CARE Act and Economic Injury Disaster Loan

The CARES Act was signed into law today. The SBA Economic Injury Disaster Loan (EIDL) program has been accepting applications for about three weeks. The EIDL application is complicated and requires extensive information to be submitted both at the application stage and during the process of the loan request.

EIDL provides up to $2Million and rates are: 3.75% 30yrs PROFIT Businesses; 2.75% 30yrs NON-PROFIT Organizations

ALL business owners negatively impacted should immediately apply for EIDL assistance. You can find the application on SBA.gov and click on the amber-colored COVID-19 banner at the top of the page. Download the
application forms, complete and sign, and upload with accompanying documentation. Be thorough for the best chance of speed and success. ALSO: check off ONLY EIDL financing otherwise your application will be held up.

From our CPA James Henderson, there are many solutions for business owners.  Some are external.  Like loans, SBA or otherwise, loan modifications, tax credits, grants and vendor/landlord accommodations.  Some are internal, like expense management, cash flow projections/management, client revenue deferral, new service offerings, and staff lay-offs.  This crisis times scream for a holistic coordinated/planned approach, rather than a knee-jerk “get a quick loan for cheap” approach

I have viewed many of the seminars regarding the SBA EIDL and CARES act financing, and have several clients engaged in the process.  One thing that has come up over and over again is the necessary involvement of the business owner’s CPA valued advisor to get the right program in place depending on a client’s particular circumstance.  There are payroll tax credits available for retaining your workforce.  And with some deeper dive, probably a lot more.

If you do not work with a CPA, our friends at Aurora Consulting are offering free advice and an affordable consulting fee if a business needs their direct assistance to collate the information and complete and submit the application to SBA. SBA allows a consulting fee up to $2500 maximum. Linda and Trevor have agreed that they will charge only $750.00 as their consulting fee to complete and submit an EIDL application. They will accept a $250.00 upfront payment with the balance due later at a date to be agreed upon by both parties. They don’t want to negatively impact your already-strangled cashflow and are willing to work with anyone who needs their assistance. Basic advice and guidance is free of charge.

They attended a webinar provided by the Governor of Connecticut, Ned Lamont, to discuss the basics of the CARES Act to provide assistance to business owners.  

Here are highlights from the webinar with more to follow in another newsletter soon:

CARES Act website is not active yet

SBA.gov website does not yet have CARES Act information 

Programs will not be available for a week or two

It is recommended to apply for BOTH EIDL and CARES Act financing. Get the applications in process. Once a determination is made for approval, you should then choose which of the two loans works best for your needs.

CARES Act Loans are basically an SBA 7a Loans up to $5MM, short term loans that will be converted to grants if you retain employees.

Employee Retention: this has been most actively discussed in the media and seems to be a priority of the CARES Act financing options. That leads to other questions about how to qualify and that aspect remains to be seen based on the soon-to-be-released CARES Act guidelines from SBA

RECORD KEEPING: Step up the quality of your record-keeping in terms of Employees and Operating Expenses. A mention was made that “forgiveness” of the loan will be decided after an interview and query for proof or Employee retention and that funds were used for Operating Expenses.

SBA does not yet have a timeline when the Lender guidelines will be available to follow for lending but there is an urgent priority within SBA to coalesce the information from the CARES Act and to get information to SBA Lenders

501C3 organizations are eligible under EIDL and CARES Act 

500 employees or less

They are looking to access the Small Business Owners Guide for CARES Act which should be available tonight and we will share pertinent information with you in other email newsletter updates

Linda and Trevor have been fielding calls and queries from anxious business owners all week. They are doing their best to parse the information and get ACCURATE information to you. We strongly recommend you slow-down your decision-making. We’ve already seen some business owners making bad decisions to obtain capital out of desperation. We use the phrase “EVER-EVOLVING” to describe the lending atmosphere in general, and the emergency programs specifically.

Please contact Aurora Consulting and mention that you received this message from us, please SHARE this email with anyone you feel may find the information useful.

Please reply to this message should you have any additional questions!

The Essential Insurance Checklist for Massachusetts Restaurants

The Massachusetts restaurant industry is thriving, and you have invested substantial time and money into launching a successful eatery. It is important to protect your investment, but the dining industry poses certain risks that may not be covered by standard commercial property, general liability, or workers’ compensation insurance policies.

