As a specialty business owner, you already know that your operations and staffing are quite different from other types of commercial enterprises. However, when it comes to insurance, many specialty companies often turn to a “Main Street” or general insurance broker for their insurance policy. Is that the case for you? If so, read on.
We recently sat down with George Gavaris, the owner of Central Insurance Agency (also known as CIA), to discuss why it’s so important to work with an insurance broker that truly understands your business and its needs. He’s a longtime insurance industry expert who has an extensive knowledge of the ins and outs of specialty insurance.
“It’s more important than ever to make sure that you have access to the widest range of insurance carriers through a broker who knows your industry – and knows it well – so you get the best policy you can,” says Gavaris. Here are a few tips for making that happen:
Tip #1: Confirm the broker’s knowledge of your industry. (Or, what do they know?)
The fact is, general insurance brokers may not have the hyper-specialized knowledge that’s absolutely necessary for understanding the unique risks and needs of a specialty industry. This lack of expertise can result in inadequate coverage and higher premiums. So before requesting a quote, simply ask the broker how many other companies they insure in your industry. The answer should immediately give you some indication of their knowledge base – or lack thereof.
“’Main Street’ insurance brokers can handle a wide range of insurance needs for typical businesses,” says Gavaris. “However, when it comes to specialty or hard-to-insure companies, these same brokers have may not had been exposed to the idiosyncrasies of a specialty market.”
Tip #2: Work with a broker who has relationships with multiple insurance carriers. (Or, who do they know?)
When it comes to broker-carrier relationships, forget “less is more”. In this case, “more is more” rules the day. Most “Main Street” brokers only have access to one or two carriers for the policies they offer. This lessens the broker’s ability to negotiate a lower premium because their options are limited. The result: higher premiums for you. These tight options are also compounded by the fact that commercial insurance is experiencing a “hard market” right now, meaning that carriers are further tightening their belts on what businesses they’re willing to insure and the degree of risk they’re willing to cover. On the other hand, a specialty broker has access to niche insurance markets that are better equipped to provide properly customized coverage, in spite of economic conditions.
“General insurance brokers may have established relationships with mainstream insurance carriers,” says Gavaris, “But they may not have the niche-market connections that are necessary for negotiating favorable terms or finding the best coverage options for specialty businesses.”
Tip #3: Make sure the broker can properly categorize your staff (Or, how well do they know your business?)
Workers’ compensation and liability insurance are at the heart of every commercial insurance policy and can greatly impact your coverage and premium. One key factor driving your premium is the associated risks assigned to your staff. Any miscalculations or mis-categorizations can cost you big-time. That’s why the better your broker knows your business and the type of work your employees do, the better for you. General insurance brokers may struggle to accurately assess and quantify these risks, which can lead to difficulties in obtaining proper coverage and negotiating a reasonable rate.
“Ask the broker how they determined the risk for staff and make sure it’s based on the right factors,” Gavaris recommends. “Otherwise, your premium will not accurately reflect your staffing levels and could end up higher than it needs to be.”
Click here to learn more about the no-obligation, line-by-line CIA Policy Review and Assessment: https://ciainsures.com/request-a-policy-review/