J (COVER STORY )

(COVER STORY )
How to (Almost Painlessly) Shop for Business
Insurance in the Groundwater Industry
Looking for a new policy?
Here’s advice on the best strategies for finding the perfect fit for you.
By Jill Ross
J
ust like paying taxes, purchasing
insurance is a necessity for most
businesses. But wouldn’t it be
nice if the process could be as
painless as possible?
If you arm yourself with the right
information and team up with the right
people, it can be. Here’s what you need
to know before you shop your business
policy.
Find Someone Who Will
Go to Bat for You
When it comes to buying insurance,
it’s important to have someone on your
side who can help you identify the best
insurance carriers in the water well inJill Ross is a former editor of
Water Well Journal and worked
for the National Ground Water
Association from 1996 to 2004.
Today, she does freelance work
from home. She can be reached
at jillross72@gmail.com.
NGWA.org
dustry, get multiple quotes, maneuver
the load of paperwork, and translate
the industry jargon common in the contracts. Most likely, this person will be an
independent insurance broker.
“Unlike an agent (who typically represents one carrier), a broker is independent and is able to represent many
different carriers,” explains Tim Sullivan, program administrator for the
WellGuard insurance program, which is
administered by Willis.
Theoretically, this means brokers are
usually able to find the best coverage
for their clients at the lowest price.
However, if a contractor is currently
with an agent and is comfortable, that
doesn’t always mean it’s a good idea to
dump them.
“Insurance agents and brokers are
like auto mechanics and doctors,”
Sullivan says. “If you trust someone,
don’t get rid of them for price.”
Jason Oswald, an underwriting director for CNA’s program for contractors,
agrees. “It all starts with the agent,” he
says. “It’s a personal relationship and is
someone you should trust.”
Agents can still be a good fit for
smaller “mom and pop” companies that
don’t need a lot of specialized coverage.
Also, good agents will often find the
best coverage for their clients, even if it
is with another carrier.
This can be the case in Michigan, explains Jessica Van Sookema, vice president of marketing with VanWyk Risk and
Financial Services, an independent insurance agency located in Grand Rapids.
The agency has developed a program
with the Michigan Ground Water Association that is underwritten by Secura.
However, she explains, the program is
“open,” which means that a new client
can still go through their existing agent
and get coverage. So, if you are interested in a new program you’ve heard
about, but don’t want to leave your
agent, ask your agent if they would be
able to obtain a quote for you.
BUSINESS INSURANCE/continues on page 22
Water Well Journal March 2010 21/
BUSINESS INSURANCE/from page 21
But, what if you feel you’ve outgrown your current coverage or your
current agent, or are dissatisfied with
their service? There are a few ways to
locate a new broker, according to the
experts.
Go to the Yellow Pages. Look up
insurance brokers and check out the listings. Check to see if they belong to a
professional insurance association, and
see how many insurance companies
they represent. “In this case, the more
the better,” Sullivan explains.
Check with your professional association. Many groundwater associations
offer group insurance plans to their
members, which can save you money on
rates. “You’ll never get as good a rate
as an individual as a group will get,”
explains Steve Bleizeffer, program
administrator for Lackner McLennan
Insurance Ltd. “Go to someone who
knows the industry—who understands
what you do.”
Go online. You can look up and find
an independent broker in your area at
www.iiaba.net, the Independent Insurers
Agents and Brokers of America. Also,
many insurance carriers feature agent
lookup tools on their individual Web
sites.
Ask for referrals. Ask people in the
same line of work if they are satisfied
with the service, coverage, and premium
provided by their insurance carrier. If
you don’t know anyone else to ask, call
your state or national association and
ask for a recommendation.
In many cases, it makes sense to
have at least two brokers—one who specializes in property and casualty, and the
other who understands the ins and outs
of employee benefits, especially health
care. In some cases, you may want to
keep your personal policies (home and
auto) with an agent, except when it
makes sense to combine them for a potential discount.
However, you will want to decide on
one business insurance agent or broker
before you start shopping your policy.
“Don’t call five or six brokers who are
going to knock on all the same doors,”
Bleizeffer cautions.
Get the Right Coverage
The water well drilling industry is a
unique industry with unique insurance
22/ March 2010 Water Well Journal
needs, and as such, a handful of specialized programs have sprung into existence across the nation since the early
1990s.
The WellGuard program, administered by Willis and underwritten by
The Hartford, has worked in partnership
with the National Ground Water Association since 1998 to provide a program
that is tailor-made for the groundwater
contracting business. This program,
along with several other regional and
national insurers, has identified several
areas of coverage that water well drillers
may want to look for when shopping for
a new policy.
