Selected Excerpts From Surviving Business Insurance

Size: px

Start display at page:

Download "Selected Excerpts From Surviving Business Insurance"

Lily Rose
5 years ago
Views:

1 Selected Excerpts From Surviving Business Insurance WHY THIS BOOK? He who has a why to live for can bear almost any how. Friedrich Nietzsche Objective of this book T he objective of this book is simple: to equip you with enough basic knowledge and tools to be sure your insurance policies aren t so riddled with significant coverage gaps and deficiencies that they threaten the very life of your business! The information in this book will actually elevate your ability to do so beyond the capabilities of most insurance brokers who want to sell you insurance. Additionally, this book will give you some handy tools (see Appendix B) to review your current insurance program, fine tune it, and keep it running smoothly.

2 The objective of this book is not to make you an insurance expert! (Who in their right mind would want to become one anyway?) Therefore this book doesn t cover every aspect of business insurance, nor does it discuss every possible coverage or line of insurance. Rather, it hits the basics the key coverage gaps and serious mistakes that we see over and over again. Many of these mistakes cost businesses hundreds of thousands of dollars, some could cost over $1,000,000. Some of these could be business-ending mistakes. Who is it for? This book is primarily intended for business owners and managers who are tasked with securing insurance coverage for their company. Secondarily, we anticipate and welcome those readers involved in the insurance profession who want to sharpen their skills, and make sure they re doing a proper job for their clients. Why is it needed? I wish this book wasn t needed. Unfortunately this book is needed because: - Most policies are so poorly constructed that they could literally put you out of business if you have a large claim (or at the very least could seriously impact your bottom line if you have a small to moderate claim); - Most business owners and managers know very little about insurance, and misconceptions abound; - When it comes to properly insuring your business, you re actually pretty much on your own; - Most policyholders do not shop their insurance correctly; - Most policyholders have no idea how to assure they have a good broker; - You can t rely on anyone but yourself to get it right, and getting it wrong could be very costly; If you really think about it, what could be more important than properly insuring the asset (your business) that you ve invested so much in and worked so hard to

3 create? Yet time and again we see the insurance process (coverage design, broker selection, etc.) trivialized. It s not something you should trifle with! Page 3 Matthew Starkey SOME BACKGROUND The beginning is the most important part of the work. Plato, The Republic Why do you purchase insurance for your business in the first place? T hat s not just a rhetorical question. It really is worth thinking about. In my experience most business owners are so busy running their business that they sometimes lose sight of the importance of a proper insurance program. At renewal time they go into auto pilot mode, in other words they focus on getting specs out and getting quotes in from 3-4 brokers instead of focusing on the adequacy of their current coverage. They re often just looking for apples to apples quotes, and never stop to consider whether the apples are rotten in the first place! Therefore, at some point in my initial meeting with a client I usually ask them to pause, take a step back, and consider exactly why they purchase insurance for their business in the first place. Is it only because someone (e.g., a Landlord, a customer, a General Contractor, etc.) is forcing them to?

4 Hopefully, the answer is that they want to affordably protect the business asset that they ve poured so much time, energy, creativity, and financial resources into from a severe financial setback or even a business-ending event. Once you reboot your thinking in this way you can begin to appreciate the seriousness of your insurance program. I encourage clients to view insurance not as a necessary evil, something to scrimp on and purchase as cheaply as possible, or simply as something to maintain because someone else is requiring it of you. Rather, it should be viewed as a vital part of your business, as important as your biggest customer, as your product, your service, your brand, or your trade secrets. Does this seem overstated? When you consider that sloppy insurance (the type we see 90+% of the time) could literally put you out of business, I don t think the importance of proper coverage could possibly be overstated. Some other questions to ponder Here are a few more questions that might get you thinking: When I say insurance what one word comes to mind? If you were to receive a call from the Fire Chief at 3:00 tomorrow morning informing you that your building is on fire, what would be the first thing to come to mind? Why do you purchase insurance? Are you more interested in the cheapest premium or the lowest total net cost? Are you more interested in the cheapest premium or the security of knowing that your business will survive and prosper (its assets will be protected) should the unthinkable happen? Price aside, what are the three most important things you look for in an insurance agent? How do you measure success with your current agent? How much unintended self-insurance do you think you have in your current program?

5 What is the true cost of your insurance policies? Insurance isn t fun. People hate to shop for it. People hate to buy it. People hate to use it. It can be expensive, and those expenses can mount when you do use it and consider the costs of deductibles, coinsurance, lost time, frustration, and the joy of finding out you re not actually covered for the things you thought you were. You won t know how expensive your insurance policy really is until you have to use it; meaning when you submit a claim to the insurance carrier. Too often business owners focus only on the up-front cost of the premium. However, the premium cost will pale in comparison to the true cost of your policies if the coverage hasn t been structured properly. In later chapters we ll look at numerous specific examples of potential coverage gaps, and how much they could cost you. Suffice it to say for now that we almost always find coverage gaps that are well into the six figures. In other words, I can say with 90+% certainty, without having met you or examined your insurance program, that your insurance policies could easily cost you $100,000 or more out of your own pocket at the time of a claim. That s $100,000 or more that you weren t expecting or prepared for. Can your business survive an unexpected hit of $100,000? How about $1,000,000? A remarkable discovery In the last 25 years I ve evaluated hundreds of insurance policies. I have never not once! found an insurance program that was 100% error free, containing no coverage gaps or deficiencies. I would estimate that about Surviving Business Insurance Page 5

STOP RENTING AND OWN A HOME FOR LESS THAN YOU ARE PAYING IN RENT WITH VERY LITTLE MONEY DOWN

STOP RENTING AND OWN A HOME FOR LESS THAN YOU ARE PAYING IN RENT WITH VERY LITTLE MONEY DOWN 1. This free report will show you the tax benefits of owning your own home as well as: 2. How to get pre-approved