Craig's Excellent Insurance Shopping Adventure - Part 1
Jul
15
Written by:
7/15/2010 5:41 PM
I know most of us would just as soon have a root canal as to shop for business insurance, but sometimes we just have to muster up our courage and climb into the chair. I got a notice this spring that my business insurance was being dropped by the policy underwriter. This was not because of anything I did or didn't do, but because the underwriter no longer had an appetite for insuring furniture operations. Most likely they had one or more big settlements and got cold feet, and bailed. I have had business insurance for 33 years and never made a claim (I don't think anyone has ever accused the insurance industry of being entirely rational). But, rather than focusing on the dentist's drill, I decided to look at this as an opportunity to reevaluate my coverage, and shop around a bit. The next few installments of this blog will be focused on what I learned in the process.
First a little background...
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American Craft Council and Other Organizations' Group Business Insurance Plans
In the late 70's, American Craft Council (ACC) started a "professional membership" category, with a number of benefits for professional craft artists, including a business insurance program geared to the needs of craft artists. I believe the plan has changed about three times over the years. A growing list of exclusions imposed by the plan underwriter (excluding furniture makers, jewelers, candle makers, and artists living in certain states) eventually sent ACC to its current agency and underwriter. Those previous two plans continued to operate independently.
Some other organizations including the American Association of Woodturners (AAW), Artist Blacksmith Association of North America (ABANA), and Fractured Atlas offer business insurance programs to their members. See listing
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I opened my studio doors in 1977, and purchased a property insurance plan offered through the American Craft Council, and purchased "manufacturer's and contractor's" liability coverage and workers' compensation coverage from a local independent insurance agency that specialized in business coverage. Later, ACC moved their insurance to another agency and the new plan included liability-at a significant cost savings over what I was paying. I moved to that plan and stuck with it for about 30 years adding coverage for my building when I built my current studio. Over the years the agents changed, underwriters changed, and the plan was moved to different offices and cities each time the company reorganized. I try to be on speaking terms with my insurance agents, so I can get questions answered promptly, and more importantly, so I have a person to talk to, and hopefully will go to bat for me if I ever have to make a claim. While I was a little uncomfortable with being shuttled between offices and agents, inertia is a powerful force.
But, not to worry, the new agent contacted me, and the agency had already found another underwriter, and a proposal for new coverage was on its way.
I decided to start with that proposal and to request one from Dave Kotary from Brower Insurance. Dave has run a craft insurance plan in Ohio and surrounding states for about 25 years, and I first encountered him when he was a guest on the Furniture Society forum in a discussion sponsored by CERF. As I became more involved with CERF+ I have relied upon him for insurance information and as a frequent guest on CERF+'s insurance presentations.
I have spent most of my career trying to avoid insurance salesmen, especially those who harangue a business on a daily basis. Since I began working on CERF+'s Insurance Initiative, I have met many insurance agents, and none have been cold-hearted mercinaries. In fact all have been really friendly, professional, and honest people - and many have had great senses of humor. I guess it stands to reason, when you are in a field that makes you everyone's whipping boy - it pays to have a sense of humor about your line of work. For the second quote, I might have started with any of these agents, with our onling listing of arts-related business insurance plans, or with a local agent that specializes in commercial lines, but I had a head start with Mr. Kotary.
Next step, how much insurance?
Everyone I have met who has had a major business loss has told me that they had underestimated the value of their business property. When you forget about a box of router bits, you have forgotten about a thousand dollars or so. So I had a gut feeling that I was underinsured. So the first thing was to get an estimate of how much insurance I needed.
Stay tuned for the next installment. Subscribe
Part 2 - Studio Inventory