Owner of a restaurant standing in the doorway of her restaurant

Restaurant entrepreneurs should be aware of several specialized coverages available to them:

  • Product Liability Coverage: The food-service industry demands rigorous health and safety standards. However, even with sound food-handling protocols, foodborne illness may strike and make guests ill. Also, cross-contamination in the kitchen may trigger allergic reactions in some diners. Product liability coverage can help insure against claims made by guests who become ill from eating at your restaurant.
  • Equipment Breakdown Insurance: Restaurant equipment can be expensive to own, lease, maintain, and repair. Unfortunately, this expensive equipment can break down or fail as a result of weather events or a power surge. Equipment breakdown insurance can help you cover out-of-pocket costs associated with certain instances of equipment failure.
  • Food Contamination Coverage: This insurance may protect against losses arising from spoilage resulting from mechanical or power failure.
  • Liquor Liability Insurance: If you serve alcohol, you should already maintain the liquor liability insurance required by Massachusetts law. However, you will want to check your limits and exclusions and make sure you are covered for both your on-site and catering activities.
  • Loss of Business Income Insurance: If your business is closed for any period of time because of property damage or severe weather, loss of business income insurance may help bridge gaps in income so you can meet your financial obligations.  
  • Commercial Auto Insurance: You may need commercial auto insurance for company-owned vehicles like food trucks or catering vans that employees drive. If your employees use their personal vehicles to deliver food, you may require hired and non-owned auto insurance to protect against accidents caused by the employee in the course of his delivery duties.
  • Additional Coverage: Your restaurant likely has furniture, furnishings, and artwork, and you will want contents coverage to help pay the cost of replacing these items in the event of damage or destruction. If you lease the building in which your eatery operates, you may also need betterment coverage. This coverage provides protection against loss or damage to fixtures or improvements you have made to the space.

A restaurateur who owns her building will have different insurance needs than one who leases space in a food court. Similarly, a steakhouse that offers a selection of expensive wines may require different coverage than a deli that serves paper-wrapped sandwiches. Contact the local experts at Vargas & Vargas Insurance to ask about a customized insurance package that is suited to your specific needs.

Should I Buy Earthquake Coverage?

At Vargas & Vargas Insurance, our job is to provide the right insurance policies to protect your investment into your home and to protect your family and belongings. Today, we’re talking about earthquake insurance. Before we get any farther, we should point out that most dwelling policies don’t include earthquake coverage. In other words, if a huge 8.1-magnitude earthquake were to rumble through Massachusetts and toppled your home to rubble, you would not be covered with a standard homeowner’s policy.

mother and daughter inside a kitchen

Earthquake coverage is a rider that can be added to any home insurance policy. It’s worth the money if you ever experience a significant loss, and it’s certainly worth the peace of mind.

Does Massachusetts Experience Earthquakes?

Yes! According to the Northeast States Emergency Consortium (NESEC), the state has felt 408 earthquakes over the last 450 years. That’s almost one per year on average. Earthquakes occurring in surrounding states, and even as far as Quebec, Canada, have been felt in Massachusetts, too. 

Even though our earthquake history in recent years isn’t as scary as in other states like California, Massachusetts homeowners are always at risk of earthquake loss. Preparing for one now can protect your home later.

On Home Valuations and Earthquake Deductibles

Earthquake insurance is written based on the replacement cost of your home, not the purchase price or property tax valuation. In other words, your company will insure your home based on what it will cost to build a new home from the ground up, just like through your general homeowner’s policy.

However, deductibles work differently with earthquake insurance. You can choose your deductible to be 5%, 10%, 15%, 20%, or 25%. It’s vital that you understand these deductibles as they relate to a loss.

For example, let’s say your home replacement cost is $250,000. A 10% deductible is $25,000. Earthquake insurance won’t come into play for a small loss. If a small earthquake occurs and breaks all your dishes and some windows, the damage won’t be more than your deductible of $25,000. However, if your entire home were to turn to a pile of rubble, you’d be entitled to a check for $225,000.

Ultimately, the choice to insure your home against earthquake damage is entirely up to you. It’s an affordable addition to any homeowner policy, but it’s important to choose the right coverage for your specific property. Reach out to a licensed insurance agent at Vargas & Vargas Insurance today to learn more.

Coronavirus (Covid-19) Update

The safety of our clients and team has always been our first priority. The #coronavirus (COVID-19) has likely had an impact on our personal and business lives, and we continue to monitor this evolving situation closely.

Vargas & Vargas Insurance is prepared to have our staff work from home and will follow all instructions set forth by federal and state authorities. 

