Insurance doesn’t have to be a 4 letter word

By Tim Kolacz

As a business owner, I wanted to make sure that all of my vendors provided me the best quality product at the best price and in a timely manner.  I would make sure that I knew the people selling me my goods and that I could trust them and that they weren’t going to rake me over the coals and have me pay a premium for a poor product.

When I did get a poor product, I would not be happy and then ask why I got what I did, the vendor would state, well, that was the best price.  Silly me for having him think that price was the most important factor.  After getting burned once (ok, maybe more than once) I realized that I needed to look at the quality first.

It was then that I needed to define “quality”.  Is it always the best product that would last forever?  Was it a time factor where I could get something off the shelf and my lead time would be lessened so I could then get my end product to my client faster?  It turns out there were several factors and it was a combination of these factors that I would have to use to get what I wanted.

Obtaining quality insurance can take a similar route.  When discussed and presented correctly, some semblance of peace can be found by having the right people work for you and with you, not against you.

Insurance is normally thought of as a cost center.  You pay and pay and pay and not one sale is typically derived from your insurance program.  Or is it?  The right insurance can actually get you a leg up on the competition.  If the insurance carrier you use is rated higher than your competitors, then you might get the job based on their qualifications, even if you are not as qualified.  You may also be provided additional coverage pieces with this carrier which shows additional value to your customer.  I have a customer who bought a larger than normal umbrella policy for a public works project.  While bidding another project, he mentioned this large umbrella coverage.  This swayed the new client to hire him based on his having a greater insurance coverage.

“Insurance premiums are going up and it seems like insurance costs too much” is something that has been said to me over the years.  Suppose you are a transportation company and have 50 drivers, your cost per driver is higher than one with a 100 drivers with similar driving records.  Why?  Because at 50 drivers, there is less premium to cover a loss. Same with taking on that one test load for a potential new client.  You may give away that transport so you can show your worth.  If you have 100 drivers, you can more easily absorb that cost than with 50 drivers.  Insurance premiums are based on risk factors such as type of work you are doing and how many are doing it.  A bunch of office workers have a much lower risk for injury than say a construction worker on scaffolding fifty feet in the air.  The insurance carriers need to plan and adjust their pricing accordingly, just as you adjust your pricing models with changes in materials or labor costs.

The level of service you are provided also comes into play with your insurance program.  Sometimes a broker will only call or come by once a year.  If that works for you, great.  If it doesn’t, then a discussion needs to be had.  You should be able to have a clear conversation with them and be able to talk about a multitude of items.  Updates to your industry, to the insurance landscape in general, increasing rates or that your carrier is leaving the marketplace as soon as it happens would be beneficial so you can plan accordingly.  A good broker should always be looking out for you and your business.  That’s what they get paid to do.

Specific brokers will also have more pull with carriers as they write more business with them.  Just recently a client called and said they had a new company and a new contract that needed to start the next day.  Their current carrier was called and we put in place an entire insurance program in four hours.  The project started the next day without delay.

Good open communication is key to the insurance process going smoothly.  If you can convey what you want, when you want it and how it needs to be presented, we can provide you exactly what you want and when you want it.

And isn’t that the point?

Tim Kolacz works for HUB International Insurance Services, can be reached at 951-779-8730. If he can’t get you what you want, his team certainly can.