An email I received recently asking some further info. on insurance:

Steve,

We bought your course on starting a window washing business several weeks ago and are finishing up the business set-up process.  I initially contacted my auto/home insurance provider (State Farm) but they said they do not write these policies for businesses less than 2 years old.  I then went through NetQuote to find a provider for the general liability and bonding insurance.  The individual I was matched to wanted to sell me a $1M/$2M general liability policy and said I didn’t need bonding.  Long story short is this individual turned out to not be very helpful.  So, I am hoping you can help me out with a couple of questions….

1.  Am I required to obtain this insurance through a local provider?
2.  If not, can you recommend someone who can provide this to me (I’m ready to start passing out flyers and the insurance piece of the puzzle is the long pole in the tent)? 

Many thanks,

Dale

P.S. In reading pg. 16 of the "Business Basics" chapter I’m unclear on how general liability and bonding differ – can you provide a brief explanation of the differences? 

My Response:

Hi Dale:

Good morning.

I would not go to places like state farm, allstate, nationwide, or any of the captive insurance agencies like that.  They generally have only one main company to underwrite insurance policies.  You need a commercial agent who is licensed with multiple companies.  This allows them to farm it out to the different companies and get you the best rate and terms. 

As far as net quote, overall I’ve heard from many folks who have had positive experiences with them.  You were simply connected to an agent who was a dud.  It happens.  Not every single insurance agent is as helpful as we want ‘em to be.  I should know. I used to be in the insurance business.  :o )

The bottom line though is that you need to continue to call  "commercial" insurance agents locally.  Just let your fingers do the walking in the yellow pages and make some calls.  Get multiple quotes.  Some companies may want you in business for 2 to 3 years before they’ll write you a policy.  Other companies may require a minimum amount of 1M.  You just need to make the calls until you find the right agent who writes insurance with the right company who will provide you the best policy.  I know for a fact that it’s out there.  But it’ll take more calls then just State Farm and Net Quote.

So question 1 is answered above.  I would definitely go local.  Simply pick up the phone, look through commercial insurance agents, and make the calls.

General liability is for liability issues.  So let’s say that you were to leave your window washing solution outside while cleaning someone’s windows.  If a neighborhood kid tripped over it or slipped in it and broke his leg, your liability policy would pay his medical claim.

Bonding on the other hand is in case you or your employees/subs were to steal or damage any homeowner items.  My policy covered me and up to 5 employees for up to $5000 per incident. 

I do want to make a disclaimer here.  Although I was in the insurance biz and I’m pretty familiar with insurance policies, my focus wasn’t commercial policies.  I was more into life/health/auto/home.  So the above understanding of policy coverages is what I got from my insurance agent who explained it to me.  So I would recommend sitting down with an agent and getting a full explanation of what’s covered and what’s not.

Take care for now.  Have a great weekend.

Regards,

Steve

Filed under: All Blog Posts

Like this post? Subscribe to my RSS feed and get loads more!