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COVID-19 / Novel Coronavirus Pandemic Insurance response

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Dear Valued R.K. Tongue Co. Client,

Over the last week, The U.S. Federal Government, State Governors and Senior Officials throughout most of the U.S. have declared states of emergency, closed schools, cancelled large gatherings and banned or restricted travel.  Most business-owners and employees of U.S. corporations are confronting the prospect of decreased revenues, supply shortages, and possible closure or remote-work mandates.  Many of those business-owners and employees are looking to their risk management and insurance professionals for guidance.

In these unprecedented times, the R.K. Tongue Co., Inc. (RKT) team takes its risk management and insurance advisory role seriously.  We have already begun implementing business continuity plans to facilitate our ongoing ability to serve your insurance needs.  Additionally, and based on recurring questions, we have put together the following FAQ response and general assessment of the U.S. Domestic insurance landscape as it applies to viral outbreaks and pandemics:

  • Commercial business interruption insurance generally specifies direct physical damage to a covered property as a coverage trigger. A pandemic does not constitute direct physical damage in the context of commercial property & casualty insurance
  • Employees who contract the novel coronavirus virus due to a work-related exposure, may experience a covered workers comp/employer’s liability claim
  • If a business-owner or an employee gets sick or needs testing, such medical needs are likely a covered health insurance claim
  • The effects of the novel coronavirus and related COVID-19 disease are likely to be covered by short-term disability and may possibly be a covered long-term disability income and/or overhead expense disability claim if the sickness lasts long enough to meet applicable waiting periods
  • Specific “pandemic insurance” for business interruption is generally rare.  RKT has recently become aware of a London-based specialty market that may offer insurance protection for future pandemics, but this insurance cannot be purchased during an ongoing viral outbreak/pandemic.  RKT was also recently made aware of a Canadian insurer that offers an optional business interruption insurance rider for pandemics as part of its business insurance policy.  Although we do not know many specifics about this product or its limitations and exclusions, we know that it is not available in the U.S.

Because news about the novel coronavirus breaks rapidly and the response to the pandemic is so fluid, we encourage you to contact our office or the concerned insurance company directly if you experience an adverse event and need to file a claim. 

We understand and share your concerns, fears, and business challenges.  We will provide updates to you, our valued clients, as circumstances dictate.  Please take all relevant precautions to stay safe and healthy.

VDA Services/VDSC Announces Endorsement of RK Tongue, Co., Inc. for Insurance Services

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The R. K. Tongue Co., Inc. team is excited to welcome more Virginia Dental Association member-dentists to the R. K. Tongue family! Here’s the full endorsement announcement from VDA Services / Virginia Dental Services Corporation (VDSC).

Mar 6, 2019

Effective April 15, 2019

The Virginia Dental Services Corporation (VDSC) Board of Directors is pleased to announce that effective April 15, 2019, RK Tongue, Co. Inc., a family-owned, multi-generation insurance agency based in Baltimore, Maryland will become the endorsed insurance agency for VDA members.

For the past 19 years, the VDSC has recommended B&B Insurance Associates, Inc. of Burke, Virginia. Over that time, the B&B team has served and guided VDA members with their insurance needs. Recently, the agency leadership made the difficult decision to close B&B this spring. Upon learning about the impending closure, the VDSC Board began a thorough review of respected insurance agencies to succeed B&B Insurance as the VDSC endorsed insurance agency.

Importantly, VDA members that are current clients of B&B do not have to worry about any impact on their current insurance policies with the eventual closing of the agency. Dr. Stephen Radcliffe, President of the VDSC Board of Directors, commented on the transition by saying “Ensuring a smooth experience for VDA members throughout this process is the VDSC’s highest priority at this time.” The teams at RK Tongue and B&B are already working together to make the eventual transition nearly seamless for clients.

“In RK Tongue, Co., Inc., the VDSC has found a partner with a very strong presence in Virginia, and notably within the dental profession. The Board was impressed with RK Tongue’s breadth of experience and their commitment to serving VDA members throughout this transition and in the long-term. I have complete confidence in their ability to provide excellent customer service and insurance expertise to all members,” noted Dr. Radcliffe. With over 1,000 dental clients already in Virginia, RK Tongue and their team of dedicated professionals are looking forward to working with even more members of the Virginia Dental Association and providing the excellent customer service that their clients have enjoyed since the agency’s founding in 1911.

