So, the economy is booming, and either things are picking up for you, or you have decided that you have had enough of working for “the Man” and you are opening your new business. Either way, this blog is for you. Yes, we are going to talk about insurance, but that’s what you come here to read about anyway, right? I mean, you don’t come here just for the classic car stuff, do you? Or had you not realized that this was an insurance website, and bookmarked it as just a good place to get info? Well, I hate to break it to you, but this IS an insurance website, and we do need to keep the lights on around here, so today it’s going to be an insurance intensive blog. Most of the commercial insurance information I’m going to share with you here is going to be sort of generalized, but some may apply specifically to our big two cites where we write the most commercial insurance; Dallas and San Diego.
So why do you need commercial insurance? Let’s say you are a painter here in Dallas. Things are picking up, and you almost can’t keep up with the business. Insurance is just another expense taking away from your bottom line though, right? I man, you aren’t ever going to make a mistake big enough to need a million dollar liability policy, right? That’s just crazy? Right? Right?
Wrong. So I will tell you from my humble experience as a painter. (Yes, that’s right dear reader, your humble author once wielded the brush and spraygun for a living.) I was in my twenties, and was working for another friend of mine who was just a little older, but had come up with the pawn money to buy a spray rig and print business cards. It was a boom time then in Dallas as well, and he thought that commercial insurance was for the big guys. Sadly, he just didn’t count on your humble author to paint for him, he also had another person working with me who wasn’t much smarter than a rock. We two were working in a recently renovated condo one day, and while I painted the kitchen, he was busy working upstairs in the loft area, doing some cut ins around the edge. I was busy spraying, and when I turned the compressor off, I heard a very large crash. A very large crash. I ran out of the kitchen only to slip in the rapidly spreading pool of white paint that now covered the recently laid hardwood floors. One lesson I learned that day is that no matter how many rags you have, they will never be enough to mop up the paint you have spilled on a beautiful new floor. The lesson my friend learned? That insurance would have been a better investment than the matching T shirts he made us wear. As this process went on and on the homeowner got more and more upset, and the general contractor got more and more upset, and my friend went out of business. He didn’t have the money to pay for the repairs, and he just had to dry up and blow away. Commercial insurance for a painter is cheap – it probably would have cost him less than $100 a month to cover himself and let the insurance deal with it. Last I heard, he worked at a Blockbuster…
“What does that have to do with me?”, you say a little smugly. Smug mostly because you are a photographer, but mostly smug because you know that a photographer doesn’t have to worry about commercial liability insurance. “I’m not going to spill paint everywhere.”. Oh yeah? Paint is small bones compared to what a photographer can be sued for. This one comes from a friend of mine, but I was at the wedding, so I can count this among my own experiences. She had a wonderful wedding – the champagne was flowing like wine, the cakes were delicious, the meat was either chicken or beef (vegetarian by special request), and the photographer was everywhere, flash bulbs a popping, waving his finger to get your attention, and just being an all around good documentarian. He went home, plugged the photos into his computer, and went to sleep. During the night, something mysterious happened, and all of her wedding photos were lost due to the mysteries of computers and electricity. Just gone, as if it never happened. What could our intrepid photographer do in this case? Not a thing, but suffer her wrath, and bad reviews, and try to fend off her lawsuits, and try to put back together the deposit money she had paid him a long time ago. Or, he could simply call his insurance company and claim his electronic document coverage, and see if they could recover what was gone. Or he could let the company fend off her lawsuits. Either way, he would have been able to continue business as usual. The kicker? Insurance for him would have been cheap.
So both of these examples are things that actually happened – things that the person who should have bought insurance was actually responsible for. What if you are a contractor (or anyone else, really) and just meet a person who has the money to make your life harder – even though you have done no wrong? Pull up a log and let me tell you my third and final story. I once had a client who was a general contractor – and a good one who worked in your higher end homes. I had done his insurance for years, and he was an excellent risk who guaranteed his work, had good insurance for his guys, etc. I even referred him to our clients when they didn’t know anyone. He was hired by a woman to remodel her house, and he did a fantastic job, and in fact was so proud of his work that he had featured some of her project on his website as examples of the quality of work. He was as pleased as punch, and when he went to present her with the bill, there were suddenly problems, and she presented him with a lawsuit. And then another, and then another. She just didn’t like him, and rather than letting him try to make it right, she decided to sue. Luckily, he did have commercial insurance, and the insurance company was there to defend his lawsuits. Again and again, until she gave up. Ultimately she ended up not paying him at all, but rather than losing the pay he expected and every dime he owned, he had the insurance company there to fend off her lawsuits.
I’m going to stop here, because I could continue telling you horror stories all day; I’ve been in this business for a while, and have dealt with many business owners and commercial insurance policies. If you are thinking of starting your business, or have even been operating without insurance for a while, then it’s time to consider commercial insurance. Remember, you don’t have to be in the wrong in order to get sued, you just have to bump up against someone who has more time on their hands to file lawsuits than you do. They don’t have to get a judgment to cost you money; all they have to do is find a lawyer willing to file. You have to defend yourself and your business, and in a lot of cases, the lawyer fees for one case are more than it would have cost you to put some insurance company lawyers on your side. Insurance is something that lots of small companies and contractors think is “too expensive”, but it’s actually a lot more expensive to go without. Call us today and see just how inexpensive commercial insurance can be. If you at least do that, I’ll feel better, and you can make an informed decision as a business owner. Half of the people we talk to about commercial insurance are shocked at how inexpensive it can be, and how much value they get for their dollar. Next time I will discuss some of that added value, but for me the liability coverage has the most value – you get an insurance lawyer at your disposal for pennies on the dollar – and those people are bulldogs. I know for sure you don’t want to be on the other side of that transaction.