An Insider's Look at Business Insurance
Participants were navigated through the state of the business insurance industry, baseline coverages and what companies can do to get the best pricing for their business insurance needs in this informative webinar tailored to small business owners. Scroll down to the bottom of this article to listen to the full presentation and view the slides.
During a recent COSE’s WebEd Series webinar, presenters Rob Strachan of Strachan Novak Insurance and Tessa Forby of Grange Insurance took a deep dive into the business insurance industry to help small businesses like yours understand their needs and achieve desirable outcomes when it comes to protecting their business.
State of the industry
According to the presenters, Ohio is one of the cheapest states to buy insurance and is considered a buyer’s market, with agencies activing aggressively to acquire new businesses. As with any industry, the business insurance industry is constantly changing due to the release of new technology. In this case, things like Uber and driverless cars will have an impact on the future of business insurance. Amazon is starting to get into the business insurance market place. All of these things will drastically change the landscape of the market moving forward.
What is the role of the buyer?
There are two ways to purchase insurance. Buyers can go directly to an insurance company, or they can get an independent broker or agent who can shop the market. If choosing the latter, buyers should have a face-to-face with their broker to explain important information such as their niche and core capabilities.
What is the agent’s role?
An insurance agent is a bridge between the buyer and the insurance company. A good agent should listen carefully to the client’s needs and then proceed to shop out to each insurance company. Agents usually have somewhere between five to 15 different insurance companies that they have relationships with and frequently connect with on behalf of their clients.
What you need to know before seeking coverage
When evaluating a business for coverage, there are several things an insurance company wants to see, such as:
- Pride of ownership, including housekeeping of the space and maintenance of the equipment;
- protective devices such as sprinklers, central station burglar and/or fire alarm, cameras on property and other safeguards;
- good record keeping of things like job files, vehicle maintenance, etc;
- financial stability that proves the company is making money and has capital to put back into the business;
- experience in the field so that the insurance provider is confident the business knows what they’re doing; and
- appropriate hiring practices. Do they drug test employees or determine what kind of a driving record they have? How frequently is there turnover within the company?
And on the other hand, there are of course things an insurance company does not want to see from a potential customer, such as:
- Inaccurate marketing materials or information that exaggerates the company’s capabilities;
- lack of prior insurance, which could be an indicator that the company doesn’t truly recognize the need for insurance;
- late reporting of claims, which could be an indicator that the company was careless in preventing a claim from getting too large;
- frequently changing carriers or agents, showing a lack of loyalty or that they are trying to avoid something;
- poor payment history, which might show the company isn’t financially stable or that they don’t acknowledge insurance as being an important part of the business; and
- Difficult clients who seem like they are not receptive to working with insurance carriers.
When it comes to insurance, there is always “the fine print,” right? The webinar presenters encourage business owners to understand the small print when it comes to the different types of insurance. Here’s a list of important questions to make sure you’re asking:
Important question No. 1: If someone else’s equipment is in your care inside your building, does your policy cover their stuff?
Important question No. 2: Is flood included? What about things like pollution, product recall and professional liability?
Important question No. 3: What happens if equipment breaks down?
Important question No. 4: Does it exclude things like pollution, product recall and professional liability?
Important question No. 5: What is the coverage territory?
Important question No. 6: Does it include non-owned or hired automobiles? What about towing and rental expenses?
Important question No. 7: What is the coverage timeframe? How far back will the insurance cover you and will it extend into the future?
Important question No. 8: Are you covered from a cyber perspective: Viruses, phishing emails, privacy breaches?
Important question No. 9: In the event that you have to cease business for a period, does it cover business income, extra expenses and the effort you need to get your business going again?
And a few parting words: Do not look at your insurance as an expense. Instead, view it as an asset. You have someone to do your taxes, a financial advisor and a lawyer, among other professionals on your “team.” Do you have an insurance advisor? A hole is left in your business if you don’t have the proper planning needed when it comes to business insurance. Make sure you find someone who is involved and responsive, and who is not trying to sell you something.
The full recap of this webinar can be viewed below. Also, be sure to head over to COSE’s Events Page to view other upcoming events that can help your business grow.