Buy the Best Be the Best
Why Take a Chance With Your Business’ Well-Being?  
By Steve Spalding

   In our fast-paced society of cell phones, text messages, 60-hour work weeks and now even fast-casual food, you may say, “How can I get a better deal on my insurance? I don’t have time for researching. I don't have time to negotiate.” As with most things in life, though, insurance selection — particularly for the best –– does take some time and effort. However, there are some simple steps you can take that not only make the process faster, but in the end, you'll come out on top — less stress, more reward.

Consider these tips and tactics as you evaluate your bar or club’s policy.

Tips and Tactics

1. Plan to take some time this year to review your insurance; don’t leave it until the last minute! This is the No. 1 mistake by nightclub and bar owners. The focus constantly seems to be on the income side of the balance sheet, but cutting on the expense side will yield the same bottom-line dollar. When you have the added pressure of a pending expiration date, you can make poor business decisions in an act of desperation.
   
   
2. What limits do you need? Normally, your lease decides this for you. Review your lease to see what limits are required. Any coverage limits above and beyond the lease requirements are voluntary and should be carefully reviewed. You may even be able to get your landlord to reduce the required insurance limits, such as reducing or eliminating an umbrella limit. Your insurance agent should be willing to give you a free review of the clauses in your lease that pertain to insurance.
   
   
3. How much of a deductible can you afford? If you have a low deductible, some insurance companies charge extra because they feel that you aren’t motivated to care about claims. A higher deductible shows the insurance company that you are willing to participate in any potential claim, therefore, in theory you must care more. Ask your insurance agent about the pricing impact of higher deductibles.
   
   
4. Do you need full multi-million-dollar limits on General Liability, Liquor Liability and Assault & Battery? Smaller limits are available, and they cost less. Tort reform has produced results in several states. The damage awards can be limited by legislation.  Your insurance agent can give you ideas on how to accomplish this.
   
   
5. Shop, Shop, Shop! Don’t just automatically renew your policy every year. Ask your agent to show you the different quotes they have received so you can compare the offers. Check out the financial condition of the proposed insurance carrier by going to www.ambest.com. This will give you a current financial status from a leading independent rating agency, and it’s free.
   
   

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   "Shop, shop, shop. Don’t just automatically renew your policy every year. Ask your agent to show you the different quotes they have received so you can compare the offers."
   

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After the Selection
   After you have selected and bound insurance coverage, there still are some items you need to accomplish to make sure you have a good working relationship with your insurance carrier during the next 12 months. Consider the following:

1. Usually within the first 30 days there will be an insurance company inspector that should call and set a meeting with you to inspect the premises. Make sure to be available when the inspector arrives! Passing this important duty off to an inexperienced employee could really cost you in the long run.

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   "Plan to take some time this year to review your insurance; don’t leave it until the last minute! This is the No. 1 mistake by nightclub and bar owners."
   

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    Be courteous, polite, and answer any question asked; however, don’t feel obligated to give long-winded explanations or your life story. Once the inspection is complete, the inspector will make "recommendations" to the insurance carrier concerning your operation. Those "recommendations" are typically forwarded on to you by the insurance company, and will indicate if changes need to be made. Make any requested changes within the allowed time frame. If you don’t, you run the risk having your policy cancelled.
   
   
2. Always make sure to request current Loss Runs from your agent and/or insurance company. Loss Runs are written reports generated by your insurance carrier that detail any claims or list "no claims" if you have had no claims during the insured period of your policy. You will probably have to make the request in writing to your agent, and if you don’t receive the reports in about a wek, then you should make the request in writing to your insurance carrier. Having 3-5 years of loss runs available will make it much easier for you to get competitive quotes upon renewal.
   
3. Once you receive your policy, don’t just throw it into a file. Inspect it. The policy should clearly state the name of your insurance carrier, the dates of coverage, and the limits of coverage being offered. You should be able to contact your insurance carrier directly and have them verify that your insurance policy is in full force. Ask your agent to help you. If your agent can’t or won’t help you, then call your state Department of Insurance for assistance.
   
   
4. If there is an incident or claim, make sure to put in writing as much detail as possible.  The written report will serve you well if the claim process drags on a year or two as with some protracted liability cases. The written report should be sent to your agent to initiate a claim, but the insurance adjuster is the person that will determine what is covered.       
   

About the Author:

   Steve Spalding is president of CSI, an independent insurance group providing coverage for a variety of client needs nationwide. As an independent, CSI has access to dozens of insurance underwriters, private carrier programs and risk purchasing groups. It also can help package coverage specifically for each client while offering the most competitive prices available.
  During the last 15 years, the CSI team has placed insurance coverage for thousands of hospitality companies, including nightclubs, bars, DJ dance clubs, adult entertainment establishments, live music venues and concert facilities. CSI has worked closely with Nightclub & Bar magazine for more than a decade, and it has handled the official insurance placement for the 2005 Nightclub & Bar Show in Las Vegas. For more information, visit www.csicoverage.com.