As business-insurance premiums rise and coverage decreases, building service contractors must choose insurance providers who will provide them excellent service at a reasonable and fair price.

The first thing to note is that there are two types of insurance agents — independent agents and company agents (also sometimes called direct writers). Independent insurance agents have different insurance companies they access. Company agents or direct writers tend to be employees of the insurance company or they’re contracted with the insurance company in an exclusive arrangement.

The best way for BSCs to find an agent is to talk to people they respect: business associates, friendly competitors and industry associations. Look for an agent with a reputation for trust and respect in the area. It may be beneficial to choose an established agency with a track record of 25 or more years.

Agents should provide contractors with knowledge of the marketplace, a high level of service and a quick response when there are claims. Also, agents should alert contractors when coverage needs to be expanded or dropped.

Once BSCs choose an agent, they should look over the new policy in detail with their agent to make sure that they know and understand everything that is declared in the document.

Then, as the policy’s term progresses, stay on top of the policy and individual needs. Routinely ask the following questions:

  • Is the agent knowledgeable about the latest commercial insurance?

  • Does the agent ask questions about the cleaning industry? Is the agent knowledgeable about the cleaning industry?

  • Are telephone calls returned quickly?

  • When you call the agent for a Certificate of Insurance, do they provide it to you the same day or within a reasonable amount of time?

  • Are policy updates on time? Are there monthly, quarterly, and yearly follow-ups on claims?

Affirmative answers to these questions may help to build trust and confidence in an agent.
To help avoid possible future problems with the agent, it’s a good idea to understand how the policy premium is developed and read all insurance-related mail on a regular basis. BSCs should also document all phone calls and keep a record of correspondence in case problems do arise. Finally, contractors should never cancel a policy in the middle of a term.

Three to four months before a policy comes up for renewal, the insurance buyer and agent should meet and talk about the coverage, expectations, and what bits of communication are missing between agent, insurance company and client.

At that point, if an agreement can’t be reached, it may be time to start the process over.

Excerpted from the October 2004 issue of Contracting Profits.