With endorsements from both the DC Dental Society and Maryland State Dental Association, RK Tongue has demonstrated a strong commitment to supporting organized dentistry and they have developed expertise in the unique insurance needs of dental professionals. Ed Gerner, President at RK Tongue commented, “We are honored that the VDSC chose to recommend our agency, we appreciate and respect the great responsibility that comes with this endorsement. We have a long history of serving dentists in Virginia and we look forward to building on that experience to serve the members of the VDA.”

VDA members are welcome to contact either B&B (877-832-9113) or RK Tongue (800-638-6353) at any time during the transition to discuss current policies, review coverage or receive a quote for a new policy. Please note RK Tongue will not have direct access to B&B/VDA Services client policy data until after April 15, 2019.

Together, VDA Services/VDSC and RK Tongue are looking forward to providing an excellent long-term benefit for our VDA Members.

VDA Services is a service mark of the Virginia Dental Association. VDA Services is a program brought to you by the Virginia Dental Services Corporation, a for-profit subsidiary of the Virginia Dental Association.

5 Ways to Lower Your Future Tax Bills

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In case you missed it, 5 Ways to Lower Your Future Tax Bills by E. Andrew Gerner, CFP® was originally published as part of the Maryland State Dental Association’s April 2016 e-mail newsletter.

April 1, 2016

5 Things You Can Do Right Now to Lower Your Future Tax Bills

By E. Andrew Gerner, CFP®

I take pride that the Maryland State Dental Association refers its membership to me and my firm for investment and financial advisory matters.  I wish I could work personally with every member, and I’ll never stop trying to do so.  But I’m a realist and the best I can hope to do is work with a reasonable percentage of Maryland Dentists and MSDA members.  If you work with Tongue | GERNER Financial Services, LLC and me now or plan to do so in the future, thank you.  For everyone else who reads this message, I offer some free analgesic for the sting of tax season.

 

1. Establish and fund a qualified or tax-advantaged retirement plan

If you are an employee dentist at a practice that offers a group retirement plan, chances are that you can make tax deductible contributions of at least $12,500 per year to that plan.  Even better, most employer-sponsored retirement plans will offer some amount of matching contribution to your account.

If your employer offers no group retirement plan, you can establish an IRA and contribute $5,500 ($6,500 if you’re age 50 or older) on a pre-tax basis.

Are you an independent contractor?  If you are, you can establish a SEP IRA and contribute as much as 20 – 25% of your adjusted earned income up to $53,000 on a pre-tax basis.  For a dentist in the highest marginal income tax bracket, the maximum SEP IRA contribution could save him or her nearly $21,000 in federal income tax for the year of the contribution.

Are you an employer?  If your personal taxable income, including profit from the practice is under $150,000, a SIMPLE IRA plan is a generally inexpensive and relatively easy-to-administer way to make tax-deferred retirement contributions of $12,500 annually ($15,500 if you’re age 50 or older)

If you are a practice owner with more than $150,000 of personal taxable income, a 401(k) profit-sharing plan may be a great option.  Such plans allow pre-tax deferrals of $18,000 ($24,000 if you’re age 50 or older).  On top of deferrals, employer matching and profit-sharing allocations can allow up to a maximum of $53,000 of tax-deferred contributions.

If you have sufficient income, need to catch-up on your retirement savings, and are looking for even more tax-deferral on retirement contributions, a defined benefit pension plan, when properly designed and administered, can allow up to an additional $210,000 of tax-deferred contributions.

 

2. Implement active tax management in your taxable investment account

If you have brokerage investment accounts or even savings accounts or CDs with sizeable balances, you will generally pay earned income-tax rates on interest. Qualified dividends and capital gains from brokerage accounts are typically taxed at more favorable rates.  Does your financial advisor offer tax management programs designed to lower the effective rate and amount of tax due for the gains and income in your accounts?  If you have $500,000 or more in brokerage account assets, you may be able to benefit from a reduction to the amount of tax due on income and gains in your taxable accounts by utilizing tax management strategies.
3. Hold a portion of your assets in life insurance or an annuity

To the extent that you have a need for the insurance, holding a portion of your investable assets in life insurance or annuities generally provides the benefit of tax-deferral on income and gains, which can help lower your tax liability every year.  Of course, insurance policies provide certain guarantees and charge additional expenses.  A financial professional, and preferably a fiduciary such as a CERTIFIED FINANCIAL PLANNER TM can help you navigate the complex landscape of hybrid insurance/investment products.

 

4. Consider alternative investments with unique tax features

Certain alternative investments, in addition to providing diversification, can offer tax benefits.  Oil and gas development programs, for instance, usually provide for deductibility of the initial amount invested due to payment of intangible drilling costs.  Real Estate Investment Trusts (REITs) with cost segregation features may pass capital depreciation deductions along to investors, thus reducing the tax that would otherwise be due on income derived from the REIT.  It should be noted that many of these programs involve significant risk of loss of principal and are therefore only suited to sophisticated and accredited investors.

 

5. Consider a strategic Roth conversion

If you have significant positive cash-flow but are showing very little taxable income due to a recent practice purchase or start-up, and you have traditional IRA assets, you may be an ideal candidate for converting traditional IRA assets to a Roth IRA.  Such a conversion requires current payment of ordinary income tax on the value of the converted investment assets, but once in a Roth IRA, no additional income tax is due for withdrawals after normal retirement age.

Want more information about any of the topics discussed in this article?  Contact the author:

eagerner@tgadvisor.com

410.752.4008

 

Disclosures:

Neither Woodbury Financial Services, Inc., nor its registered representatives or employees provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.  Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary.  Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.

Securities and Investment Advisory Services offered through Woodbury Financial Services, Inc., Member FINRA/SIPC and Registered Investment Adviser. Additional Insurance Services offered through R.K. Tongue Co., Inc., independent of Woodbury Financial. Tongue | GERNER Financial Services, LLC and Woodbury Financial Services, Inc., are not affiliated entities.

 

Starting or Buying a Business

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Planning for your own business

Before you start your own business or buy an existing business, you should do some initial planning. You may have already decided what type of business you want–your own restaurant, retail outlet, service, or manufacturing plant. You need to choose a suitable location–can you work from home, or do you need a separate facility? You should assess your financial requirements, schedule daily activities, and plan for contingencies, which may be included in your business plan. Planning your business usually requires the help of any number of professionals–an attorney or accountant, for example. The success or failure of your business may depend on your initial planning, but how do you plan and what do you plan for?

Factors to consider when starting your own business

Legal structure

You will have to decide upon the legal structure of your business. For example, will you conduct business as a sole proprietor, or will you instead create an entity separate from yourself, like a corporation, partnership, or limited liability company? Each type of entity has its own characteristics, and the structure you choose will depend on which ones you need. Certain forms of business entity offer limited liability protection, allowing you to protect your personal assets from lawsuits involving the business.

Taxation

Uncle Sam takes a special interest in your business! How you and your business will be taxed is an especially important factor to consider. For example, if you choose a C corporation as your legal structure, you may be subject to a double tax–one tax when the corporation makes a profit and another when those profits are distributed to the owners (shareholders). Alternatively, if you choose a partnership, only the owners (partners) are taxed. For this and many other reasons, tax considerations must be weighed carefully.

Accounting and record keeping

Contrary to what many may believe, accounting serves an important purpose. Accounting statements are used to help you and others gauge how the business is doing. To keep your accounting information up-to-date, as well as to prepare for an unexpected visit by the Internal Revenue Service (IRS), you must be sure to keep thorough records.

In addition to record keeping, you’ll need to choose a method of accounting, such as cash-basis or accrual method. Moreover, you must decide when your business’s financial or fiscal year begins and ends. Usually businesses use the calendar year (January 1 to December 31) as their fiscal year, though your accountant or the IRS may suggest otherwise.

Insurance

You will need to purchase different types of insurance. Your insurance needs may include property and casualty insurance, life insurance, and liability insurance. If you have employees, you need to think about whether to provide medical insurance and benefits; worker’s compensation insurance is typically required in most states.

Staffing

Are you going to do all the work in your business yourself? If not, whom will you hire? What skills must your employees possess? What tasks will they be responsible for? Keep in mind that the more employees you hire, the more your company will be subject to laws at the state and federal level. Some federal laws that address discrimination in the workplace are based on the number of employees in the business. Certain employee benefits may be mandatory, depending on the size of your company. You may be subject to certain tax rules when employing family members.

Marketing and advertising

Every business markets and advertises. Whether by word-of-mouth for a sole proprietor or through a global campaign in the case of a giant corporation, marketing and advertising are invaluable ingredients for success. In order to market yourself effectively, you’ll need to think strategically. It helps to have a written marketing plan. Be prepared to answer questions like: Who are your competitors and what are your company’s advantages over them? How will you price your product or service? Who is your target market and what is the best way to reach them? What is the key message you want to convey (i.e., your “value proposition”)? It might help to conduct market research before putting together a marketing strategy. This research will help you gauge market perceptions and may help you identify new opportunities for product, pricing, and promotion.

Financing

Insufficient financing is probably the most common obstacle to starting a business. In addition to calculating how much money (capital) you’ll need to start and run your business, you have to figure out where to get the funds. Will you borrow from a bank or family member (debt), or will you take money from investors in exchange for a share in the ownership of the business (equity)? If you intend to seek equity financing, you will be subject to securities regulations. Moreover, you have to decide on how to structure the financing–will you have more debt than equity, for example?

Patents, trademarks, and copyrights

How will you protect your intangible assets–your company’s name, for example (trademark)? Perhaps you have an invention you wish to protect (patent). Or maybe you’ve written a book and wish to protect your written words (copyright). Whatever your concern, you’ll need to think about protecting your creation. An experienced attorney can help you with these issues.

Licenses, permits, and registration

You may need to obtain licenses or permits, or even register with a governmental agency. For example, if you choose to create a corporation, you must register with the secretary of state. If instead you are a sole proprietor, you might be required to obtain business permits from, and/or register your business’s name with, the municipality. To find out more, contact the office of the secretary of state or the chamber of commerce in your state or municipality.

Factors to consider when buying an existing business

In addition to all of the factors to consider when starting your own business, there are other considerations when buying an existing business–is it a stock purchase or are you buying company assets? How is the business being valued? In addition to finding a business and arranging for the purchase and financing, you may also be reconsidering the form of business entity. Just because you bought the assets of a sole proprietorship doesn’t mean you can’t change the entity to some form of corporation.

Factors to consider when buying a franchise

If you are considering buying a franchise, there are important additional considerations. In exchange for assistance from the business granting you the franchise, you are obligated to pay certain fees and accept a certain level of control from the franchisor.

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly

available information from sources believed to be reliable—we cannot assure the accuracy or

completeness of these materials. The information in these materials may change at any time and

without notice.

 

 

 

Managing Difficult Patients, Minimizing Risk

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Two patients receiving the same treatment will often experience very different results, even if the standard of care was met in both cases. Suboptimal outcomes, coupled with unrealistic patient expectations, can result in costly and protracted litigation. This edition of Dental Expressions®  provides dental practitioners with tips and techniques for minimizing liability exposure by focusing on communication, documentation and referral.

PATIENT  MANAGEMENT One of the more unpleasant situations a dentist may encounter is treating an unhappy or recalcitrant patient who threatens to sue during the course of care. In our litigious society, dentists must be aware of the possibility of complaints or claims even when the treatment appears to meet the standard of care. The following tips can help minimize the risks of legal entanglements.

Read full issue
If you would like to receive future issues of Dental Expressions®, please register for a complimentary subscription.

For additional risk management information, visit the Professional Protector Plan® for Dentists program website at www.protectorplan.com for additional resources.

 

Published by CNA. For additional information, please contact CNA at 888-600-4776. Reproduction in any form is prohibited without express permission from CNA. This publication is intended to provide timely and accurate information on professional liability and other topics of interest to dentists. The information, examples and suggestions presented in this material have been developed from sources believed to be reliable, but they should not be construed as legal or other professional advice. CNA accepts no responsibility for the accuracy or completeness of this material and recommends the consultation with competent legal counsel and/or other professional advisors before applying this material in any particular factual situations. This material is for illustrative purposes and is not intended to constitute a contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states. CNA is a service mark registered by CNA Financial Corporation with the U.S. Patent and Trademark Office. Certain CNA Financial subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activity. Copyright © 2015 CNA. All rights reserved. Any references to non-CNA websites are provided solely for convenience and CNA disclaims any responsibility with respect thereto. Professional Protector Plan® is a registered trademark of Brown & Brown Insurance. Published 10/15. DE15-3.

How Much Auto Insurance Coverage Do You Need?

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All states have financial responsibility laws that either explicitly or in effect require you to purchase at least some auto insurance. However, there is often a large gap between the amount of coverage you’re required to have and the amount of coverage you really need. Even in states with the most stringent requirements, many insurance professionals suggest that you have a broader scope of coverage (i.e., more types) than what the state mandates, and that your coverage limits in most areas exceed the required state minimums.

