ICS Magazine

Your Insurance Agent - a Valuable Friend

February 9, 2006
A good insurance agent is invaluable.

When you are running a cleaning or restoration business and trying to make sure all your bases are covered, there is great value in working with a good insurance agent.

In the modern business climate, only a fool would dare operate a service business without the proper insurance in place. The challenge, however, is that this business of insurance is very complex, and has the tendency to be very confusing. It is difficult to know exactly what combination of insurance options are right for you and your business.

I decided to make a list of the primary types of insurance every business owner should investigate. In just a couple of minutes my list was the length of my legal pad. I included the basic business liability insurance package, vehicle insurance, equipment insurance, professional liability insurance, bailee loss insurance, process damage insurance, key man insurance, health insurance, life insurance...the list goes on. Each type of insurance covers a very specific type of risk.

The cost of the insurance is generally a function of just how likely it is that I might need to file a claim. The complicated part is that there can be specific exclusions, deductible adjustments, depreciation schedules, and the like that can bring the cost down and appear very attractive. However, these special circumstances can set up situations where the insurance doesn't apply to very situations you need to have covered. For example, most general business packages now carry a mold-exclusion clause. What this means is that if you are involved in providing mold remediation services it is likely that your basic business insurance is not appropriate for your business without special specific riders. Getting mold coverage included (if you can even find someone who will do it) is likely to be very expensive.

This is where having a good relationship with a professional insurance agent is very helpful. Usually, the agent will begin by sitting down with you and learning exactly what your business is about. Things like what services you offer, what credentials and training you have, how long you have been in business and who you do business with will all be considered. The agent can then recommend which of the literally hundreds of insurance options out there will fit your specific needs. The agent can read the fine print and legal terminology in the policies and actually understand it. This in itself amazes me, not to mention her being able to interpret this information and pass it on to me so that I am aware of what it means as well.

Once your agent has helped you identify what types of insurance are appropriate to your needs, he or she can then take you through the complicated and frustrating application process. It is very important to address every issue on the various insurance applications correctly as what you say here can affect the price you will pay or maybe even if you are able to get the insurance at all. Answer every question honestly and precisely, using the correct phrases and terms, and things will go a lot smoother.

Once the insurance is in force, your agent is able to monitor your package from year to year and make you aware of any changes that might occur. Sometimes coverages change from year to year, or you might become eligible for special discounts and the like as you go for years with a clean claims record. If changes occur that affect the way the insurance applies to your business, the agent can recommend appropriate action on your part.

A good insurance agent is a consultant, an advisor, an interpreter, a monitor, and a representative. If you add up all the premiums you pay for insurance, this is more than just a minor part of your business. Take the time to seek out, identify, interview, and build a trusting relationship with a good insurance agent. You will find the time has been well spent.