems that are difficult, if not impossible, to overcome, including the inability to:

  • Purchase an insurance product because the parent company does not offer it
  • Take advantage of competitive prices due to a limited number of options

Additionally, there are many instances when captive insurance agents are forced to sell a certain product simply because the parent company asks them to do so. This can lead to pressure tactics that attempt to sell you more insurance than you truly need.

Independent Insurance Agencies – Are They Right for Your Business?

The big question that you have to ask yourself when it comes to finding the best business insurance is what is best for your business. The complexity of the issue stems from the fact that the answer is not the same for every business; your company will have a unique set of needs that is yours and yours alone. If you want flexibility, options and superior customer service, independent agencies on the Trusted Choice network are the perfect choice. After all, when it comes to running your business, time is money, which means you need to optimize every minute of every day.

These agents ensure your business is protected with the coverage that you need to safeguard your investment. Working with an independent business insurance company means personalized service, a variety of options and flexibility to choose a policy that will provide you with the best possible coverage at the best possible price, which will ultimately benefit you – and your business.

What You Need in Restaurant Insurance

Tuesday, July 22nd, 2014

As a restaurant owner, what you need in restaurant insurance probably includes coverage for your building, your business personal property, the personal property of others in your care, liability and employee on-the-job injuries.

And that is probably just the beginning since restaurants face some pretty unique risks. Below are some common industry risks that can help you think about what you need in restaurant insurance. Not every insurer or policy offers coverage for each one, so it’s important to have an idea of what you really need in restaurant insurance when you’re shopping for coverage.

This is a chart of what you need in restaurant insurance.

A few of the other coverages that restaurant owners often need include coverage for property damage related to an off-premises utility failure; employee dishonesty and theft; sewer and drain backup; and dish and glass breakage.

As you can see, restaurant insurance is important—and complex. To get some peace of mind about your coverage, it’s important to speak with an insurance professional. Melendez Insurance has a program that includes products and services specifically developed to provide restaurant owners with the protection they really need. Contact us for a free quote.

Video: What You Need in Business Insurance

Wednesday, June 25th, 2014

Whether you’re the owner of a small home-based business or the owner of a company, you face unique risks as a business owner. That’s why it’s so important to have the right coverage and to find a trusted insurance agent who will help you close any potential coverage gaps.

Watch the video above to learn about which coverages you need in business insurance. Also keep in mind that certain changes and situations should prompt you to review your business insurance policy.

Insurance for Home-Based Businesses

Wednesday, September 25th, 2013


The rise of the personal computer and the large number of jobs lost during the recession drove many Americans to set up shop in their homes. Today, the U.S. Small Business Administration reports that home-based businesses now account for half of all businesses in the United States.

Yet many new home-based business owners forget to buy one very important thing: insurance.

A 2004 study commissioned by the Independent Insurance Agents & Brokers of America revealed that nearly 60 percent of home-based business owners didn’t have enough insurance to protect their businesses.

“When people are working out of their house, they think ‘Well, I have homeowners coverage,” says Terry McConnell, vice president, Personal Lines Underwriting. “But the homeowners policy hardly ever covers the business.”

What homeowners policies don’t cover

Many—though not all—homepreneurs need extra protection beyond their homeowners policies. That’s because most homeowners policies lack these important coverages:

      • Business personal property
        Most homeowners policies provide limited coverage of $500 to $1,000 for tools, machines or other equipment you use exclusively for your business. If your belongings are worth more, you definitely need extra coverage.
      • Premises liability
        Suppose you cut hair in your basement, and a customer trips and falls over a misplaced basketball. That customer might sue you. If he does, you’ll want premises liability since your homeowners policy won’t cover a liability claim filed by a business client.If the injured customer is a friend who was lingering around after the haircut for coffee, you might still be on the line. “If there’s no business policy in force, there is a gray area in this situation,” says McConnell. “But if you have both types of insurance, you’ll be assured of being covered.” When it comes to liability, it’s better to be safe than sorry since these claims tend to be the most expensive.
      • Off-premises liabilityIf you think that an accident that doesn’t happen on your property isn’t your problem, think again. Home-based business owners are often liable for injuries their clients or their clients’ property sustains away from their home. For example, a real estate agent could be liable for injuries a potential buyer sustains during a home showing.
      • Professional liability
        Businesses that offer professional services or advice also should consider purchasing professional liability coverage. Professional liability provides coverage for negligence claims as well as defense costs of lawsuits, even if they’re groundless.
      • Business income and extra expenses
        Business income coverage ensures you receive your regular income when a covered loss damages your premises. Extra expenses kicks in if you need to temporarily rent space or equipment after a covered loss.

Three ways to get the coverage you need

If you need more coverage than your homeowners policy offers, you’ll need to consider the size of your business, the kind of work you do, how many clients visit your home and how often you work off-premises.

The three most common coverage options include:

      • Homeowners policy endorsement
        An endorsement is often the best option for smaller operations with minimal business property and client visitations. For starters, it increases the level of protection for your business personal property. You can also purchase business liability insurance if a small number of visitors come to your home.
      • In-home business policy
        This option often works best for a mid-sized business with pricier equipment and a steadier stream of clients visiting a home. Most policies reimburse you for the loss of important papers and records, accounts receivable and off-site business property. Some even include business income and extra expenses and cover a small number of full-time employees.
      • Businessowners policy (BOP)
        If you have more than a handful of employees, a lot of costly tools or equipment, or a need for a high level of liability coverage, a BOP is probably your best bet. That’s because it offers the broadest amounts of coverage for business property and equipment, loss of income, extra expenses and liability.

A BOP policy should be purchased in addition to a homeowners policy since a homeowners policy is still needed to cover the building, personal property and personal liability that’s not covered by the BOP policy.

Depending on which policy you choose, you might also want to consider these extra coverages offered from ERIE’s affordable, full coverage protection for businesses of all sizes.: