The Edge - Quarter 4, 2008 - (Page 36)
Business INSURANCE | by Kevin McDonough To Get Best Coverage at Lowest Cost – Shop Now The insurance climate is improving for pool and spa businesses. Insurance, like many industries, is cyclical in nature. In the post-9/11 period, the insurance market “hardened” and insurance companies became extremely cautious in their underwriting approach and looked to adjust pricing upward. A softer insurance market has finally reached the contractor segment of the market, which is good news for pool and spa businesses, especially during challenging economic times such as these. The nature of a soft insurance market means that more of the big carriers are now vying for business, and for the first time in quite a long time they are looking to insure pool and spa companies. For example, The Hartford, the NESPA-endorsed program, has recently improved its coverages. Among other issues, it no longer excludes claims involving diving boards and/or slides. It also will consider writing Workers Comp in this program, something that was generally not considered in the past. Another firm, Navigators, the APSP-endorsed program, is a formidable competitor in the business today, offering important pool and spa business coverages combined with competitive pricing. In addition, CNA (remember them?) is making a return to the market. Initially, it is pursuing larger pool and spa companies, but it will probably pursue the smaller companies before the year is out. A competitive environment has been created between companies as they compete for market share. The end result is usually a win-win situation—better coverages and lower premiums. dropped a little, but don’t celebrate yet. Now is the time to go into the market for even better coverage at lower rates. Here is an example. We received a call from a prominent pool and spa company that has a retail outlet, a pool building operation and a service business in the northeast. Earlier in the decade, the company had reasonably good insurance through a major company that was insuring pool and spa businesses. That insurance company—CNA Insurance— precipitously pulled out of the business causing many in the industry to scramble for new insurance coverage. The pool builder in our example swallowed hard and accepted costly coverage through an excess liability company from his local hometown agent. Not pushed by the pool builder, the hometown agent left the policy undisturbed for five years to increase in price every year. Finally, the pool builder had had enough and called us to determine if he was paying too much. We analyzed his business and shopped the market and even got him coverages he had not had for five years. Were we able to save him money? How about $30,000 annually! The pool builder was delighted. He confronted his long-time agent who simply said he was sorry. He didn’t know. It’s true, you don’t know what you don’t know. Besides revisiting your insurance policies and shopping the market, our next suggestion is to get in touch with an agent who is a specialist in the pool and spa business. From your years in the pool and spa business, you know how remarkably complex the business is. You need an insurance specialist with the same appreciation for the complexity of the business. These specialists will ask you the right questions and get you the right coverage for the best price. Where do you find agents who specialize in the pool and spa industry? The most experienced ones have joined NESPA BEGINNING THE HUNT What does this mean to you, the pool and spa professional who wants the best coverage at the lowest rates? It means that you must now shop the insurance market. Typically, as you have received your premium notices over the past couple of years you have probably shaken your head in resignation as you were hit with rate hikes annually. This year, when you get your insurance premium notice, you will happily note that your premium has 36 www.nespapool.org
Table of Contents for the Digital Edition of The Edge - Quarter 4, 2008
The Edge - Quarter 4, 2008
The President’s Message
New Pool/Spa Federal Safety Act
Worried About the 2009 Market?
Treating Hot Water?
The 411 on UV Disinfection for Pools and Spas
The Advantages of Seeding Aggregate Surfaces
Pool and Spa Industry Wins Gold
Choosing a Retirement Plan
To Get Best Coverage at Lowest Cost - Shop Now
Index of Advertisers
The Edge - Quarter 4, 2008