The basics

Auto insurance coverage is typically broken down into component parts, each providing a different type of protection. These types of coverage may be optional or required, depending on the state in which you live:

• Liability coverage: This provides protection for claims made against an insured, where the use of an insured vehicle caused bodily injury or property damage to someone else

• Medical payments or personal injury protection: This provides coverage for various medical expenses incurred by the insured and others as a result of an accident, regardless of negligence or liability on the part of the insured

• Collision: This provides coverage for losses the insured suffers as a result of damage to his or her covered vehicle caused by a collision

• Other than collision (also known as comprehensive): This provides coverage for losses the insured suffers as a result of damage to or loss of a covered vehicle not caused by a collision (e.g., fire, theft, vandalism, falling objects, explosion, earthquake, flood, civil commotion)

• Uninsured motorist (UM): This provides coverage for losses the insured and others sustain when injured through the negligence of an uninsured or unidentified hit-and-run motorist

• Underinsured motorist (UIM): This provides coverage for injuries the insured and others sustain when injured through the negligence of an underinsured driver

Aside from any state requirements, determining the amount of auto insurance coverage you need is a balancing act. You’ll need to weigh how much coverage you need against what you can afford, your ability to weather any financial risk (e.g., lawsuits), and whether you have assets that you need to protect. However, there are some general guidelines you can follow.

Liability coverage

When you injure or kill someone in an accident, bodily injury claims for medical bills, lost income, and pain and suffering can easily amount to hundreds of thousands of dollars. Property damage claims can also be costly. For example, suppose you caused severe damage to someone else’s expensive, brand-new car or struck and damaged a telephone pole. Would you be covered for the damages you caused?

In most states, the required minimum liability coverage doesn’t come close to covering the costs associated with a serious accident. That means you could have to pay part of the claim out of your own pocket if you’re sued. This is particularly dangerous if you have a home and other large assets to protect. So it may be in your best interest to carry both bodily injury and property damage liability coverages well beyond state minimums.

Keep in mind, however, that you shouldn’t buy more insurance than you can afford. And if you don’t have significant assets to protect, the minimum auto insurance coverage required by your state’s laws (or by your lender) may be sufficient.

Medical payments coverage

If you and your family have good health insurance coverage, you might think that medical payments coverage is unnecessary. It’s important to note, however, that your health insurance won’t cover anyone outside of your family, while medical payments coverage often will cover anyone who is a passenger in your car.

In states that require medical payments coverage, you may not need to purchase more than your state’s minimum coverage requirement. However, you can usually purchase additional medical payments coverage for only a small increase in your premium. And even if medical payments coverage is optional in your state, you may want to buy at least a small amount of coverage.

Collision and other-than-collision coverage

In most states, both collision and other-than-collision coverage are optional. If you are still paying off a car loan, the lender will no doubt insist that you carry both. But if you don’t have either of these types of coverage and your car is stolen or damaged, you will have to pay for the vehicle’s repair or replacement out of your own pocket (unless the accident was caused by another driver and you can prove it).

Keep in mind, though, that both collision and other-than-collision coverage are subject to deductibles and generally only provide coverage up to the actual cash value of your vehicle. Having collision or comprehensive coverage on older, less valuable vehicles may not be cost effective, since any claim payment you’d receive would be minimal and might not exceed what you pay in premiums and deductibles. Ask your insurer or agent to look up the book value of your car to help you decide.

Uninsured motorist and underinsured motorist coverage

Even though both UM and UIM coverage are optional in some states, the number of uninsured and underinsured motorists on the road makes these types of coverage extremely important. You probably want to purchase some level of UM and UIM coverage. Otherwise, you might have no recourse against a driver who doesn’t have adequate auto insurance or has no auto insurance at all.

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, or legal advice. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

 

 

Properly Insuring Your Business

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No matter how careful you are in running your business, accidents happen. And no matter how big or small your business, you’ll have to plan for these and other risks if you want your business to thrive. One way to do this is with insurance.

Imagine this: Your custom-made cabinetry business is thriving. You have a handful of talented employees and a stack of orders. Then, the unthinkable happens. You or one of your employees is severely injured using the equipment. Or a fire damages all of the cabinets you’ve spent the last few months building. Or a customer calls to tell you that the new cabinets you installed yesterday just fell and crashed onto her kitchen floor.

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Student Loan Basics

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You vaguely remember signing a piece of paper every year at college registration time. Now that you’ve graduated, it’s all become painfully clear–those pieces of paper were promissory notes detailing your student loan obligations. Your loans aren’t going to go away, and you’ll want to repay them as quickly and easily as possible. So whether you have a small sum or a small fortune to pay off, you’ll want to brush up on some student loan basics.

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