What to Expect from Your Business Insurance Agent and Agency

Written by Eric Petersen, CIC

Many times we hear tree services refer to their business insurance as a “necessary evil”. And while there may be some truth to that, the tree care companies that actively engage with their insurance agent quickly realize that having the right insurance partner is actually a “necessity” for the future success of their company.

I’ve often advocated for tree care companies to think of their insurance agent as a member of their company’s board of directors. A person who is an integral member of their team to help steer their company in the proper direction, much like their accountant, business attorney or financial planner.

Understanding that your insurance agent is a key member of your business team, I want to also make sure to highlight the difference between the types of insurance agents as well as the distinction between the agent and the agency. There are two different types of insurance agents that tree services can purchase coverage through. Captive Agents will typically represent only one insurance company (think State Farm, Allstate, American Family). Independent Agents who represent more than one insurance company. There are benefits to both types of agents, however, the vast majority of tree care companies will use an Independent Agent as they will have many more options available to secure the best insurance program for their clients.

Side note: ArboRisk’s roots came from the Captive Agent side (back in 2000, my father made the decision to switch from being a Captive Agent with Allstate to being an Independent Agent), so we have had experience in both areas and are very proud to be able to provide the value as Independent Agents to the tree care industry.

It is also important to understand the role of the agent and the agency. Every insurance agent will either be an employee or contractor of an insurance agency. Therefore, the insurance agency is the entity who is responsible for obtaining the insurance company relationships and developing resources for the agents to utilize with their clients. Most insurance agencies rely on their insurance companies to provide specific risk management help for their clients instead of developing services internally. 

With all of that said, what should a tree service expect from their insurance partner? There are five areas of knowledge that your insurance agent and agency should excel at and make no mistake about it, number 3 is the most important!

1. Insurance – First and foremost, your insurance agent needs to have a great understanding of the insurance coverages important to the tree care industry. This knowledge enables them to be more than just a salesperson and allows them to serve your company as a true trusted advisor to guide you through decisions.

2. Claims – Your agent should have a good understanding of the claims process as well as the most common type of claims within the tree care industry. They are your advocate during the claim process to guide you through the challenging time to ensure you get a prompt and fair resolution from the insurance company.

3. Risk Management – This is the most important one! The amount of premium you pay for your insurance coverage is directly related to the number and severity of your past insurance claims. In order to help you control your insurance cost in the long run and help you build a profitable business today, your agent MUST bring a risk management focus to your insurance program to help you do everything you can to eliminate or reduce injuries and accidents. They should have resources and a proven process established for you to implement easily and effectively.

4. Tree Care Industry – The more your agent knows about the tree care industry, the better they will be able to serve your company. Your agent should understand the unique service operations and equipment that tree services across the country use in order to build an effective risk management focused insurance program. You shouldn’t have to teach your agent about the tree care industry every time you call to add a piece of equipment or need an insurance certificate. Bonus Points go to the agents that are actually involved in the tree care industry, volunteering with associations, presenting at conferences and sponsoring events.

5. General Business – Lastly, your insurance agent should have some degree of general business knowledge. They should understand the basics of running a business and how you, as the business owner, get pulled in a million directions daily. This understanding of business acumen will help your agent craft the best risk management based insurance solutions for your organization that will minimize downtime and disruption caused by injuries and accidents.

Unfortunately, not all insurance agents and agencies will be proficient in the five areas of knowledge above and you will have to make a switch to better your company. If you are looking to switch, here are a few simple points to help you transition from your current agent seamlessly.

– Communicate Clearly – Once you’ve made the decision to switch, communicate your intentions clearly and directly to your current agent or agency. Expect them to try to win you back with promises of better service or by offering additional resources or by tugging at your heart strings by using a personal story of why they need to keep you as a client or example of a past situation they’ve helped you with.

– Three Reasons – Be ready to explain your reasoning by using the points above to create at least three reasons why you need to make this change for the betterment of your business.

– Prepare for Objections – For every reason that you have to move your insurance program to a new agency, your current insurance agent will have an objection ready to respond with. Prepare in advance by thinking through what they will say and how you can handle their response. As mentioned above, prepare for them to get personal with you in their attempts to retain your business. This can be uncomfortable for some, but will highlight how some agents will try to put their own needs above your company’s needs.

–          Remember Why You Need to Change – This has already been stated above, but it is so important that it needs to be stated again. Never let your current agent distract you with their attempt to keep you as a client when they have been letting you and your business down in the important areas that you need your insurance partner to be proficient in.

Insurance coverages alone can be a tricky subject to deal with as a business owner, so now you know how the right insurance agent and agency can help eliminate this as a potential threat to your business.