Restoration companies often find themselves conflicted when thinking about their personal and business insurance. Your insurance agent or broker is part of your professional team like your banker or CPA. They need to participate in managing the risk in your business, but the relationship is much more significant than just an advisor. The restoration industry is complex, so your agent needs to have a full comprehension of your business, risks and opportunities. Your agent needs to have a full grasp of your auto, personal, professional liability, employment practices, worker’s compensation, pollution, bailees, inland marine and much more. When you put together all the policies for your business it often is your largest business expense next to your direct labor and materials. Some companies choose to separate some of their insurance to several brokers for different reasons but often it is about the relationship or even as an opportunity to receive referrals and work from different resources. Some split their insurance policies in order to diversify risk. No matter your reason it is important to understand the role and opportunity, as well as expectation for your insurance team.
The first and most obvious is to find an agent that understands your business and provides the most complete coverage to properly cover your risk today and into your future. Your agent should fully understand your company, the complete business offering, know your top staff members as well as your vision for the future. When we operated a restoration company, our agent used to visit our office about every year to more fully understand our operation and the nature of our business and also to be on the lookout for changes in our business and potential gaps in coverage. There are a number of brokers that specialize in the disaster restoration industry. You may choose to consult with one of these individuals to have them review your coverage to assure you are properly covered. These reviews should not cost you money since often their expectation is that they may be able to work with your existing agent to offer products that you may not otherwise have access to or even write your entire business. I recommend using these as brokers not agents since they often do not have the ability to impact your local business. That being said, you should ask and you may find out that they can help in this area as well.
We would get our professional team together on about an annual basis to discuss our business, partnership, and vision for the future. This meeting assured that our professional team members (attorney, CPA and insurance agent) were all on the same page. During this meeting we discussed our partnership agreements, buy-sell options, insurance coverages, life insurance, corporate governance as well as any succession plans in the event of passing of one of the principals. This is not an essential meeting, but it is important and good practice.
An obvious area of impact in this relationship is discovering how your broker can impact your revenue. I have seen many virtuous cycles (defined as a system where all parties benefit from the relationship) involving insurance professionals and contractors. This list only includes ideas that you may explore.
- Will your agent introduce you to other commercial businesses and property owners?I have seen agents that offer a contingency plan to all commercial clients that is prepared by a restoration company with appropriate emergency phone numbers included (yours). This becomes a value-added program for the agent and also gets your business name in front of many different prospects without having to knock on doors to sell the need to develop a plan. Your agent can then use this to sell as they compete with other agents since they are not only offering a premium, but also a plan for a restored property and business resumption in the event of a disaster.
- May introductions to other agents or brokers in the same professional circles as theirs?I would ask your agent to refer you to their peers in the industry? Captive agents often have regional groups that meet on a routine basis. I have seen many service providers invited to these regional meetings to discuss their company and service offerings.
- Ask your agent to have the opportunity to offer a lunch and learn presentation to their entire staff – CSR’s, admin staff and producers. The purpose is an opportunity to introduce your company and explain how you are their partner in serving their clients and minimizing claims dollars through urgent response.
- Your agent should be an advocate to having your company respond to claims for any of their other insureds that have experienced property damage.This is a simple step and one that I would expect in exchange for a relatively healthy premium. I would not expect an agent to steer work when a client of theirs already has a contractor, but in the event they do not, then this is a relatively simple step.
- Is the agent able to make introductions to any insurance companies they represent? I would not necessarily expect them to attend any meetings (although that would be helpful), but I would want them to provide contact names and even a phone or email introduction. It would be helpful if they could be an advocate to getting face to face meetings with individuals that you are not able to connect with on your own. Examples may include claims mangers in regional offices or risk managers.
- Can your agent include you in their professional circles?Who do they do business with that may be influential, and can they help make connections? Examples may include bankers, real estate professionals, property managers, government officials, politicians, risk managers or other similar contacts.
This is not a complete list but one that offers some ideas on the assistance that your agent may be able to provide to assist your business growth. In the end this will be a mutually beneficial relationship because as your business grows, so will your insurance needs and premiums.
I have a client that created a unique strategy when shopping for insurance. The first unique step in the process was not to get a price quote because agents can protect a quote and not allow other agents to bid the same insurance company to a client. This hurt one client that really wanted a protection provided by a single insurance company that locked the other brokers out of the particular policy. This make sense so the companies can help protect the agency margins. Back to the point the restoration company approached 3 major brokers in their market and asked them to create a proposal about what they can do to assist the restoration company and their business. This process yielded some great and creative results along with a reasonable premium. The companies had to work to earn their clients business – not just assemble premium quotes from companies.
Having a strong and proactive insurance professional on your team can pay huge dividends for your business. The cost of the premiums should not be the most important element when selecting an insurance agent or broker. That being said, no one wants to be taken advantage of, so check your pricing but don’t consider switching for a couple thousand-dollar difference. As you can see the value of your agent is much more than a low price. I would expect your agent or broker to be a core element in managing your risk AND in growing your business.