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5 Questions to Ask Your Insurance Agent

And 5 Tips to Make Sure the Insurance Buying Process is Smooth

What Liability Do I Face That I May Not Realize?

Insurance Agents interact with businesses of all types and sizes on a daily basis. They work with business owners when they are starting a business, when they are up for renewal, and when they have to file a claim. These experiences expose your agent to many different ways a business might have to use their insurance policy. This experience allows your agent to understand risks that a business owner may not even realize they face. If you value your business than ask your insurance agent about those risks you may not foresee.

How Should I Communicate With You?

Ask your agent what their preferred method of communication is. If you need to get ahold of them in a hurry, ask how to best accomplish this. They may have a key employee who is the person to talk to when you cannot get ahold of them directly. It is helpful to know who those people are and what the process is to get ahold of the agent effectively. It is equally important to ask them what the process is throughout the year for you to communicate with each other (when you need to file a claim, when you are up for renewal, when you buy new equipment, etc.).

How Can We Establish Expectations?

Most business owners are very busy people and time is of ultimate value. The same can be said for your insurance agent. An insurance agent has to balance the needs of many customers. If you know at the beginning of your business relationship what expectations are, the more likely you are to avoid difficult situations in the future. This should go for what their responsibilities are, what your responsibilities are, when you should talk to each other, and what the process is at the end of your term. These are just a few areas that should be established up front to prevent problems down the road.

How Do I Report a Claim?

Knowing what the process is to file and process a claim is not something you want to be figuring out when your business is dealing with a loss. Do not be upset when your agent tells you that the carrier process the claims. Processing the claim is the job of the carrier. It is important to contact your agent throughout the claims process. They can help when an unfortunate event occurs like your agent is not living up to their responsibilities.

What additional Information can help you?

Your insurance agent can only act upon the information you give them. No one knows your business, inside and out, as well as you do. Communicate as much about your business as you can to your insurance agent as well as what you value out of your relationship with an insurance agent. this additional information can help the insurance agent determine what exactly are the risks that your business faces and it will help them come up with multiple packages to suit the needs of your individual business.

5 Tips for a Smooth Renewal

Honesty is Always the Best Policy

When it comes to protecting your business, honesty is always the best policy. Once you find an insurance agent that you trust (and you should not be partnering with an agent you do not fully trust) it is important to tell them as much about your business as is necessary. Do not ever conceal or lie about anything within your operations. At best it can cause a major headache for you when a claim is filed and in many cases it can cause a claim to not be covered. Having a long and honest conversation each year with your insurance agent is always the best way to properly protect your business.

Tell the agent what you can and cannot afford

You do not have to give the agent a number, but if you cannot afford an all inclusive package you need to tell them. It is equally wise to ask your agent what liability you are left exposed to by not purchasing a particular policy. Most carriers have Business Owner’s Packages designed specifically for each industry. These packages can usually be changed to meet the specific needs of your business. If you are cash strapped and cannot afford all the policies recommended, it is important to tell them this fact. This is also true if you have the ability to pay and you want to get as much coverage as possible. No matter where your business stands and what you value, it is always best to keep your agent in on these priorities.

Express to the Agent How Much Risk You are Comfortable With

In some business scenarios, you do not have to overdo it when it comes to insurance. This is especially true for startups or seasonal businesses. Now it is never a good idea to go under-insured, but not every business needs to take on every insurance coverage offered. Cyber liability is one coverage that may or may not be necessary for your business. It takes an in-depth conversation with your agent to determine whether you actually need cyber insurance or any other coverage. In addition to going without coverage, you can also save money by choosing a higher deductible.

