The commercial insurance industry is an intentionally confusing beast, but the advice in this article is simple and straightforward.
This is quick and action-packed so buckle up, put everything else aside for just a few short minutes and FOCUS!
- Insurers sell shelf-product policies.
This means the policy language varies little or none from one insured to another, with the exception of additional exclusions the insurer adds to further protect themselves, not your business.
The insurer’s shelf-product language may be perfectly fine for one business, but DEADLY for another and it just gets slapped together and sold to you.
If you see something indicating you have a “tailored” policy, in my experience that is a marketing ploy where you have little extras here and there worth a few thousand dollars but 99.9% of your coverage is the same as any other business that insurer writes.
Perhaps adding a number of extra exclusions to your policy is your insurer’s idea of “tailoring” the coverage???
2. Your agent can only get quotes from a limited number of insurers.
While all agents are limited, some have far better overall market access than others. You should know where your agent falls in that lineup because it WILL affect what they are able to do for you.
This also means that no single agency can access every insurer in the marketplace.
I don’t care if it’s the giant Marsh & McLennan, Aon, Willis Towers Watson, Gallagher, HUB, or any other large national agency. They can only get to who they can get to, period.
This means you may or may not be looking at the single best product/price in the marketplace if all of your quotes are coming from one or two agencies.
3. Your agent has favorites.
Some insurers will pay your agent more commission than others.
What do you think are the odds that most of the business at any given agency is going to be placed with the insurers who pay the highest percent commission to the agency?
I’m not saying that’s always a bad thing. Those insurers may offer the best coverage and price of any in the agent’s shop, but it is worth noting nonetheless.
Here’s how all that adds up for you:
You got quotes from a limited number of insurers, probably missing other quotes you could have chosen from that may have been FAR superior in terms of coverage and price. Strike 1.
You opted for a largely or totally shelf-product policy that almost certainly contains language that is potentially fatal for your business and I’m sure no one has given that a second thought. Strike 2.
The quotes you viewed and the insurance you chose may have been compromised by ignorance of policy language and the marketplace, selfish incentive, or who knows what else. If so, Strike 3.
Read my other articles on how to most effectively market your commercial insurance and follow the steps.
You’ll be amazed at the results.
To Your Success,