Frequently, readers write to me asking about how I would handle business insurance for a specific business. For example, recently, a reader wrote to me asking about insurance for a particular non-profit.
One business is not like the next. My law firm is different from a dog grooming operation (but, not by much). Some businesses have no onsite inventory. Some businesses have a high degree of potential professional liability and very low degrees of property liability. Every business is different. But, most businesses in a category are generally the same.
Many insurers build on their experience with specific categories of business insurance customers to create packages of commercial insurance tailored to your business.
For example, Nationwide has one of the best websites that illustrate this point. Let's say you are a photo studio looking for insurance. Nationwide has a page of listed industries. Photo studios are one of those industries. Going to that page reveals a wealth of information regarding business insurance for a photo studio including a checklist to bring with you when meeting with an insurance professional.
Purchasing your business insurance in this fashion can be extremely helpful. Especially, for the small business. Your business will benefit from the "free" advice inherent in the collection of the insurance products the insurer has assembled for your business.
Assembling a package of appropriate business insurance for your business is also the job of the insurance professional. And, as I often write throughout this Guidesite, the best way to insure your business is working with a
Captive agents are insurance agents working for one specific insurer. The agent is a "captive" to that insurer and usually only sells that insurer's products. An independent agent is "independent" of any particular insurer and can sell products from a number of different insurance companies. Thus, an independent agent may be better suited to build a particular suite of insurance products for your business because that independent may have a broader source of products and companies to choose from.
This may not always be the case, however. Captive agents are often aware of internal marketing pushes from their insurer to secure a particular kind of commercial customer. So, where an insurer has a pre-built template of products for a particular business, the agent working for that company alone does not need to remake the wheel or build a new product. This often results in savings to the business.
For example, American Family sells through captives. Looking at its website one sees a set of specific businesses. "Beauty and Barber Shop," and, "Landscaper," just to name a few. Somewhere, back in the home office of that insurer, it was found that the particular suite of commercial insurance products for a landscaper could be marketed and sold at a profit for the insurer. Your landscaping business benefits by going through a captive agent in this instance because this particular insurer has decided to focus on this market. Typically, each product is discounted from the premium price that would be paid if each product was bought separately.
Finally, looking at commercial insurance packages created for your business by insurers or insurance professionals can be valuable to your business because there may be risks your business did not consider. Looking at American Family's landscaper coverage it includes an insurance product called "Limited Pesticide/Herbicide Application Coverage." I would not have thought of this and many landscapers may not have thought of purchasing a product that provides "limited pollution coverage for losses that occur when herbicides and pesticides are applied by a certified handler, and according to manufacturer’s specifications."
Both as a practical way to lower premium costs and to educate the business about insurance products, looking for packages specifically tailored to your business category can be a valuable way to purchase business insurance.