Hiring the Right Person to Manage Your Insurance Program: Ensuring Comprehensive Coverage for Your Business

When it comes to protecting your business, finding the right person to manage your insurance program is crucial. While your local agent may handle your home and auto insurance, commercial insurance requires a specialized skill set. In this blog post, we will discuss why hiring an expert in commercial insurance is essential and how a comprehensive interview process can help you make the right choice. Let’s explore the reasons behind this critical decision.
Industry Licensing and Expertise

  • Obtaining the license: In the insurance industry, a property and casualty insurance license is required to sell commercial insurance.
  • Surface-level knowledge: The licensing test provides a basic understanding of general liability and property coverage but lacks industry-specific education.
  • Limited expertise: Passing this exam does not make someone an expert in commercial insurance. Due to the surface-level knowledge required to pass the exam, which is mentioned above, agents must seek out additional education to become well-versed in commercial insurance coverage and policies. 

Protecting Your Business Asset

  • Your business as a valuable asset: Your business represents a significant investment and the foundation for your family’s future.
  • Balancing personal connections and expertise: While supporting those in your circle is important, entrusting your business’s insurance to an unqualified person can be risky.
  • Common pitfalls: Policies handled by acquaintances or inexperienced agents may lack appropriate coverage due to incorrect class codes, inadequate descriptions, or oversight of contractual obligations.

Real-Life Examples

  • The cost of an improper policy: A client chose a cheaper policy recommended by an agent, but it excluded coverage for their new construction work. They incurred $300,000 in lost wages after being removed from the job site.
  • Subcontractor coverage gaps: Another client paid a substantial premium for a policy that didn’t cover subcontracted work. By working with a knowledgeable agent, they secured appropriate coverage and reduced their premium by 25%.

Navigating a Litigious Environment

  • The rise of litigation: In today’s litigious climate, businesses face increasing legal challenges, making it crucial to have expert guidance.
  • Expertise matters: A competent insurance agent with commercial insurance knowledge can help protect your business by ensuring adequate coverage.

The Importance of Due Diligence

  • Conducting an interview process: Whether renewing or starting a business, interviewing multiple agents is essential.
  • Seeking specialized referrals: Agents who don’t handle startups or smaller businesses may refer you to suitable experts, ensuring you receive appropriate coverage.
  • Avoiding online platforms: Be cautious of platforms offering cheap insurance, as they often provide policies with exclusionary language, leaving you vulnerable in the event of a claim.

Selecting the right person to manage your insurance program is a critical decision that shouldn’t be taken lightly. While personal connections hold value, you should prioritize expertise and thoroughness regarding commercial insurance. Invest time interviewing multiple agents, assessing their industry knowledge, and their commitment to providing comprehensive guidance. A sound insurance program is essential for protecting your business during its early stages and as it grows. Don’t settle for inadequate coverage that exposes your business to unnecessary risks. Choose an experienced insurance professional who understands your needs and can provide the necessary protection for your business’s future.
Related Links:

  1. The Importance of Commercial Insurance for Small Businesses
  2. Key Factors to Consider When Choosing an Insurance Agent
  3. Understanding Policy Language and Exclusions for Better Coverage

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