#TellAllTuesdays: Guarding the Dream

Navigating the maze of insurance requirements can feel insane at times. What exactly is insurance? Why do you need it, and do you need everything they're asking for? Today, we're going to simplify the complexities of business insurance. So here's what I've learned about insurance and how to use it strategically to protect your business and keep it clear for future opportunities.

1. Commercial General Liability (CGL): This insurance coverage protects against claims of bodily injury or property damage that can occur during business operations. Whether you run a solar installation company or finance or provide consulting services directly to customers, CGL can protect you from the potentially devastating costs of lawsuits.

?2. Automobile Liability Insurance: Automobile liability insurance is essential if your business uses vehicles, whether delivering products or transporting clients. It covers the costs associated with damage or injuries to others caused by vehicles used for your business activities.

3. Umbrella Liability Insurance: Consider this a safety net that provides additional coverage beyond your other liability policies. Umbrella liability kicks in when the costs of a lawsuit exceed the limits of your standard liability coverage, offering an extra layer of security.

4. Workers' Compensation: Required in most states if you have employees, workers' compensation insurance covers medical expenses and a portion of lost wages for employees who become injured or ill on the job. It's not just a legal requirement—it's a crucial protection for your team's welfare.

?5. Errors and Omissions (E&O): For those in professional services like consulting, legal advice, or healthcare, E&O insurance can be a lifesaver. It protects against claims of negligence or harm that supposedly arise from mistakes or failure to perform.

When you are working on projects, some partners may ask for all the insurance above, and others may ask for a certain percentage. Some may ask for $5,000,000 coverage, and others only $3,000,000. So, how could you figure out what makes the most sense?

1. Consult with an Insurance Broker: Discuss the specifics of your project, including the scope of work and the payment you expect to receive. This will help you understand the level of coverage necessary.

2. Evaluate Legal and Contractual Requirements: Ensure you meet any mandatory insurance levels stipulated by law or within the contracts you sign. (These can be negotiable—don't assume you have to agree! A good partner is open to a conversation and coming to a middle ground.)

3. Assess Risks: Understand the potential risks of not having insurance. This will help you decide if specific projects are worth the investment.

4. Seek Waivers: If certain types of insurance do not apply to your operations, discuss obtaining waivers with your client or broker (one time, someone asked us for $10M maritime insurance! As pretty as ships are, we don't work on them so we requested a waiver, provided our rationale and received one!)

5. Flexible Payment Structures: This is especially important if you're starting and budget is a concern. Ask your broker about possible payment plans that allow for monthly installments instead of a lump-sum payment upfront.

6. Shop Around: Comparing offers from different insurance providers can lead to better coverage options and rates. Utilizing software designed to compare insurance policies can streamline this process.

7. Understand Client Requirements: Always review and understand your client's insurance requirements thoroughly to gauge their insurance appetite and align your coverage accordingly (It's OK to tell them their requirements will cost more than what the project is paying you! Try to find a middle ground. Some people are open to the conversation if you justify).

Every project I take on involves these essential steps to protect the dream! It's crucial to balance the willingness to take risks, the investment in larger insurance requests, and the impact/value of your work.

Do you have any more questions on insurance? Feel free to drop them below!

I look forward to seeing you at our next #TellAllTuesday! If you want to join us for a quarterly lunch session, fill out this form, and we'll invite ya: https://pb39uv34732.typeform.com/to/O27bo1rM