Remember the Agent is Feeling You Out Too

Remember, the agent is feeling you out too. If you give the wrong impression of how you run your business, the agent may determine the risk is not worth the commission. This can make it difficult to find an agent who will partner with you. This can be especially difficult when you are looking for comprehensive coverage or you are looking for the lowest California Workers Compensation Rates. Always remember the agent may also be feeling out if your priorities are in line with the type of customer they want to partner with. Insurance is a business of maximizing risk. Insurance agents and carriers want to partner with businesses who rarely file a claim. If you have a negative claims history, you do not have any documentation of safety programs and you only want to discuss what the cheapest policies are; the agent may determine you are the type of business that is likely to file claims at a high frequency or claims that may be severe. If you put off this vibe during your interactions with the insurance agent, they may simply determine your business is not worth the perceived risk.

Periodically Reevaluate Your Risks

As businesses grow so do the risk they face. If you have finished a year in which you have taken on additional staff, bought additional equipment, or taken on a new property; it may be time to reassess the risks your business faces. This is why it is important to find an insurance professional with whom you can have a comfortable relationship. When you establish a strong relationship with your insurance agent, this relationship allows you to feel comfortable telling your insurance agent about all the aspects of your business that may present additional risks to your business. This is not something you need to do on a weekly or monthly basis, but it is something you should do when you are up for your yearly renewal.

Why should someone choose an independent agent?

4 Reasons why you are better off choosing an Independent Agent.

Choosing which businesses to partner with are important decisions for any business owner, no matter what industry they operate in. Finding another business to provide the products and services you depend on is essential to your success. No decision is more important who you decide to purchase insurance from. There are many ways a business owner can go about this process, but one of the most effective for many businesses is to partner with an independent agent. Here are 4 reasons why you should choose and independent insurance agency the next time you are looking for insurance coverage.

An Independent Agent Works for You

When you partner with a captive agent (an agent who works for only one carrier) they have a partnership with that carrier and that carrier only. They work for you the business owner, but they also are equally looking out for the best interests of the carrier as well. An independent agency, who partners with multiple carriers, has more of an incentive to keep you the business owner satisfied in order to continue to win your business in the future.

An Independent Agent gives you choice

When you partner with an independent agent you will have the choice of which insurance carrier you would like to partner with. Most independent agencies partner with between 10 and 40 insurance carriers. This gives them the ability to shop your policy around and make the carriers compete for your business. An insurance agent who is a partner with only one or a few carriers, is not able to obtain quotes from as many carriers. In most cases, this causes them to not be able to get as thorough coverage and it may not be at the best rate. When an independent agent partners with many agents they learn the ins and outs of each carrier. They know which carrier is better at the claims process, which carrier is more likely to give additional credits and discounts, which carriers like for you to have a safety program in place. They can advise you on which carrier might be a better match for you based upon what you value. The best match for you may not always be the carrier who offers the best price. They can help guide you through that process with the most thorough and unbiased information.

An independent agent is a partner with an insured, who has their best interst at heart.

An Independent Agent can be your advocate

An independent insurance agent can give you unbiased advice about the coverage’s you are looking to secure. They can give you advice about all the companies you are considering. They can tell you which companies are the best during the claims process, which companies more than likely offer the cheapest rate, why you might want to pay additional premium for the services of a particular carrier.

An independent agent can also be your advocate when you have a problem regarding your insurance policy. These problems can arise when you have a billing question, you buy new property or equipment mid-term, when you need a certificate of insurance for another business you are partnering with or even when you have a claim. This is especially important in the event you have a claim, and all business at some point have to file a claim. If your carrier is not living up to their obligations your agent can hold them accountable on your behalf.

An Independent Agent can save you time and money

Depending upon what you value in the insurance quoting process, an independent agent can help you save both time and money. For some business owners their time is precious and the most important aspect of the insurance buying process is to have the process over with as fast as possible. If this is the case, you can express this to your agent and they can search the policies for you after a 5 or 10 minute conversation. They can get you a quote from as many as ten carriers with minimal time. Partnering with a captive agent means you have to call each carrier individually.