Program highlights to look for can
include but are not limited to:
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
Down the hole coverage
Drill rig floater (covers the tools and
equipment not permanently installed
on the rig or service vehicles)
Equipment deductive waiver for antitheft devices, such as LoJack and
National Equipment Register
Environmental impairment/pollution
liability
Flow break-out (containment cost
and property damage)
Inland marine coverage for drilling
rigs
Ice/muskeg/soft soil coverage
International coverage
Loss of use/loss of income coverage
Key person coverage
Rental reimbursement on equipment
Replacement coverage
Contract surety bonds
Theft
Transportation of pollutants
Umbrella coverage
Dividend/reward programs.
Keep in mind, however, that none of
these coverages are required to operate
in the groundwater industry.
“By law, a business owner only
needs to carry workers’ compensation
insurance and vehicle insurance,” Sullivan says. “In addition, if a building or
piece of equipment is financed, the lien
holder may require that they also be insured.” If you rent, he adds, the landlord
may also require property insurance.
Ideally, the insurance policy for your
company will land somewhere in the
middle between the most basic type of
insurance and the most exotic type,
depending on the size and nature of
your business. So, where is your happy
medium? That’s something a good broker will be able to help you figure out.
The Next Step:
Shopping Your Policy
Once you’ve decided on a broker you
feel comfortable with, they will take
your information to the companies they
represent and obtain quotes for you—
ideally, at least three.
Before you ask for a new quote,
however, there are a few things you
can do to make the process go more
smoothly.
“Companies are entitled to get a document called a loss run report from their
carrier,” Sullivan says. “Get one every
year.” A loss run is a report from an insurance company showing claims you
had for a particular policy. It should
show the policy number, effective dates,
and list a claim number, amount paid,
amount reserved, and amount incurred
for each claim. It should also show the
premium paid for the policy.
Also, know your loss ratio, Sullivan
advises. It’s the percentage of claim
paid over premium. If it’s under 100%,
that’s good. If it’s over 100%, on the
other hand, that means the insurance
company has lost money on you.
“If you’re going to shop policies,
make sure all your information is in
order and provide all information up
front,” Oswald advises. In other words,
don’t try to withhold any potentially
negative information. The insurer will
find out.
According to the free guide NetQuote
Guide to Business Insurance (available
at www.netquote.com, an online insurance aggregator service), other documents to gather before you shop a
policy include:
●
●
Company overview. How many
years you have been in business,
your projected and current gross
annual receipts, and the number and
nature of employees.
Your address and building specifications. Is your business run from a
home or a commercial location? If
it’s a commercial location, know the
total customer area, the age of the
building, and what types of tenants
occupy the building.
NGWA.org
●
●
●
Business vehicles. If you have mobile service vehicles, you will need
the names, Social Security numbers,
driver’s license numbers, and the
VIN numbers from each vehicle.
The nature of your business.
Chemical storage. If you use chemicals, some carriers will want to know
where the supplies are stored.
Most insurance policies are written
for one year. So how often should you
ask your broker to shop for a new rate?
“My advice is to get a quote no more
often than every three years,” Sullivan
recommends.
The reason? It’s expensive to write
quotes—an insurance company can
spend up to $1000 writing a single
quote, especially if they send a representative out to a job site to check on
the company. If your company continually requests new quotes from an insurance company, but never purchases, you
risk getting a reputation as a “shopper”—that is, someone who looks but
never buys. Eventually, the insurance
company may decline to invest the time
and money to write you a new quote.
operations that are likely to cause a
liability claim. Some companies may
offer a discount for using the losscontrol service.
You can also look for programs that
offer dividends, or “rebates” that reward
a company’s good claim history.
“If you have good workers’ comp
experience, your company might be eligible for a dividend that’s tied to their
individual policy,” explains Paul Quirk,
sales executive for Capital Bauer, a
company offering a well drillers’ insur-
ance program in the Northeast and the
New England region.
If you are finding it hard to keep up
with payments, check about available
payment plans and look into any
discounts given for lump payments,
Van Sookema advises.
In the end, not all insurance brokers
and policies are created equal, and it’s
up to you to look out for No. 1. Van
Sookema sums it up: “Choose a company and a broker that you believe will
serve your best interests.” WWJ
Controlling Costs
If you don’t want to sacrifice the
quality of your coverage but want to
keep costs down, the NetQuote Guide
to Business Insurance suggests the
following steps:
●
●
●
●
●
Obtain quotes from at least three
companies.
Talk with the insurance company
about flexibility. Some companies
may be more willing than others to
tailor your policy to help control
costs.
Ask about discounts for multiple
policies.
Remember the old insurance adage:
The more risk you assume, the less
premium you pay. (Be careful, however, not to raise deductibles to a
level you can’t afford to pay.)
The best way for every type of business to save on general liability insurance is to maintain a favorable
loss history. This means filing few
or no claims. Ask if your insurance
company provides loss-control services. This service may help you identify areas of your premises or
NGWA.org
Water Well Journal March 2010 23/