By Mary Oquendo
Insurance payments can represent a significant amount of our monthly business expenses. While the goal of any business owner is to keep expenses in check, this is one category that you want to be careful with when trying to save money. I have to groom five dogs monthly to cover my insurance payment so I want to make sure my coverage is adequate.
Less expensive policies may not have the coverage you think they do. After a claim is denied is not the time to find out you are not covered.
How do we know what our coverage is?
We all get that large envelope with pages and pages and pages written in insurance–ese when we renew or sign up for coverage. My eyes tend to glaze over after about page five.
However, the experts recommend that we take the time to read it. Another option is to talk to your Insurance Specialist. An Insurance Specialist is not your agent. An insurance specialist is your contact person within the insurance company itself, such as Travelers, Hartford, Nationwide, and so forth. An insurance specialist can walk you through your policy as it exists in their files.
Bottom line is this; you are only covered as it appears on the insurance company’s end. It doesn’t matter what your agent says. If you are mobile and have different policies for vehicle and business, you need to speak with each insurance specialist.
Suggested questions to ask your insurance specialist include, but are not limited to:
1) What are the details of the animal floater? Under what circumstances is this floater enacted? Many non–industry policies only include death, not injury. There will also be a dollar amount limit on each occurrence.
2) Does it cover lost pets?
3) What are the details of your business interruption policy? What are the exclusions? If you are mobile, does it cover when your vehicle is in the shop for a motor vehicle accident?
4) What are your deductibles?
5) Do you have full glass coverage? This includes mobile and /or shop.
6) Is there a limit on your equipment? Does it cover theft, fire, and the ravages of Mother Nature?
7) Shop renters: According to your lease, who is responsible for what on the premises and does your insurance cover your responsibility? You will want a copy of your lease handy when talking to the specialist.
8) For mobile groomers: Are you covered while at someone else’s home? There are some policies where your business policy is only in effect while parked at your residence, not the client’s! This is a particular concern if you have separate companies for business and auto. In addition, who owns your grooming vehicle, you or the business? A business policy is for business vehicles unless you are leasing your personal vehicle to your business. There may be a form that has to be filled out.
9) How does your driving record and that of your employees’ factor into the cost?
10) If you offer classes, does your insurance company offer a rider for a teaching certificate?
11) Has your business structure changed? A change could be going from an LLC to an S corp. Your insurance company will deny any claim if the business structure is listed incorrectly on the policy.
12) For mobile groomers: Does your policy cover the full cost of replacement including the conversion?
“We recommend that groomers and grooming salon owners sit down with their insurance agents and discuss the above policies and how they will best protect your business. Also, make a point to do a review of your policies yearly, as your situation and the business’s situation may have changed. You don’t want to be under-insured, leaving you without enough coverage to take care of a claim, or just as bad, over insured, wasting your hard earned money.”
—Ileana Nogueras, Founder of Groomers Emergency Assistance Fund.
This phone call usually takes twenty minutes of my time.
When comparing prices, it’s important to compare like to like. One policy may be cheaper, but may also have reduced coverage. Insurance rates will also vary for the same policy state to state.
Another consideration when choosing an insurance company is to determine their solvency ratio. A solvency ratio is a measure of the risk an insurer faces of claims that it cannot absorb. It measures a company’s ability to pay its bills.
“It never occurred to me that an insurance company could go bankrupt. I am now paying the price because a claim was not paid because the insurance company of the person who hit my car is now out of business.”
—Helen Schaefer
To determine the health of your insurance company go to https://eapps.naic.org/cis/. Put your company’s name into the “company name” box and click Find A Company. On the left, find your company and click on Financial Information. Three columns come up for premiums earned, assets, and liabilities. A more detailed report is available if you click on get financial profile.
Insurance policies to consider:
• Business Owner Insurance covers business property, business interruption, theft, & liability claims.
• Commercial Auto Insurance covers business vehicles for damage, theft, and liability.
• Disability Insurance covers lost wages in the event you are unable to work due to any injury.
• Health Insurance to help with medical, dental, and surgical procedure costs.
• Inland Marine Insurance covers your business when you are working off-site. Off-site may include grooming at an event or shelter, or theft of tools while working at a trade show.
• Life Insurance pays out upon
your demise.
• Professional Liability Insurance protects against errors while performing your service.
• Property Insurance covers damage to property caused by risks. It can be specialized insurance such as fire, flood, earthquake, and boiler.
• Umbrella Insurance is for major claims affecting your business, home, and auto. It provides for much larger liability coverage than normal.
• Workers Comp Insurance is mandatory if you have employees. It covers medical costs and lost wages in the event your employee is injured on the job.
Any of these policies can be separate or bundled together under one policy.
Those five dogs I groom monthly to pay for my insurance is a well worthwhile investment to protect my assets and livelihood, as well as my peace of mind. ✂