For many business owners, their time is better spent running their business than it is trying to save additional money on premium. Some businesses may have a premium amount that is so small it may not be worth their time to spend an additional few hours to find a 5 % savings on a $500 policy. In the end this would only save them $25. On the other end of the spectrum, a large business with a $75,000 policy may block out as much time as a half a day or even multiple days to find the best insurance policy for their business. In this instance a 5% savings would add up to $3,750, which is a months worth of salary for one of their employees, it could be a $500 bonus for 7.5 employees, or it could be a winter vacation to Florida for the owner of the company. No matter what you as a business owner value, an independent agent can save you time and money by having them do the searching for you all at one stop.

6 things an underwriter loves to see when quoting commercial insurance.

For most small business owners, purchasing insurance is not one of their favorite things to do. Most business owners would rather be involved in the day to day operations of what their business does to make a profit. Taking a little extra time before you pick up the phone to get a quote can make all the difference in the world when you are offered a quote. Here are 6 things to keep in mind when speaking with your agent about a business insurance quote.

Small Business Insurance

Have your info.

Everyone wants a quote and they want it quick, but insurance is not a business in which a company can quote a price on the drop of a hat. Proper tax id number, your experience modification rating and accurate payroll figures make the process much quicker for an agent to get a quote from the underwriter. If you don’t have this information a carrier cannot and will not offer you a quote. to save yourself and the carrier some time, have this information ready before you start looking around for coverage.

Safety programs are in place

Safety programs can be expensive and time consuming, but they absolutely benefit your company in many ways. First and foremost, they lower the amount and severity of injuries that occur to your employees. Second they limit the amount of time it takes injured employees to return-to-work. Third it can impact what you pay in premium for commercial insurance. If and when you have an injured employee, your insurance agent can negotiate on your behalf with your insurance carrier to not raise your rate on premium because of the claim. If a detailed safety plan is in place the carrier might see this one incident as more of an outlier and not a sign of how the business operates. If there is not a safety plan in place your business is much more likely to have your rates go up or be dropped by your carrier altogether.

A thorough and accurate website

The accuracy of your website is extremely important. Your agent is going to have a conversation with you about your operations. During this conversation it is important to tell him not only what your business does, but more importantly what your business does not do. Your website needs to match up with this description. If you run a landscaping business that does not work on trees, but your website offers tree services than an underwriter is going to wonder what else you are not telling them. This is a great way to get a higher premium or more likely be denied coverage altogether.

A detailed payroll history

I know you may not like giving away too much information about your business, but the more accurate this number is that you give to your agent the more accurate your quote will be. This will all get straightened out during an end of term audit, but it is best to prevent over or underpaying on premium by giving accurate numbers to your carrier up front.

Don’t be a rate jumper

A business who seems to change carriers every year at the slightest drop in premium. Carriers want to establish a long term relationship with a customer. If you have several carriers over the last few years it may be a red flag that those carriers dropped your business or that the carrier may only have your business for one term. Unless your payroll is extremely high it may not be financial sound for them to quote you.

Don’t forget, in the end they work for you

If you forget a few pieces of information that are necessary for a quote than it might be expected for the agent or underwriter to be a bit frustrated. But never forget that these people work for you. If they make you feel too uncomfortable do not hesitate to walk out and speak with another agency or carrier. Do what you feel is best for your business.

4 tips of inured worker outcomes

Here are 4 ways to improve your businesses injured worker outcomes.

Injured workers are a part of running a business. If you stay in business long enough, you are going to have an incident where one of your employees is injured. This is not a bad representation of your business, but how you handle the situation can have a lasting effect on your relationship with your employees and your insurance company. Here are four ways in which you can manage and incident where you have an injured worker that are best for your injured worker, your business and the insurance company you partner with.

Take care of the injury, first and foremost

This is simply the right thing to do. The best way to improve injured worker outcomes is to first deal with the injury. Taking care of the injured employee is also the best thing to do for the insurance companies to help get the injured employee the best medical care and it can help the medical professionals treat the injured employee quickly and cost effectively.