We will be able to provide the same service and customer care as we have in the past. However, the situation is very fluid and we trust you will understand if it takes a little longer than usual to respond to you. There are various ways to reach our team:

Via a call 617-298-0655
Via a text 617-409-0329
Via our service center, click here
Via our website, www.vargasinsurance.com
Via an email to customerservice@vargasinsurance.com
Or, Click here to access our online customer service center to view your insurance policies, print insurance ID cards, update your contact information, download documents, and so much more.

If you have traveled to ​China, Iran, South Korea, Italy, Japan, Hong Kong​ or have been in contact with someone who is ill because the incubation period for this virus is two weeks. Please refer to the CDC website or mass.gov as resources for any updates and refrain from any interactions with the public.

The best way to help yourself and others from spreading the virus is to practice good prevention methods.

1. Wash your hands frequently with soap and hot water for at least 20 seconds.
2. Use hand sanitizer when unable to wash your hands.
3. Sneeze and cough into your elbow, not your hands!
4. Avoid touching your face (eyes, nose, and mouth) with unwashed hands.
5. Stay home if you are feeling sick and avoid close contact with others who may be sick.
6. Clean and disinfect frequently touched objects (including cell phones).

If you are experiencing the above symptoms, please seek medical attention right away and call the healthcare facility ahead to let them know you are coming!

It is more important than ever to strengthen our social bonds. Seniors face particular health risk from this virus, yet taking precautions only reinforces social isolation. Please take the time to call, text, or send a message to your neighbors. Ask if any elderly friends or neighbors need help with grocery shopping. Remind them to stock up on prescriptions and to make provisions for child care in case they may need to seek treatment. Consider setting up a phone tree or email list for your block so that people can be in touch about what they need.

Stay healthy, wash those hands and let’s remember our neighbors!

How to Keep Your Home Safe From Burglary While on Vacation

family packing for a vacation

When it’s time to pack up your suitcase and head out of a town for some much-needed R&R, the last thing you want to think about is your home’s security. In reality, however, burglars prey on houses that are obviously left unattended for extended periods of time. Taking a few simple steps before you leave town can ensure that your home and property remains intact while you are away, both from trespassers and home disasters.

Be Mindful on Social Media

You’d be surprised what people take note of on social media. Don’t publicize specifics about going out of town before or during your trip. Likewise, if you receive expensive gifts over the holidays and are soon leaving town, don’t post them on your account. Burglars look for easy targets like these.

Keep Valuables out of Sight

Close your blinds and curtains before you leave, so outsiders can’t see what’s inside. This won’t just prevent burglars from spotting valuables, such as electronics. It will also make it more difficult for them to view additional points of entry to break into.

Forward Mail and Packages

If you are expecting packages from online shopping or know your mailbox will be overflowing before your return, take the time to temporarily forward your mail to your work or a friend’s house. Packages left unattended on the front porch are not only at risk of being stolen. They are a sure sign that no one is home to retrieve them.

Have a Neighbor Watch Your Home

Ask a trusted neighbor or friend to stop by your home a few times throughout your trip. They can turn on the lights, move your car, or simply ensure that everything looks secure. Giving the impression that someone has been home is an effective deterrent to thieves.

Use Light Sensors and Timers

Installing timers and motion sensors on indoor and outdoor lights is an effective security strategy. It will make sure that anyone lurking around your yard or house is seen, as well as indicate to any potential burglars that someone might be home. 

Don’t let your vacation end on a sour note by coming home to an empty or ransacked house. With these simple steps, you can reduce the risks of theft while you’re away. However, even the most cautious vacationers can experience a burglary or home invasion. Talk to our team today about the right home insurance coverage to give you more peace of mind.

Why You Should Buy Flood Insurance for Your Massachusetts Home

Floods happen far more often than most people realize. In the United States, flooding is a factor in 90 percent of natural disasters. Unfortunately, home insurance policies do not cover flood-related losses. That’s a fact that some homeowners only find out after they’ve experienced property loss from a flood. At Vargas & Vargas Insurance, we’re here to help you protect your property before a flood.

mother and child gardening in the backyard of their Massachusetts home

Why You Need Flood Insurance in Massachusetts

Although properties on the Massachusetts coast have a higher flood risk, flood insurance isn’t just for people who live there. No matter what part of Massachusetts your house or condo is located in, you need flood insurance.

