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Finding the Right Insurance to Protect Your Business

By Ira Gostin © 2003 www.gostin.com

It's always a good idea to perform an annual review of your insurance needs and coverage. But what does it all mean? Thanks to some help from my insurance broker, Kathy Hart of Comstock Insurance in Reno, here are some tips for selecting the right coverage. I have also included some terminology so you can understand what's going on!

1. Find yourself an insurance broker. Not that there is anything wrong with going through an agent associated with a single agency, but a broker will shop around through the various companies that they use, and provide you with the best possible rate.
   
   
2. Before you meet with a broker, get prepared! Make sure you have a current list of all of your equipment. That list should have equipment descriptions, serial numbers and dates of purchase. If you are a studio photographer, do you know how much foot traffic you average a month? Is anything you do that is considered high risk? Do you need location coverage or do you only work in the studio? In my situation, all of my camera gear goes on location, so it is covered under an Inland Marine policy that is attached to my liability policy. This covers everything of mine that travels, including my laptop, Palm PDA, cell phone etc.
   
   Every professional photographer will have different needs, so have prepared materials to answer questions about your business. Make sure you bring some of your marketing materials to leave with the broker so he or she can really understand what you do.
   
   (Note: Many of you are members of an association that offers insurance - APA, PPA, ASMP etc. Interview the association's insurance program just like you would an independent broker. I know that, in my situation, my policy is better and cheaper than anything offered me by my associations. Not that they offer bad policies, but there are nuances that make my local policy better. Every state and local is different, so shop around!)
   
   
3. Ask questions. Ask your broker if they charge for Certificates of Insurance. How fast can they turn them around? (My agency does not charge and can turn them within a couple hours.) Make sure that you have someone on your team who has your interests at heart.
   
   
4. Now that you found a broker, it's time to find a carrier to provide your insurance needs. Ask if they are photographer-friendly. Your broker can talk to the underwriters, explain your needs, and find you the best policy. My insurance is with Safeco, and according to Kathy, Hartford and Zurich seem photographer friendly as well.
   
   Stay away from adding umbrellas, or floaters, to your homeowner's policy. More than likely, their coverage amounts won't work for you, and most homeowner policies dislike small business and should be avoided. Kathy said that, in many situations, a "beginner" small-business policy can be put together for about $500.00 per year. It will be basic coverage, but it will get you started.
   
   

My own selections

• We carry a $2 million policy. That means $1 million per occurrence, $2 million aggregate (or maximum, for the term of the policy-usually a year).
  
• Coverage to replace the equipment if lost or stolen.
  
• Transit coverage.
  
• Portfolio coverage in case it is lost or destroyed in shipping.
  
• Extra coverage for rental or even borrowed gear.
  
• Shipping insurance (no more buying FedEx insurance).
  
• Monthly/quarterly payment plan.
  
• Excellent customer service from our broker.
  
• Coverage for records, cash, receivables, etc.
  
• My worker's comp insurance is all wrapped into the same policy (another plus).
  
• Plus lots of other coverage that I don't know of!
  

Insurance Terminology

• Certificate of insurance -- Usually just a fax that comes from your agent and can be sent, independently, to a client to show coverage.
  
• Liability - Coverage in case you cause injury or damage to someone or something in the course of your work.
  
• Inland Marine - Coverage of equipment that leaves your business address.
  
• Policy period - The term of the policy, usually a year.
  
• Umbrella policy - Extra coverage over and above the policy.
  
• Business personal property - What's in the office or studio that _doesn't_ leave. In my case, that means computers, light boxes, furnishings etc.
  
• Aggregate - Term used to describe the total coverage. No matter how much you've lost, the insurance company won't pay out in excess of the aggregate coverage.
  

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