Report the injury to your agent and carrier

A lot of business owners may not think it is so, but your insurance agent and carrier are on your side. It is in their best interest to help your business and to help your injured worker get the care they need and get back on the job as quickly as possible. They deal with these situations a lot. They can navigate the workers’ compensation system much more effectively than you can. More important than anything is the fact that they cannot help you with these injuries until you notify them an injury has occurred. Also, documenting the injury allows your business and the carrier to keep track of your claims history. If there tends to be a pattern of injuries, you can address it and the carrier can help you. They interact with business owner across the country in all industries. Chances are they have dealt with a similar situation and can give you some guidance as to how to prevent/fix the problem from continuing to occur.

Keep your Agent in the loop

Remember your independent insurance agent is on your side. At least they very well should be. If for instance, you feel your carrier may not be living up to their responsibilities the agent can speak with the carrier on your behalf. Agents interact with carriers very frequently for a number of reasons. They have an established relationship with these organizations and they can more easily get your claim in front of the right person to most effectively solve your problem. Also, they can only help you when they know an incident has occurred. The longer you go without getting them involved in a claim the more likely the claim is to get out of hand. This means more missed time for your injured worker, a larger cost to the insurance carrier and probably higher rates on premium for you in the future. Keeping your agent involved can help prevent all of this from occurring.

Let the carrier take care of the billing

Do not try to take care of the billing yourself. Even if you have been in business for a long time and you think you know the workers comp system fairly well. Things change. A medical facility that you have been taking your injured worker to for years may stop a relationship with your carrier. If you take the injured worker to a medical facility out of the carriers’ network, you may be liable for the costs. The network for workers’ comp is not necessarily the same network for health insurance, even if you use the same insurance company for both policies. It is always best to let your insurance company do what they do best.

12 terms to familiarize yourself with before your next renewal.

Insured

The person, group, or organization whose life or property is covered by an insurance policy.

Insurer

Insurance company that issues a particular insurance policy to an insured. In case of a very large risk, several insurance companies may combine to issue one policy.

Named Insured

Any person, firm, or organization, or any of its members specifically designated by name as an insured(s) in an insurance policy. .

Premium

The price or amount paid for insurance.

Claim

A formal request to an insurance company asking for a payment based on the terms of the insurance policy.

Carrier

A company that offers and underwrites insurance policies.

Policy

A document detailing the terms and conditions of a contract of insurance.

Underwriter

The person who decides whether to provide insurance and under what terms.

Agent/Broker/Producer

A person licensed by a state and employed by an insurance company to sell insurance policies on the company’s behalf.

Umbrella Coverage

Umbrella coverage protects your business when your existing liability insurance policy limits can’t cover all the expenses of a claim.

Hired and Non-owned Auto

A coverage that is commonly added or endorsed onto a commercial auto insurance policy. This endorsement adds additional coverages for the insured in the event there becomes a liability issue for an automobile accident involving a vehicle they don’t directly insure (rentals or employee owned cars).

Experience Modification Rating

An employers’ Experience Modification Rating refers the factor calculated from actual loss experience. It is used to adjust the businesses premiums (higher or lower) based on the businesses loss experience relative to the average underlying manual premiums for workers compensation coverage. The Modifier (Mod) compares the insured experience to the average class experience.

Additional Terms to consider familiarizing yourself with before your nest renewal

Waiver of Subrogation

A Waiver of Subrogation is a contractual provision whereby an insured waives the right of their insurance carrier to seek redress or seek compensation for losses from a negligent third party.

Certificate of Insurance

A certificate of insurance is a document that is used to provide info on specific insurance coverage and provide verification insurance is in place at the time of issuance. The certificate contains the types and limits of coverage, the carrier, policy number, named insured, and the policies’ effective dates.

Certificate Holder

The certificate holder is the person, business, or nonprofit organization who is provided with a certificate of insurance to prove coverage is in place at the time of issuance. The certificate holder will be notified if at any time the policy is cancelled before the listed policy effective date.

Additional Insured

The Additional Insured is the person or organization who is not automatically included as an insured on an insurance policy, but who is included under the policy at the request of the named insured.