The National Flood Insurance Program (NFIP) has a popular adage that goes: “Where it can rain, it can flood.” It’s another way of saying every home is at risk of flooding. While your home may have a lower or higher risk than other properties, a home with no risk of a flood doesn’t exist.

In fact, flood insurance claims for properties in low-risk areas are commonplace. FEMA reports more than 1 in 5 NFIP claims are associated with properties that aren’t in the high-risk zones. 

If your home is in a high-risk flood plain, you need to know what that risk level means in practical terms. According to the Massachusetts Division of Insurance, that risk level means you have a 26 percent risk of a flood damaging your property over the course of a 30-year mortgage.

Consider the town of Northampton in western Massachusetts. Many years ago, mid-March warming caused winter’s ice and snow to melt so rapidly that the Connecticut River overflowed to the extent that Northampton flooded. Today, Northampton officials are concerned that climate change could cause the town to flood again. Town officials are currently working diligently to prevent a repeat of that historic flooding. Homeowners should protect themselves for the risk of a flood in any season.

How to Get Flood Insurance

If climate change or another weather event brings flooding to your community, it’s important to be prepared. Flood insurance policies typically take 30 days to go into effect. Therefore, now is a good time to contact your local independent insurance agent to discuss your options for flood insurance coverage.  

Do I Need Professional Liability or E&O Insurance in Massachusetts?

In a nutshell, Errors and Omissions (E&O) insurance is a professional liability insurance policy created to protect professionals, employers, and employees from claims of inadequate work or negligence. Here in Massachusetts, it’s a useful policy for professionals who work with contracts, finances, investments, and other risks. 

group of professionals conversing and looking at a file

In other words, if your organization could get sued for giving bad advice, or even making an honest mistake on paperwork, E&O insurance is for you. Choosing the right coverage can be complicated, so Vargas & Vargas is here to help.

Businesses That Should Have Professional Liability Insurance

Examples of organizations that should always have professional liability or errors and omissions insurance are:

  • Realtors and real estate agents
  • Insurance agents
  • Investment specialists and stockbrokers
  • Retirement planners
  • Funeral homes and funeral directors
  • CPAs and contracted bookkeepers
  • Homebuilders
  • Some businesses in the manufacturing sector
  • Medical professionals

How E&O Insurance Works

Let’s imagine you own a small retirement planning firm in Massachusetts. You have two fully licensed employees. During the flu season, you and one employee are both out sick for a whole week, leaving a single employee to run the office. She’s an excellent employee. You trust her, and so do your clients.

However, the workload is too much, and your good employee makes a few honest mistakes. She provides inaccurate projections to one family and accidentally gives them the wrong answers for what their whole life insurance policies will be worth in a year. Of course, she does this all via email, and your clients have proof of her statements.

All is well until next year when those customers come back to complain they were given the wrong information! They were expecting to have much better results from their investments. They get together and hire a lawyer to sue your business.

This is when your errors and omissions coverage comes into play. It will cover your court costs (up to the limits on the policy). If you need to hire a lawyer and end up paying the difference to these clients, E&O has you covered.

Does My Business Have Enough E&O Coverage?

You’ve worked hard, and your business is growing. Congratulations! It’s probably time to review all of your commercial policies, including your Business Owners Policy (BOP), commercial liability, and errors & omissions coverage. Get in touch with us today to speak with a Massachusetts licensed insurance agent. We’d love to review your policies and get you a free quote. 

Warning for Jewelry Owners: How to Avoid Fake Gem Lab Reports

Near the end of 2019, the Accredited Gemologists Association (AGA) issued an alert to consumers and its industry. The AGA had learned fake gem lab reports are circulating that feature the unauthorized use of AGA’s logo. AGA’s notice is similar to an announcement the Asian Institute of Gemological Sciences issued in 2018, when that organization became aware of fraudulent lab reports bearing its logo. The following tips can help jewelry owners and consumers avoid fake gem lab reports.

couple looking at watches in a jewelry store

1. An “AGA Lab Report” Is Always a Fake

Any report supposedly issued by the Accredited Gemologists Association or bears AGA’s logo is always a fraudulent report. The AGA is not a lab. The organization never issues gem lab reports.

2. Look Carefully at the Lab’s Name

Frequently, fraudulent labs try to confuse the public by using a name that’s very similar to the name of a respected laboratory. According to Jewelry Insurance Issues, a newsletter for the insurance industry, fake labs are using names such as GIE and GLA to mimic the name of the well-known and highly-respected GIA.

