Commercial Applicators Dilemma: Coverage vs. Price?
In the insurance business it is not uncommon for consumers, business owners and their agents to shop all the available insurance coverages and make their final purchase decision on price – without considering coverages. I’ve found this to be especially true for western commercial applicators.
Price, in today’s economic environment, is a very serious consideration, but having the necessary coverages when a claim manifests is paramount. You may save a couple of hundred, even a couple of thousand dollars annually, but at a reduced coverage? It is critical that your decisions be based on both issues – price and coverage. For the commercial applicator, it simply isn’t worth the risk to “go cheap”.
An example is Van Beurden’s commercial liability program for commercial applicators. There are several carriers out there right now that promise to provide the necessary coverages for the commercial applicator that meet the state insurance requirements. In addition to price you must also consider the following questions regarding coverage:
- Does the policy provide coverage for drift damages – material placed on point “A” and travels to point “C, D, or F”. Does this policy provide the coverage to reimburse the neighbor’s loss of crop – loss of income? Does this policy provide the coverage to reimburse or replace a neighbor’s fence, dog, bird or ornamental tree?
- Does the policy provide coverage for damages resulting from applying the wrong material, going to the wrong field, mixing incorrectly, not applying the material as directed or damages due to contaminated tanks or lines?
- Does the policy provide coverage for damages if there is an equipment failure?
- Does the policy provide coverage for bodily injury?
- Does the policy have a “sunset” clause in it – this is when certain coverages are limited by time. An example would be limiting the reporting of a claim due to an error in application to 180 days. Even though you may have an annual policy, there can be time limitations to coverages.
Then there are the “other” coverages that need to be addressed – depending on the insurance company, these coverages may not be available or can be included or purchased for an additional premium:
- Does it cover the cost to cleanup a spill while transporting material and the spill is a direct result of a vehicle overturn or collision?
- Does it cover the cost to cleanup a spill at a storage site?
- Does it cover professional liability if you are a licensed pest control advisor, crop consultant or arborist?
- Does the policy provide additional insured endorsements and is the company flexible about the forms they use? There are many types of additional insured endorsements and some commercial and government entities require specific forms and additional wording that is not standard with your carrier.
So when you shop your coverage, take the time to:
- Check the price
- Compare the coverages
- Get the quotes in writing — and if there are questions regarding the quotes, get the answers in writing.