A Few Important Notes On Insurance
In the last ten to fifteen years of working with clients and potential clients, we have seen quite a few unique situations, to say the least. It seems like, in the past year, our website has received quite a few requests for quotes for insurance of all kinds, and some companies that have been in business for several years have had no insurance coverage of any kind, which, to us, is mind boggling.
In one case, the company had been in business for eight years installing equipment, and the equipment required plumbing work, which, as we all know if not done properly, can be a huge claim waiting to happen. In talking with this person, it became evident that he just couldn’t imagine a situation where he would ever need General Liability Insurance coverage. His only reason to get the insurance was that a huge contract that he was recently awarded required it. In this instance, we decided, after talking with several carriers, that we would pass on quoting this risk. In fact, most of the carriers we had spoken to about this account declined to even look at it once they found out that the client had been in for business eight years, and during that time, did not purchase Arizona General Liability insurance coverage.
Please note that insurance companies really look unfavorably on these types of accounts, and many of them will not even offer terms. The few carriers that would look at the risk offered terms with a much higher premium than they normally would and included strict exclusions to protect themselves that first year. In another instance, a company that is well known and has been in business for many years engaged us to look for Errors & Omissions coverage for them. Originally, we thought that they were either shopping for a new carrier or broker, but it turned out that they have never had E & O coverage even though they did have a General Liability policy.
This is really unusual because this company is in the information business, and having a General Liability Insurance policy will not provide any coverage for their services should they find themselves at the wrong end of a claim. We are now in the process of trying to find E & O coverage for this company, but, again, the premium will be much higher, and some carriers we have contacted have already declined to quote due to the fact that this company has been in business for years with no E & O coverage.
In talking with clients who are just starting out in business, we emphasize that acquiring the proper insurance coverage in the beginning is the best course of action they can take. The first reason is quite obvious: every business needs to protect themselves from the unexpected claim, and having General Liability Insurance and/or E & O/Professional Liability Insurance is a very prudent step. Another very good reason for acquiring AZ liability insurance coverage when you start your company is developing a track record that the insurance carriers can follow. Each year that you have insurance coverage and report no claims, you become a better risk for the insurance carriers, and your rates can be lower, and your company will be more attractive to other insurance carriers should you decide to switch carriers. To fully understand the advantages of putting the proper insurance plan into place for your company and what these policies can mean for your company, the smart move would be to sit down with an experienced and professional insurance broker who can thoroughly explain your options. The brokers at PJO Insurance Brokerage would be more than happy to help you through this process.
PJO Insurance Brokerage
By Patrick O’ Neill
4103 E. Prickly Pear Trail
Phoenix, Arizona 85050