3. Research the Lab Report Number

Gem lab report numbers are checked easily online. Jewelry owners can enter the report number on the websites of trustworthy gem labs like the Gemological Institute of America (GIA), Gem Certification and Assurance Laband American Gem Society Lab. Researching the report number may reveal conclusions such as:

  • No such report number exists.
  • The number is associated with a report that describes a different gem.
  • Your report is authentic.

4. Learn Other Signs of a Fake Gem Lab Report

Reputable labs do not assign a value to the gem or carry a retailer’s logo. If either appears on the gem report, the report has not been issued by a reliable, independent gem lab. 

The Takeaway

A gem lab report from an unreliable or nonexistent gem lab is completely worthless. Jewelry owners need to seek the services of a qualified gemologist who also has insurance appraisal training. The AGA maintains an online directory of accredited gemologists that can be sorted by state.

Your jewelry needs to be appraised to be properly insured at the right value. When you purchase new jewelry or receive jewelry as a gift, you should always notify your local independent insurance agent.

The Financial Benefits of Getting Life Insurance Early

Young adults can save a significant amount of money by obtaining life insurance before they turn age 35. Yet, most young adults miss this opportunity. If you’re in your twenties or early thirties, it’s important to consider the financial advantages of getting life insurance now. 

Your Total Lifetime Cost Is Lower

Age is the primary factor insurers use to determine the amount of your life insurance premium. Generally, the cost of life insurance increases with each year of age. For term life insurance policies, the premium remains the same for the duration of the policy. Someone who purchases term life insurance as a young adult could potentially pay thousands of dollars less than someone who buys the same coverage at an older age.

To illustrate this, let’s meet Robert and Matthew. Matthew is a healthy 30-year-old man. He purchases a 30-year term life insurance policy for $299 a year with a $250,000 benefit. His 40-year-old brother Robert is in good health, too, and he decides to get a policy with the same term and coverage amount. Robert pays a $442 a year.

Although they bought the same coverage, Matthew saves $4,290 because of his age. Also, since Matthew’s annual premium is lower, his youth would give him the advantage of paying less overall — even if he had a longer coverage period than Robert.

Good Health Has a Financial Benefit

Your health also has an impact on how much you’ll pay for life insurance premiums. Adults under age 36 are more likely to be in good health. It’s the period in your life when you’re least likely to have chronic health conditions like obesity, diabetes, or hypertension. Chronic illnesses raise the cost of life insurance.

In summary, as a young adult, you have a window to reap an incredible financial benefit by not waiting to get life insurance. Contact us today to learn more about our term life, whole life, and universal life insurance services.

These Home Improvement Projects Can Raise and Lower Your Insurance Rates

If you’re updating your home, you may have to make updates to your home insurance policy, as well. When you increase the value of your home, such as by adding square footage or doing a major bathroom renovation, you need to make sure you don’t end up underinsured. Your current policy was designed to cover the cost of rebuilding, and it needs to reflect your home’s current value accurately.

Also, some home improvement projects can actually lower your premiums if they make you less likely to file a claim. By not upgrading your policy, you could miss out on these substantial savings.

Women setting the alarm on her home security system

Take a look at some home upgrades that will require modifying your insurance policy.

Home Improvement Projects That Increase the Value of Your Home

If you purchased your policy when you had laminate countertops and decided to upgrade to marble and high-end appliances, you added tens of thousands of dollars to your home’s value. But, if you don’t inform your insurance company, you’re left in a very vulnerable position if the worst happens and you need to file a claim. Purchasing more coverage protects the value of your home and ensures you get an adequate payout to replace any covered damage. The same is true for adding livable square footage by renovating a basement or building an addition.

If you add a pool, updating your insurance becomes crucial: swimming pools are a potential hazard. To have peace of mind, consider adding liability insurance included in your policy.

Upgrades That Can Lower Your Premiums

Your home insurance policy isn’t just calculated based on your home’s value. It also considers how likely you are to file a claim. Getting a new roof can help you qualify for a lower rate, especially if you have an older home. Roof damage from rain and snow is one of the biggest reasons that homeowners file a claim, and your roof is now better able to withstand extreme weather.

Upgrades to your security, such as a burglar alarm, are another potential investment that can lower your rate. Modernizing older heating, plumbing, or electrical systems can result in a discount if there’s less risk of fire or water damage.  

At Vargas & Vargas Insurance, we’ll be glad to give you detailed guidance about the right policy for your current home’s value.