Buy a Business Insurance Agency – Read, Before you Buy or Sell!
You might be in the market to buy a business, more specifically, an insurance agency, or agencies.
This is great news, since the industry has shifted for the online transformation of many new insurance model types.
However, before you can shift your attention to this new market trend in the insurance industry,
you have to narrow down what type of agency or agencies you are in the market to buy or sell.
For example, standard insurance agency versus a non standard agency.
Commercial Lines vs. Personal Lines Agencies?
After you narrow this insurance tier group, your next area to examine is whether you want
to buy a commercial agency or a personal lines agency.
You also have the option to buy a mixed insurance agency book,
meaning a percentage of commercial to personal lines.
This article review, will look at the the commercial end of the insurance agency,
and some of the most common questions
surrounding the commercial trucking field from both
insureds and industry professionals’ perspectives.
Stats were accumulated from online sources, such as yahoo answers and Quora.
What is Trip Lease Coverage?
Trip leases pose a different set of problems. This is because they too, can involve
arrangements whereby the lessee will retain responsibility.
This responsibility is for the leased vehicles, but it can also include the inverse situation
In this type scenario, the lessor agrees to indemnify the lessee for damage.
This is because of a result from operation of their leased vehicle.
This must carry be carried on their own policy with
the lessee add-ended, as an additional insured.
Common questions and answers to the trucking industry?
Let’s look at the policy definitions and conditions that surround a policy.
This is important, since most of these answers are also answers
to some common questions regarding this industry.
So, you solve 2 issues with one example.
What is Common Policy Talk?
For the most part, all insurance policies will contain common definitions and conditions
that are specifically catered to the mechanics of that policy.
It will include not just the definitions but also how they are administered.
Many of these policy provisions will apply to one or more policies at a time.
For example, ISO’s Common Policy Conditions form is a mandatory attachment
for several of the lines of the coverage included in their package policies.
We will show a list of the common manuscript definitions and conditions endorsements
that have been developed over the years to broaden coverage.
This is seen in a variety of insurance policies.
You will want to keep in mind, that a number of these are already included in
many policies without the need for separate manuscript wording.
What is Broadened Named Insured Endorsement?
This endorsement form is used to extend a policy to provide automatic coverage.
This coverage is for any organizations that a trucker should:
- or will acquire during the policy year.
Currently, the only ISO policy that provides any automatic coverage for maned insures is the commercial general liability form.
What is CGL Form?
Even here, the CGL policies named insured provision is
limited to 90 days for newly acquired entities.
These extended words could be appropriate for many different polices,
but is most often added to liability and umbrella forms.
Extended Notice of Cancellation or Non-Renewal?
This is a common question of concern for most policy holders,
but especially the trucking or commercial industry.
This is because there is a lot at stake. Unlike a personal insurance policy,
a commercial or trucker’s policy includes the live hood of the driver.
The truck is a business so, it must be insured on that basis.
It has many components and layers, and each should be reviewed for exposure and liability risks.
The extended Notice of Cancellation or non-renewal form is an
endorsement that is used to modify a policy’s cancellation clause.
This is so that a 60-day notice must be given prior to the insured in
the event a policy is canceled or non-renewed.
This could be important since most policies only require 10 to 30 days’ notice.
This is may not be sufficient time for adequate remarking of the policy.
So, from a sales perspective, this piece of business would need
to be worked prior to 10 -to 30 days in advance.
Also, from a consumer’s perspective, it is a nice window of advance notification,
that is before the 10-30-day window, for cancellation or non-renewal notice.
This is because, it allows plenty of time to shop and compare rates
before the current policy expires or cancels out.
Broadened Notice of Cancellation or Non-renewal?
This broaden form extends notification beyond the name insured. Meaning, any additional
insureds listed on the policy would also be notified of the policy status.
This helps preserves the policy lifespan in case the name insured is not reachable.
Also, it protects any additional insureds on the policy from potential loss or future claims.
So, it is a common policy condition form that is an endorsement. It is used to modify the
common policy clause, where only the name insured is responsible for being contacted and or notified.
This endorsement will also require the insurance company to contact all additional insureds listed on the policy.
So, if you are an additional insured on a policy, make sure that you inquire about this endorsement.
Notice of Material Change?
There is an endorsement that requires an insurance company to notify
insured in writing any material changes or premium increases.
This notice must be at least 60 days prior to the renewal date.
As with the cancellation endorsement, this type of notification will
ensure that the proper re-marketing time is provided if needed.
Modified Examination of Records
With most standard insurance policies, an insurance company can examine and audit
a truckers’ records for up to 3 years. The kicker is, after the policy expiration date.
So, if you think about it, it can possibly cause a problem.
For example, what if an insurance company excises this option and
goes back the full 3 years to assess any additional charges.
You can see where this can seem unfair. Such charges could prove
extremely difficult to collect and may create bad feelings with many insures.
So, this endorsement restricts this audit period to 1 year from the expiration date instead of 3 years.
Those 2 additional years help a lot, not just in the operations of a
business, but in the mindsets of the business owners, or truckers in this case.
Records of Claims?
