Small businesses have abundant insurance needs, but even the most highly recommended business insurance policies don’t cover everything. Worse yet, when you’re paying a lot of money for all that insurance, it may feel like adding insult to injury to undergo a serious event and not have your insurance cover it. That’s where specialty insurance comes in – and it’s rarely anywhere close to expensive as your ordinary business coverage.
Specialty insurance plans are made specifically for businesses that need unusual coverage. These business accounts may involve high-risk holdings or feature objects that are not usually covered under standard business insurance 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. Other businesses that typically take out specialty insurance coverage are construction companies and contractors. Builders are frequently sued, so specialty insurance is necessary to negate the risk.
Many insurance providers offer specialty insurance plans to businesses in certain industries. For instance, Liberty Mutual has specialty options for the healthcare, environmental, real estate and energy industries. Underwriting is more flexible with this type of coverage, since nontraditional coverage is necessary.
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 recover financially. 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.
Quotes for specialty insurance depend on your industry and your company’s risk of being sued. You can add an umbrella policy to increase the maximum payouts of your plan.
Specialty insurance is necessary for items that your ordinary homeowners or automobile insurance doesn’t cover. The following types of specialty insurance can help fill in the gaps:
Other cases of specialty insurance include insurance for unique items, such as for actors who insure their body parts that are considered their best assets and moneymakers. 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:
Specialty insurance isn’t intended to be a one-size-fits-all policy; the 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.
A key step is confirming that the policies you already have don’t cover your specialty needs. Even if they don’t, you may not need an entirely new policy. In some cases, the insurer may be able to add special inclusions to your standard policy.
Research multiple specialty insurance providers to see the variety of policies they carry. Seek out a specialty insurance company that answers your questions thoroughly. Review their experience in the industry and their records with rating agencies like the Better Business Bureau.
As you search for specialty insurance plans, do your best to work only 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 protection for 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 you’ve exhausted your initial coverage.
Insurance coverage changes at a breakneck speed. As you search for your plan, you should 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. With this information at hand, you can bargain with service providers and get the best deal for your budget.
When you’re pricing specialty insurance, ask for a quote from your current insurance provider. If a competitor gives you a lower quote for the same service, take that back to your current provider to see if it can match the lower cost.