Q&A with Tim Davis

Q&A with Insurance Expert Tim Davis

What are the most significant Weather Related Risks for Small Businesses?

What’s the biggest mistake small business owners make when it comes to safeguarding their businesses from weather-related interruptions and why is that a problem?

The biggest mistake small business owners make is failing to buy business interruption coverage. This coverage is not a stand-alone policy, but is typically included on a business owners’ package (or BOP) policy. The Hartford has some of the best coverage available on their business interruption coverage as a part of their BOP policy, but several other carriers offer great coverage as well.

How can we know if we need flood insurance in addition to business interruption coverage?

Flood insurance will not only provide coverage to replace the damage to your building, but the business interruption coverage won’t respond for flood-related losses if you don’t have flood insurance in place.

What’s a common misconception about business insurance related to weather issues and what’s the truth?

As highlighted above, business interruption coverage won’t apply to all weather-related issues. Whatever peril (or risk) caused the business interruption must be a covered peril on the BOP policy. If an earthquake caused the damage and interrupted your business, but you didn’t have earthquake coverage on your policy, then coverage for the earthquake damage wouldn’t exist.

Another common myth centers around off-premises power failure. If a weather-related event causes power to fail at a location away from your business (like a blackout or a transformer a mile away gets struck by lightning) … business interruption coverage won’t apply. With most policies, the weather-related cause of the power failure must happen at your business.

Do we need special coverage to protect from wildfires, or will traditional property & casualty cover us? Why or why not?

A wild fire would be a covered cause of loss on many commercial property policies, but it is not guaranteed. I would recommend reading over your policy – identify covered causes of loss as well as exclusions in the policy.

What kind of protection do we need related to employees and customers who might be injured on our premises during a weather event?

Your standard workers compensation insurance (for employees) and general liability insurance (for your customers) policies should suffice. These two policies should be enough to protect your business from incidents that occur on your premises.

What documents should we be sure to store safely to make the claims process go faster after a weather disaster strikes? Please describe each document and why it’s important.

Financial records will be the most helpful piece of information to provide to simplify the claims process. Carriers will evaluate the income losses your company sustained based off the company’s past sales history and reasonable projections of your company’s profits and losses for the time your company suffered from the weather-related interruption. Policy information – including agent and carrier contact information. Also, it is good to take pictures of the equipment in a building – including serial numbers. This helps with replacement parts and valuation.

What phone numbers should we keep on hand in the event of a weather emergency and why?

Make sure you have either your insurance agent’s number on hand, or (even better) the claims reporting phone number for the insurance carrier on your business owners’ package policy. I would also consider having phone numbers for emergency response/clean up companies. In the event of a major weather event, it is smart to have a few companies to choose from – maybe even consider a company from a neighboring community so that they are less likely to be impacted by the same weather event.

What’s the first thing we should do if our business is impacted by a weather event and why?

Life safety is the very first concern – make sure that all employees and guests at your premises are accounted for and safe. Then, secure your building and business personal property. If you can help prevent further damage by taking additional steps, those extra expenses can be covered in some policies.

What else should small business owners know about preparing for and responding to a weather disaster?

A proper BOP policy with business interruption coverage will provide a real sense of relief in the aftermath of a disaster. Loss of business income is the #1 reason that most businesses do not open after a serious loss. This coverage will help provide coverage for the actual income loss sustained; the net income (net profit or loss before income taxes) that would have been earned over that period; and provides costs for things like payroll so you can keep your employees while your company rebuilds. Be prepared – think ahead – develop a contingency plan. If something happens, have a plan already in place and make sure that everyone in the business is aware of what steps to take.

What other questions should I ask my agent about this coverage?

Check the time period you have for extended business income. Thirty days is standard coverage, but some carriers can offer up to 12 months by endorsement. Also ask your agent if you need contingent business interruption coverage — this pays out when your company is unable to operate because of an event like a natural disaster that damages the business of one of your suppliers or customers, which causes your company to lose income.