This is an addition to a policy or endorsement. It will assure that a trucker be provided
with information concerning claims payments and expenses under the policy.
It will allow an insured the right to request details of the clam activities from their insurance company.
This request can be asked at any time as well.
This could be important for critical lines of business where frequent claims can be made or occur.
For example, workers compensation, vehicle insurance, etc.
What is Unintentional Failure to Disclose?
This add on or policy endorsement will ensure coverage cannot
be denied for claims resulting from undisclosed hazards.
Think about this statement. This is important on so many levels.
First, because many standards policies exclude coverage if an insures does not disclose all hazards.
This may also exist at the inception of the policy, even if it was unintentional.
This is most commonly seen in general liability and umbrella forms.
Delayed Notice of Occurrence
Many policies will contain a loss reported clause.
In this loss reported clause, it will state that losses must be reported to the insurance
company when the insured becomes aware of a loss or potential loss.
This can be amended reduce the change of a
claim denial because, an employee fails to
report a claim to the appropriate company
officer, all in a timely manner.
Loss Adjuster Expenses
In concluding with this endorsement list, all property and inland marine
forms contain provisions that will lay out the duties required of an insured.
These duties are to be fulfilled in the case of a loss. Often, an insured may incur a
variety of expenses to fulfill these duties. This may not be
covered however, by the responding policy.
So, common examples of uncovered expenses might include costs for attorneys or
accountants to verify settlement figures, engineering services
if there is a question as to how a loss resulted.
Other examples include:
- hard costs related to preparation,
- copying and mailing of proof of loss requirements,
- personnel costs associated with the determination of loss values,
- and fees for independent appraisers to verify insurable loss values.
Even though policies may provide reimbursement for some of these exposures, it may
be necessary to attach an additional endorsement to provide broader loss adjustment expenses protection.
This is such an invaluable endorsement, they all are.
All these endorsements serve different purposes and act as illustration to
the proper coverage and duty role of each party involved.
Another large area of interest is crime and crime
detection in terms of insurance coverage.
This list of definitions that you will find under
your policy sheets, will cover the sections
of crime and what it exactly entails in terms of coverage.
Broadened Definitions of Covered Individuals
This is a term that refers to the practice of attaching one or more endorsements to a policy.
Not just any policy, an employee dishonesty policy.
This broadened definition would examine the definition
of insured employees to include several types of individuals.
These individuals are not covered by the standard wording found on the policy.
For example, such people including:
- independent contractors so forth.
Computer Crime Policy?
This is such an important component of the cyber security of your policy. This is a type of
hybrid crime for that insures both loss resulting from theft or money, as well as another.
This other coverage comes from loss resulting
from the vandalism or theft of information from computer files.
This type of policy insures several exposures that must normally be
covered with several separate crime and inland marine forms.
This is a type of insurance used to protect against:
- loss or damage to money,
- or other property
This is the result of computer fraud.
Computer fraud is defined as, theft of property by and directly related to the use of computer.
ISO writes this as coverage F, and includes it as a mandatory or
an optional coverage in many crimes plans they offer.
Nonstandard Insurance Forms
Some nonstandard forms of this coverage extend to insure against the theft
of media information such as trade secrets, customer lists, and the like.
Therefore, it is so crucial for electronic data to be stored and secured in
areas not accessible as easily from outside parties.
This can be achieved by working your way through the different options available.
Crime Prevention Components
Crime prevention or loss prevention of criminal activities, should be an
important component of your overview safety approach.
Yes. You understand about the safety of the fire preparation plans in place,
but what about the crime sections.
These sections do involve your everyday life if a user of the technology
and in a position accessible to these malicious electronic acts.
Employee Dishonesty – Blanket Basis
This type of insurance already understands that people are people, no matter where they live.
With that said, it is important to understand that this insurance will protect against
the loss of money, securities or other property belonging to an insured or company.
Also, it can be for an insured company that is liable, when caused by employee dishonestly.
This form pays up to the face amount stated on the the policy for
any one loss caused by one or more employees.
ISO writes this as coverage A, and it includes it as a mandatory
or optional coverage in many of their crime plans.
Employee Dishonesty Continued
This is a scheduled basis type policy. This type of insurance will protect against loss
of money, securities or other property belonging to an insured company.
This is a loss for which an insured company is liable.
This is due to the cause by employee dishonesty.
This form pays for this as coverage A and includes it a mandatory
or optional coverage in many of their crime plans.
Concluding Thoughts on Commercial Auto Insurance
As you can see, the difference in commercial auto insurance and commercial trucking insurance is very much the same.
It is the actual type of vehicle that is the varying part of the policy.
Also, the separation between the commercial and personal lines insurance policy was examined throughout this article piece.
This is where the dissection of commercial versus personal policy started.
The difference was the act of business being conducted.
If business was an avenue or apart of the daily use of the vehicle,
then a commercial policy would be more fitted.
This is regardless of what type of vehicle you have under the commercial policy.
A commercial insurance policy can insure, car, van, truck, auto, and so forth.
It is just the vehicle and operation that changes, but the actual job
description use is still the underlying difference. It separates personal use from business use.
Now, your ready to explore your next commercial insurance business to buy!