By Allison McGreal, Assistant Vice President, PartnerOne Environmental
Let’s face it, some insurance policies are easier to sell than others. Imagine being able to work with a client who wanted to buy coverage at any cost or a carrier who wanted to offer the broadest coverage filled with enhancements, bells, and whistles all for the cheapest price possible. Ok, now pinch yourself and come back to reality! You may run into this situation on occasion but it’s usually rare.
When your client has an obvious pollution exposure such as a contractor handling asbestos or performing mold remediation services, they may recognize the need for coverage and be willing to purchase a policy, but the premium based on their exposures may be more than they considered. Conversely, you may have a carrier willing to offer a minimum premium policy for a non-environmental contractor who doesn’t think they have any pollution exposures. And this, my friends, is where a good agent can step in and save the day! A quality agent will navigate the situation and guide the client to become more comfortable with buying necessary coverages at a reasonable premium.
In many states the statutory limit for Auto liability is $25,000/$50,000/$25,000, but how many insurance agents actually carry such low limits? It’s the bare minimum to comply with the law, but is it adequate to protect your assets? Probably not. So if a “bare bones” policy isn’t sufficient coverage for agents, why would they sell their client a stripped down but inexpensive policy that offers very little protection?
In tough economic times, when folks are cutting back on expenses, Pollution insurance may be one of the first areas considered to be “non-essential.” It would be easy to accept that response and move on to the next account but it’s these difficult situations when we must convince the client of the importance of CPL coverage and truly prove ourselves. If being a good agent were easy, anyone could do it. But we have to set ourselves above the rest and really delve into the clients exposures, fully understand their business and possible coverage gaps, and explain the need for this critical coverage.
One thing to consider when evaluating a risk for CPL coverage is the material that the insured is bringing onto the jobsite. Does the firm use generators requiring fueling? Do they use solvents, glues, or other toxic substances in the course of their operations? Another consideration is the possibility of disturbing or exacerbating existing pollutants at the site. If the contractor is doing any excavation, grading, demolition, or even general construction services, this potential pollution condition exists. An additional area of concern is a non-environmental contractor whose operations may cause an unhealthy indoor environment. An example would be an HVAC contractor. Pollution claims might arise from failure to properly ventilate the area leading to odors, ill employees, or even property damage losses. If the contractor hires subcontractors to perform services on their behalf, there’s also a vicarious liability exposure that may be addressed with a CPL policy. It’s important for the agent to review the client’s daily routine, work practices, operations, methods, and staff to identify any potential exposures that may exist. In most cases, it’s clear that the business would benefit from purchasing a CPL policy. Another helpful tool in selling CPL coverage is to provide actual claims examples and amounts paid to help the client understand that not only do they have an exposure, but often for a reasonable premium, they could have protected themselves from a devastating loss that would hurt their business.
If it were easy to sell insurance, anyone could do it. There’s a reason we have to take a test, carry a license, and keep up with continuing education requirements to stay on top of the industry changes. We are professionals and with that comes responsibility to do what is right for our clients, not what is easy. Ultimately the client may opt to purchase the cheapest policy or to go without coverage at all, but we need to make them aware of the potential pitfalls with taking that path. Much to your surprise, they may buy the pricier option with broader coverage, but you won’t know until you discuss it with them.
Visit our Tools webpage for tools to assist you in overcoming obstacles as you discuss coverages with your clients.