It may be the last thing you want to think about when you’re running a business, but selecting the proper company to cover your commercial car insurance needs can ultimately make your life easier.
Ken Bowman, commercial auto product manager for the Progressive Group of Insurance Cos., says that an accident at a smaller business can be catastrophic for the company, while larger companies have more vehicles and employees, increasing the chances of an accident. And when an accident does occur, the type of insurance company you’re dealing with can make the difference between the experience being a huge headache and a smooth process.
“Insurance is the product you hope you never have to use, but, when you use it, how it is handled is absolutely the most important thing,” Bowman says.
Bowman offers the following tips to help you make sure you have the right insurance company to meet your needs.
Remember that it’s not all about price. Choosing an insurance company may be partially about price, but it’s about much more than that, Bowman says. Knowing that you are dealing with a company that will be there when you need it is also a major factor. And be sure that the company knows commercial auto risk and understands commercial auto claims because it has experience in those areas.
“There are instances of where this could be the flavor of the day for some companies, and they come in and go out, and companies could be in a bind if something happens,” Bowman says.
Look for companies that have dedicated commercial claims operations and handle their claims in house. If the insurance company uses an outside company to handle claims, it creates the potential for problems during the handoff.
“Now, all of a sudden you are dealing with somebody else you didn’t expect,” Bowman says. “There is potential for dealing with people that haven’t been trained or aren’t experts in the market. You may be hiring the company, but they are just a middle man or outsourcing the activity that is most important to you.”
Look for flexibility. Your business changes over time, and a flexible insurance company can assist you with your needs. If your business is seasonal, then your cash flow is seasonal, and you need a company that will cater to your needs.
“You might want to deal with a company that can allow you to scale up your coverage during the season and potentially scale it back off-season,” Bowman says. “You might also want a company that has a flexible payment plan that allows you to pay for your insurance when cash flow is in season and not paying when out of season.”
Find a company that can accommodate your busy schedule. You have enough to deal with during the workday without having to find time to deal with insurance, as well. Bowman says it’s a good idea to find a company that can support you after-hours or on the weekends. A well-designed Web site that allows you to access information 24-7 is also a bonus.
“Those things create flexibility for small business owners as well as executives that have a day job,” Bowman says.
HOW TO REACH: Progressive Group of Insurance Cos., (888) 806-9598 or www.progressive.com
Insurance doesn’t have to be a major pain if a business owner is able to control the cost.
Ken Bowman, commercial auto product manager for the Progressive Group of Insurance Cos., offers suggestions on how to keep down the cost of insurance.
Know the driving history of the employees driving your vehicles.
“Do I want to look at driving history if I know these people are going to be operating vehicles for me because I know it’s going to influence cost of insurance?” Bowman asks.
The answer is yes. Tracking proof of previous insurance can help you keep costs down.
“It’s in the control of the business to do that,” Bowman says. “If you are an executive in a business using vehicles, you might want to think about that.”
Don’t let your insurance lapse. “Some executives let their insurance lapse, which can be a significant driver in cost when you restart your insurance,” Bowman says.
If there’s a stretch of time when you know you won’t be using your vehicles, scale back on insurance instead of letting it lapse.
“Many construction companies take the winter off and park their vehicles,” he says. “You may not want to have liability insurance in that case because you know you aren’t going to drive that vehicle for four months. Under certain circumstances, you might want to remove your liability insurance, but you might want to keep your physical damage insurance.”