Purchasing insurance can be a daunting task for many business owners. It may seem comfortable to just stay with the carrier you have always had and not put yourself through the process of answering questions, getting quotes and making decisions. You have so many other things on your plate. Running your business takes every spare minute of your time.But consider what could happen if you haven’t reviewed your current coverage in several years. Look at your policy and see if the limits are adequate. Chances are, you’ve made some changes to your laundry, such as the purchase of new equipment, since you bought your policy several years ago. While you’re doing this, you may want to get a quote from another company to compare price and coverage. After all, if your current company hasn’t contacted you to review your coverage, maybe you should get another carrier to check into that for you.Here are some things you should know about buying commercial property and liability insurance.PURCHASE YOUR OWN POLICYIf you’ve purchased an existing business, the insurance policy the previous owner had is not transferable. This means you’ll need to purchase your own policy naming you or your corporation as the named insured.Property claims can only be paid to, or on behalf of, the named insured, and defense of liability claims are for the named insured. So if you bought the business, but didn’t buy your own policy, the insurance company is not likely to pay your property claim or defend your liability claim. You must be the named insured, not the previous owner of the business. The day you close on the business is the day you should have your own policy.MAKE SURE YOUR NEEDS ARE METTry to find a carrier that can help you with the specific needs of a laundry owner. You can generally find these carriers’ ads in trade magazines, through equipment salesmen or online. Asking others in the self-service laundry business is also a good way to find a carrier. They already have experience with the insurance company and can relay that information to you.Once you have found a few names, contact two or three and see who gives you the best advice, who asks you the important questions and who seems to be simply interested in selling you a policy. Trust your instincts. If the carrier doesn’t ask if you have drop-off service, they probably don’t know much about laundries.CHECK FOR COMPLAINTSIf you’ve never had a claim, you don’t really know how your insurance company will respond if and when you do have one. When you have the names of the carriers you’re going to approach, check online in the state where the company is headquartered to see if it’s had any complaints filed against it.The National Association of Insurance Commissioners (NAIC) provides complaint information and many other details about the companies you’re thinking of contacting. Check out its Consumer Information Source to get started. You can also find answers to questions about a particular insurance company.KNOW THE AGENTSome companies only work through agents, and others are direct writers. If you’re working with an agent, make sure he or she has your best interests in mind. Ask questions, and if he or she can’t answer them, you could have a problem.Remember, you deal with an agent when buying a policy, but you deal with the company when you have a claim. If the agent failed to tell you something about your coverage, the company will not go back and change things for you. When choosing an agent, make sure you have the utmost trust in that person.Click here for Part 2 of this story, which touches on how to determine the true value of coverage, as well as the importance of being detail-oriented. If you have a question about insurance that you'd like answered, e-mail Ann Hawkins at [email protected].
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].