It's part of proper business planning. Making sure that you have all of the right kinds of insurance covering and protecting your business, yourself, your family, and your employees. Usually, we place the implementation of this part of our business plan into the hands of an insurance agent. Sometimes, that agent is a trusted advisor who we met through a trusted referral. Sometimes, it's a relative or friend who we almost feel obligated to do business with. Most of the time, it's an agent we chose with a dart and the yellow pages.

I am not an expert in what kinds of insurance coverage you should purchase for your business. In fact, there are many speakers and trainers in our industry who are much better qualified to help you make sure you have the right kinds of business insurance for your cleaning, restoration, or remediation business. What I do hear all the time are the literal horror stories of a business that thought they had coverage for a certain circumstance that they did not. The worst part of this is that there is only one way to know that you are properly covered for a certain loss. That is, to experience it firsthand, and then to find out you are not covered like you thought you were.

You are probably not an expert in insurance either. You may have picked up a few things along the way at industry courses. You may have formed strong opinions about your coverage by what your insurance agent has told you. You and I may even find ourselves disagreeing about whether you do or do not have the right kind of, or enough of, a certain coverage. The problem is that the only way for our argument to be absolutely settled is for the event to happen that you purchased the coverage for, to see who was right.

So what should a business owner do? We recommend you and your agent sit down together for an insurance audit. Sometimes the best way to know whether you have the proper coverage is to simply go through a series of worst case scenarios with your agent and see if you are covered for those events. Many business owners are wary of doing this. They are afraid that if their agent really properly understood all the exposures their company faces that their policies would cost too much.  But it is always after the event that they wish they had done this.

How do you do this? First understand the basic casualty and liability coverage's. Your company probably has a "business liability policy". It covers many parts of your business. For example, if one of your technicians knocks over an expensive lamp and breaks it, after your deductible, you are probably covered for its replacement. What it most likely does not cover is damage you may cause to the carpet or fabric you are cleaning by your cleaning operations. That is a different kind of coverage that is usually more expensive. It's one thing to not be covered if you cause a jacquard upholstery fabric to bleed and you have to pay to have it recovered. It's a completely different problem for your business if you cause a $25,000 Oriental rug to bleed. Then there is the coverage on your van and equipment. Your auto insurance is involved. You may have a marine policy that covers its contents. But for how much? You may well have lost track of how much you have invested in your truck mount, hose reels, wands and power wands, air movers, dehumidifiers, chemicals and more. Suppose an accident or fire totally destroys your van and everything in it. How much would you really be covered for? Then there is coverage for your customer's belongings that are under your care, custody, and control. What happens if those items are stolen or destroyed or damaged while they are under your control?

Why do I know this is a problem for our industry? Because not a month goes by that a cleaner or restorer who I respect and admire, who has taken the time to get educated and certified has some kind of calamity befall their business. They find out they were not covered for everything they thought they were. They call their trusted friends and advisors in the industry asking for help. They angrily confront their insurance agents. They contact state insurance commissioners. They talk about hiring lawyers. They talk to product suppliers about whether their insurance might cover the loss. It is then and unfortunately only then they wish they had taken the time to do an insurance audit and ask questions, lots of questions, about their coverage's.

How do you do this? It's quite simple. Write down a whole bunch of worst case scenarios. Make them from the extreme (My van catches on fire, catches the two nearest houses on fire and they all burn to the ground) to the almost silly? (What happens if the cat gets caught with my vacuum hose?) Make sure you cover all of the services you do - cleaning, restoration, remediation - in your questions. Take a tape recorder with you to the session. No, that probably would not hold up in court, but it will make the agent think twice about just telling you what they know you want to hear, or to make "educated guesses." Make sure your insurance agent calmly and carefully goes through each scenario with what coverage that would require and how much it would cost.

When you do this, you will most likely find you should buy more policies and higher levels of coverage. That coverage will cost more money. You then need to have the intestinal fortitude to pass those costs along to your customers in the form of increased prices for your services. If you do not get the right kind and amount of coverage's because your customers will not accept increased prices, then you are basically self-insuring. In today's business environment, living in a society with attorneys running amok filing frivolous lawsuits, that is just an accident waiting to happen. Properly insuring your company is a legitimate expense that should be passed on to your customers.

I hope that the costs of your insurance policies become nothing but a cash cow for your insurance company. I hope that everything always goes right and you never need it. But in the event you do have an event with your business, please do not let all that you have accomplished, built and worked for, be destroyed because you did not take the time to spend one hour with your insurance agent. For help with this issue, try calling your regional or national trade association. Many have developed working relationships with insurance agents or companies that do have a greater understanding of our industry and all the exposures you are faced with.