Unfortunately for us contractors, insurance is a must. Gone are the days of skirting by with no insurance or low limits….wait, limits? Yeah limits. And if you don't know yours, it’s time to find it out.
That’s right, in today’s world people can easily sue us and easily win big bucks at the slightest error we may have made – or as is often the case, something we didn't even do.
There’s an old phrase that says “Caution: You are entering and outdoor area where hazards exist.” Well, I guess most people nowadays haven't ever seen that before or don’t know how to pick up their feet. Little accidents such as tripping in a small pothole or slipping on traffic paint can yield the claimant tens of thousands of dollars against your insurance (or, in the case of a woman falling because of a small pothole, millions!)
The sad part is that your own insurance company often won’t fight the frivolous claims and instead pays out because that’s cheaper than lengthy litigation.
What used to be great coverage of $100,000 is now replaced by policies in excess of $2,000,000….That’s right, seven digits. Even worse, many of us are forced to buy umbrella policies to further broaden that already extensive coverage.
So the first lesson of the day is to know your limits -- and probably increase them.
The next part of the insurance fiasco is the agent. Usually we get to like our agents, become friends etc. Often I hear that “my guy was my folk’s guy” and so on. So finding an agent can be easy...but what about switching? That’s the hard part.
I just completed an agent change of record and am on my third agent in 20 years (that’s well below the suggested model of switching to a different insurance company every two years, and new agent every four).
But why would you want to switch anyway? Well, the biggest reason is complacency. Agents can become complacent, meaning they don't want to shop your policies as much as they did when they were trying to earn your business.
Let’s face it: I’m sure most of us can get complacent with our long-term clients, but in the insurance business complacency can cost you big bucks!
What makes changing agents is the fact that your agent has probably developed a close relationship with you over the years, and he is your guy. Maybe he has seen you through a few claims, or just has been there as you've grown.
My case with Agent #2, as I’ll call him, is that he just didn't want to shop policies as he should have on our renewals. When I finally decided to get quotes, Agent #3, being hungry for business, shopped everywhere and subsequently found us a new company that saved us a few thousand dollars -- and was able to increase our limits. That’s a win-win in my book and I feel I can sleep better at night with the higher limits as liability really does scare the hell out of me in this business.
The challenge came when I had to send the email to tell agent #2 that we were switching. I just cut to the point and didn't try and back pedal. I offered my thanks for his service over the years and promised to give him a shot next round. He responded cordially and even admitted he hadn't done his job well with us, and he said he looked forward to another shot next time.
All in all, I think that suggestion to change companies every two years and agents every four years holds true…Now if we can just convince people to watch their feet a little more and expect hazards in outdoor areas, we would be all-around winners.