US Recalls Reached Records in 2022

   |   By  |  0 Comments

Grocery store shelves with the word "Recall" over them

A recent article from Burns & Wilcox revealed that US recalls reached record highs in 2022, where the food and pharmaceutical industries hit the hardest. This is a worrying trend for businesses in these industries, as recalls can have serious financial and reputational consequences.

We’ll explore why having the right insurance coverage is essential in protecting businesses from the risks of recalls.

Recalls can be costly and damaging for businesses, with direct costs such as product disposal, refunds or exchanges, and legal fees.

 Indirect costs can include lost revenue, damage to reputation, and decreased consumer confidence.

 In the food and pharmaceutical industries, recalls can also pose a significant health risk to consumers.

At Allied Insurance Managers, we offer a range of insurance solutions for businesses in these industries.

 For example:

  •  Our business liability insurance protects your business against formal lawsuits or third-party claims. This type of liability coverage will also cover any legal expenses related to your legal defense.
  •  Our product recall policy can assess your needs and recommend the products that would fit best into your risk management plan.

To minimize the risks of recalls, businesses should have a recall plan in place that outlines the steps to take in the event of a recall. Regular quality control checks can also help detect and prevent potential issues before they escalate. Working with an experienced insurance broker such as Allied Insurance Managers can help businesses identify their specific risks and insurance needs and ensure they have adequate coverage in place.

If you’re in the food or pharmaceutical industry, NOW is the time to review your insurance coverage and ensure you’re protected from the risks of recalls. At Allied Insurance Managers, we’re here to help.

What is the Value of Your Business?

   |   By  |  0 Comments

As a business owner

In the second quarter of 2021, more than 2,000 small businesses were sold. The median sale price was roughly $320,000, up 12% from the same time last year.1

Finding the Value of Your Business

As a business owner, ascertaining the value of your business is important for a variety of reasons, including business succession, estate tax estimates, or qualifying for a loan.

There are a number of valuation techniques, ranging from the simple to the very complex. Outlined below are three different approaches to valuing a business.

  • Asset Based: Calculates the value of all tangible and intangible assets held by the business. This approach ignores the future earning potential of the company. Thus, a pure asset-based valuation model is often used for companies that are bankrupt or looking to liquidate.
  • Earnings Based: Seeks to arrive at a business’ value by applying a multiple to normalized earnings, i.e., earnings adjusted to subtract owner’s compensation and related expenses. The multiplier can vary substantially, depending upon the industry and the outlook for the business.
  • Market Based: Compares the business to recent sales of similar companies.

Business valuation is not just a formulaic exercise. For instance, there is a value to the business of being a “going concern” as opposed to the start-up alternative. Ownership percentage will also matter; purchasing a minority share that has limited control may result in a discount to the actual value. The prospects for the business can impact its value. A greater premium will likely apply to a company engaged in a leading-edge technology than it would to one involved in a mature market.

Valuing a small business is not an exact science. Some aspects of the valuation may be debatable (e.g., the remaining life expectancy of a machine), while other aspects may be positively subjective (e.g., the value of the company’s reputation).

Willing Seller & Buyer

The true value of anything can only be determined when a willing seller and a willing buyer agree on a price of exchange. As a consequence, any valuation exercise may yield only a rough estimate.

Before moving forward with a business valuation, consider working with legal and tax professionals who are familiar with the process. Also, a qualified business appraiser may be able to offer some valuable insight.

 

Do you have more questions about determining the value of your business and protecting your assets? Our team is happy to help! Click here to receive a quote.

This article originally written by our partners, West Bend Mutual Insurance Company.

1. BizBuySell.com, 2021

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.

 

 

Keep Your Umbrella Handy

   |   By  |  0 Comments

Umbrella liability can be a fairly inexpensive way to help shelter current assets and future income from the unexpected. Read to learn more!

In 2021, the U.S. had a record 24.5 million millionaires, up from 202 million in the previous year. An increase in personal wealth may bring greater financial flexibility; it may also bring greater liability. Individuals with high net worth, or those who are perceived to have high net worth, may be more likely to be sued. And personal injury claims can cost millions.1

What is Umbrella Liability Insurance?

Umbrella liability insurance is designed to put an extra layer of protection between your assets and a potential lawsuit. It provides coverage over and above existing automobile and homeowners insurance limits.

For example, imagine your teenage son borrows your car and gets in an accident, seriously injuring the other driver. The accident results in a lawsuit and a $1 million judgment against you. If your car insurance policy has a liability limit of $500,000, that much should be covered. If you have additional umbrella liability coverage, your policy can be designed to kick in and cover the rest. Without umbrella coverage, you may be responsible for paying out of pocket for the other $500,000, which could mean liquidating assets, losing the equity in your home, or even having your wages garnished.

Umbrella liability insurance is usually sold in increments of $1 million and generally costs just a few hundred dollars a year. It typically covers a broad range of scenarios, including bodily injuries, property damage caused by you or a member of your household, and even libel, slander, false arrest, and defamation of character.

Deciding whether liability coverage is right for you may be a question of lifestyle. You might consider buying a policy if you:

  • Entertain frequently and serve your guests alcohol
  • Operate a business out of your home
  • Give interviews that may be published
  • Drive a lot of miles or have teenage drivers
  • Live in a manner that gives the appearance of wealth
  • Have a dog, especially if the breed is known to be aggressive
  • Own jet skis, a boat, motorcycles, or snowmobiles

Even if you don’t yet have a tent in the millionaire camp, you may want to consider the benefits of liability insurance. You don’t have to be a millionaire to be sued for a million dollars. Anyone who is carefully building a financial portfolio may want to limit their exposure to risk. Umbrella liability can be a fairly inexpensive way to help shelter current assets and future income from the unexpected.

This is a simplified description of coverage. All statements made are subject to the provisions, exclusions, conditions, and limitations of applicable insurance policies. Please refer to actual policy documents for complete details regarding coverage.

Who’s Got What?

In 2021, there were over 74 million adults in the United States whose net worth was in the $100,000 to $1 million range (excluding primary residence). Less than 25 million adults had a net worth of $1 million or more.1

Have more questions about umbrella liability coverage? Our team is happy to help! Click here to receive a quote.

 

This article was originally written by our partners, West Bend Mutual Insurance Company.

1. Credit-Suisse.com, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2023 FMG Suite.