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Specialty Insurance Basics

business.com editorial staff
business.com editorial staff

Find the specialty insurance for your business needs.

  • Specialty insurance is intended to cover businesses with nontraditional needs. The construction, environmental, healthcare and energy industries are examples of specialty insurance industries.
  • Quotes for specialty insurance depend on your industry and the risk your company faces of being sued. You can add an umbrella policy as a way to increase maximum payout amounts of your plan.
  • E&O is a standard type of specialty insurance plan. This coverage protects against negligence claims and will pay judgments and legal fees.

What is specialty insurance?

Specialty insurance plans are made specifically for businesses that need unusual coverage. These business accounts may involve high-risk holdings or could feature objects that are not usually covered under standard policies. As an example, guns and antiques are two items that require specialty insurance in order for the investment to be protected adequately.

Any type of business that serves clients who engage in high-risk behavior will have to research specialty insurance plans. For instance, a skydiving company may be considered very high risk and be subject to higher incidences of liability claims. Construction companies are another example of businesses that typically take out specialty insurance coverage. Builders are frequently sued, so specialty insurance is needed to negate the risk.

Many insurance providers offer specialty insurance plans to those in key industries. For instance, Liberty Mutual has specialty options for those in the healthcare, environmental, real estate and energy industries. Underwriting is more flexible with this type of coverage, since nontraditional coverage is needed.

Like other types of insurance plans, specialty insurance offers protection against lawsuits. If a business is sued and a judgment made against it, it needs to be able to financially recover. Many issues a business faces are covered under a specialty policy called errors and omissions, or E&O. With E&O, the company is protected against negligence lawsuits. The policy will have limits, but it traditionally covers judgments, court fees and legal fees.

A common misconception is that specialty insurance is not affordable. Many rates are surprisingly competitive, depending on your specific needs. Always research insurance agents before choosing a provider. If your business has unusual insurance requirements, find a referral to companies that have experience in that type of specialized coverage.      

Specialty insurance is necessary for items not covered by your ordinary homeowners or automobile insurance. This can include flood coverage, identity theft insurance, mobile home coverage, motorcycle insurance, personal watercraft coverage, boat insurance, pet insurance, private mortgage insurance, travel insurance, title insurance or renters insurance. Other cases of specialty insurance include insurance for unique items, such as for actors who insure their body parts (the ones that are considered their best assets and moneymakers), and insurance for a particular project or event that you are spearheading. Specialty insurance for business can also include coverage for your entire inventory in case of a fire or theft.

You should take these steps to make the most of specialty insurance:

  1. Begin by understanding the different types of specialty insurance. Specialty insurance isn't intended to be a one-size-fits-all policy. Underwriting will be specific to your company's industry and needs. For instance, construction and healthcare businesses both need specialty insurance but will have very different coverage inclusions.

  2. Check out various specialty insurance companies. Review their experience in the industry and check out their records through agencies like the Better Business Bureau.

  3. Look at the latest specialty insurance coverage and industry news and information. Insurance coverage changes at a breakneck speed. Stay abreast of providers' current limitations and inclusions.

Start with basic information on insurance for special needs.

Look at information on insurance for special needs as well as how to choose from the different types of specialty business insurance. In some cases, you may not need an entire new policy to cover your company's assets; the insurer may be able to add inclusions onto your standard policy.

Check out various specialty insurance companies.

Take a look at specialty insurance providers to see the variety of policies they carry. Seek out a specialty insurance company that answers your questions thoroughly. Work with agents who can vet companies and collect quotes. Many agents collect commissions from insurance providers and don't require any fees from clients. When you review policy inclusions, calculate whether the amounts will be adequate to protect your assets against judgments. Speak to insurance providers about the option for an umbrella policy. An umbrella policy has a minimal annual cost and pays out claims when your initial coverage has been exhausted.

Find out the latest news on specialty insurance.

Stay up to date with information on insurance for special needs. Find out what specialty insurance other providers are offering and what trends are affecting the industry.

When pricing specialty insurance, ask for a quote from your current insurance provider. If a competitor comes back with a lower quote for the same service, take that back to your service provider to see if it can match the competitor.

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