'It is imperative you confirm the sub has their own insurance'

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Will Jeffords is an independent insurance broker and agent/owner of Covington Insurance, L.L.C., with offices in Prosperity, S.C. and Calabash, N.C. He helps businesses find the right policies to reduce risk, cover the cost of damage and protect their enterprise and employees. Here, he shares his advice on shopping for business insurance.

What’s the most important thing construction business owners should know when shopping for business insurance?

Insurance is basically risk assessment. It’s always best for the client to provide as much info as possible regarding everything they do, who they do it for, total sales and payroll. Most insurance companies will do an audit of some kind and the discovery of new or undisclosed information after the fact will only raise the cost of insurance. Also, I find that sometimes a client is hesitant to provide information from their current policy. As an independent agent, I represent many companies. If I know upfront who you currently have insurance with, for what and how much you’re paying, it helps with my assessment of who to check with for alternative quotes. 

What’s one thing you wish more construction company leaders knew about business insurance?

If a construction company uses subcontractors, it is imperative you confirm the sub has their own insurance, and — one step better — ask that you be listed on the sub's insurance. In this line of business, it’s not uncommon for the client to consider subs covered under their policy. If this is done, the upfront disclosure of total sales and payroll must include subs. As mentioned previously, the insurance carrier will conduct audits after a policy is issued and this can change insurance pricing.

Anything else we should know?

One more thing: If you’re new in business, you may not qualify for a standard policy. Instead, you’ll need what’s called a brokered policy. That’s when I source separate coverages from a handful of different carriers to meet your specific needs. While a brokered policy may be more expensive, it may be the only option available until you have a few years in business.  

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The Level is written by Margot Lester and edited by Katie Parsons.