As a Commercial Insurance agent, it is my job to make sure that all of my clients are properly insured against the many risks they face everyday just by having their business doors open. That is not an easy task. While many look at insurance as a “necessary evil,” I try to educate my clients to view their insurance as a financial decision. I know that if I do my job right, my clients will have the peace of mind they need in order to run their business without worrying about if they are properly insured or not.
In today’s post, I want to share with you 3 Things You Should Know About Commercial Insurance. I know the insurance world is often a frustrating and confusing mess for those who are not in the industry, and for those who don’t speak it’s language. I want to help make insurance more understandable for those looking to learn more and understand exactly what they have, and what they need when it comes to their insurance portfolio.
3 Things You Should Know About Commercial Insurance
1.) Commercial Insurance is completely different than Personal Lines Insurance.
If there is one thing I have learned over the last several years in the insurance industry, it is that personal lines insurance, commercial insurance, health insurance, life insurance, etc. are all completely and totally different. I’m not just talking in their scope and coverage, but in how they work, how they operate, and how they are quoted. Commercial Insurance is night and day different than personal insurance, and unfortunately most clients don’t realize that, and most agents don’t explain that.
When I say that commercial insurance is different I mean the following:
- Coverages are different
- Premiums are different
- Claims are different
- Quoting is different
- The risk is different
- Everything is different
In dealing with commercial insurance, there are usually bigger risks involved, which means higher potentials for disasters, lawsuits, and claims paid out. That also means that premiums are usually higher in the commercial insurance world than you would see in the personal insurance market, simply because the risk is higher for the insurance company.
Another area where there is a HUGE difference between commercial and personal insurance is quoting. When I am quoting a home or auto for insurance, I need basic information like address, date of birth, info on the home (year built, percentage of flooring, square footage, etc.). However, when it comes to commercial I have to get TONS of information. Everything from what the business does on a daily basis, to whether or not they keep inventory, how much they keep, how many workers they have, what their payroll is, and more!!
Commercial insurance is MUCH more detailed than personal insurance, and requires much more information than you would need to quote a home, auto, or boat.
2.) Quoting takes time.
On the personal insurance side a quote usually takes between a few hours, up to 48 hours, depending on how busy we are, or how busy the carrier may be. However, when it comes to quoting commercial, the whole process could take several days, a week, or even several weeks depending on the business or industry we are dealing with.
Commercial insurance is like a cruise ship. It is huge and takes a lot of time and effort to deal with and work in, where personal lines insurance is more like a regular boat. It still takes time to deal with, but not nearly the amount commercial insurance does.
The reason for longer quoting periods ranges with each industry, and usually is based on what information the carriers (insurance companies) need in order to make an accurate quote.
3.) Making sure you are properly covered UNDER the registered business is extremely important.
One thing I run into on a regular basis, are businesses with portions (usually the commercial auto) of their insurance set up in their personal name and not the name of the business. I cannot tell you how big of a deal this is!! If you are a business owner, you want ALL of your business/commercial insurance put under the name of the registered business. Do NOT for any reason have it anywhere else. Doing so opens yourself up to HUGE liabilities issues that could come back to cost you personal, or could cause the business to go out of business. Not to mention the fact that if the insurance is wrong in some way it could mean the insurance company won’t pay out a claim that they would have had the insurance been named correctly.
When reviewing your commercial insurance portfolio, make sure that all of your insurance is properly placed where it needs to be. A simple review of your policy will help make sure all is correct.
While many blog posts cover the technical side of commercial insurance and how commercial insurance works, I wanted this post to cover the practical side. The side that is easily and usually missed or ignored. I know (and so do most agents) that clients are not interested in the technical side of insurance, they leave that up to the professionals (us). However, it’s the practical side that can end up costing clients big money if not properly taken care of.
If you have questions concerning your commercial insurance, or you would like a policy review of your insurance feel free to give me a call. I would be glad to help. I can be reached at the info provided below:
Until next time,