One of the biggest problems I encounter when talking to new clients that have an existing insurance policy is exclusions. Most of them are under the impression that as long as they have the proper limits of liability (I.E., 1MIL/2MIL) that they will be fine. This absolutely wrong and could lead to claims being denied due to exclusions never made aware to the client. This is why I always ask for a copy of the policy before I begin the quoting process; I need to get a glimpse of the actual limits, and what is covered or not covered.
Here is a good example and a scenario I often run into. A client will say they are paying a decent premium, somewhere in the ballpark range of $4,000 – $6,000 and they do bars/nightclubs/taverns. This immediately raises a red flag as these types of contracts typically have a higher premium due to their riskier nature. I look at the policy with standard limits of $1MIL per occurrence and $2MIL total aggregate, but as I look at the exclusions page, it states bars/nightclubs/taverns are excluded. If there were any type of claim to occur while working this contract, the claim would be denied and the client would be paying out of pocket.
So many agents direct their clients to focus on the premium they pay and the limits of insurance. This is also why so many clients are mislead to believe they are covered for all the contracts they work. Next time it comes time for renewal, take a closer look at your policy and have a talk with your broker about the exclusions your policy has.
