Biz Tip Tuesday | Business Insurance

When was your business started and who all has played a part in it over the years?

My grandfather, Richard Aiken Sr., started our agency in 1950 in downtown Jackson. He didn't have enough money to have his own office space so he and 2 friends (an accountant and a stock broker) split the cost of an office and they had just one phone that they shared between the three of them. A few years into the business after accumulating enough cash on hand, he leased his own office and hired a secretary. My father, Richard Aiken Jr and my uncle Hank Aiken graduated college around 1978, and at that time my grandfather had our building built off Lakeland Drive where we are now. I joined the business in 2008 after college. The three producers in our agency are my dad, my uncle, and myself. A neat fact about us, we are the oldest continuously family owned and operated insurance agency in the state of Mississippi.

Has it always been your plan to join the family business and work for your dad like your dad did?

I am the type that cannot sit still. I am always on the go, and growing up I thought that being in insurance sales would mean me, stuck to a desk pushing papers all day. I considered landscape and other outdoor careers, since being outside is something I am always pursuing and enjoying. As I learned more about the insurance business, I realized that it presented a great opportunity to help people, and that the sales aspect of the business would have me on the go. I would be meeting people, asking questions and definitely doing more than just sitting behind a desk pushing paper. Working with family has it challenges, but we make it work well. My dad and I are very close. We share a wall at work and a fence at home, as he is my next-door neighbor. :)

What types of insurance do you sell?

The list is long. Are you ready? We have 2 different categories of insurance and numerous types under each. Our agency is a property and casualty insurance agency (no life and health), and we write both personal and commercial. Personal Insurance includes home, auto, boat, motorcycle, RV, jewelry, umbrella, ATV, personal farms, etc. Commercial lines include BOPs (Business Owner Package Policies), commercial property, general liability, commercial farms, workers compensation, D&O (Directors and Officers), Commercial Umbrella, and commercial auto (anything from flower delivery vans to 18 wheelers running from Jackson, MS to California).

You have been a big help for Thimblepress®, setting us up with our business insurance coverage. How would the conversation go between you and another business owner, looking to get coverage in place?

Lots of questions. The more I learn about the risk (in this case a business) the more I can understand what their exposures are, and then I start working to find coverage to protect them from the different exposures they have. For business owners, the main exposures are property (whether they own or lease), their liability, and workers compensation.

You have told me that liability coverage is one of the most important parts of the insurance policy. What are some of the main things that liability coverage protects against?

Liability coverage protects against demands and legal action when it is alleged that our customer caused bodily injury or property damage to another. Professional liability insurance protects professionals when it is alleged that their advice, action, or lack thereof caused financial or personal damage or bodily injury to others. This is about asset protection, and I will always start with a quote of at least $1,000,000 for a business. Lesser coverage is available but liability, though it is the most important part of the policy, is also one of the least expensive elements of the policy. For example if - $1,000,000 limits = $1,000 premium, $500,000 = $850. It is not hard to imagine causing $1,000,000 in injury to someone.

Why would a small business, especially a home based business, need business insurance especially if they do not have a huge team?

Every business needs general liability insurance, especially if they are a subcontractor for a larger business. Most larger businesses require general liability limits equal to the one shown on their policy. Homeowners policies have a set limit to business property and it would not cover over that amount if there were a fire, windstorm, theft. Cyber liability is currently the hottest sector in commercial insurance. Anyone who collects personal information, account or credit card information is liable to their customers for keeping that information safe. A business policy with a cyber liability endorsement would cover a business owner against this exposure (up to the limits on the policy). The cost of the required notification for a cyber breach is currently over $300 per customer.

What is the smallest policy you recommend?

As small business owners, every penny counts. I have several Business Owners Package Polices which meet what insurance companies call a minimum premium. These minimum premium policies usually run $500. This will get you liability coverage and business personal property coverage. If the business personal property coverage gets in the upwards of $50,000, it could start to exceed the $500 minimum premium.

Being a business owner who has contracts to sell my product through numerous stores, I am constantly receiving “Certificate of Insurance” requests from the retailers who are selling my product. Explain this process- why they are requesting to see proof of coverage and what kind of process do you go through to get them what they need?

Those businesses and/or their insurance companies have risk managers who want to make sure you have coverage equal to theirs; so that their policy is not providing primary coverage. For instance, a store selling a Thimblepress® product would not want to have to answer for allegations that you libeled someone in your publication. They want your policy to provide the primary coverage.

As small business like Thimblepress® grows, what steps do we need to take to make sure that we are covered for our growth in operations, size of space, equipment, etc…

By asking your agent for an annual review of your company and policies, you can be assured of keeping your coverage adequate for your changing exposures. For instance, when you reach 5 full time employees other than the owners, you are required to carry workers’ compensation coverage. A business may also add equipment, buildings, and square footage throughout the year. The agent needs to be made aware of any changes so that we can provide the correct coverage. New technologies bring new exposures. One of the hottest products in insurance right now is cyber liability. You’ve heard about Target and other large businesses whose computers were hacked, and customer information was taken. Cyber liability helps the business to recover from this sort of thing.

At the end of the day, what scenarios have you had to deal with for people to have to use their liability coverage in a small business? We want some stories...

Every business with foot traffic faces the perils of slip and falls. We have turned in a handful of claims where customers of a business have been injured while on a business owner’s premises and they are seeking compensation for their injuries. One example is a business owner was tied up in the office and needed to run an errand, because they were preoccupied they sent one of their employees to run the errand for them. While running the errand, the employee was in a car accident that caused bodily injury to an individual, who then hired a personal injury attorney. When the attorney got involved, he started asking questions. Where were you going? Why were you going there? The employee’s attorney thought their client should not be held liable because they would not have been in the accident if the employee’s boss had not sent them on the errand. Luckily, as I do with 99.9% of small business owners, I had included Hired and Non-Owned Auto Coverage on the policy. This coverage protects business owners who send their customers on errands for the business. This Hired and Non-Owned Auto coverage protected my customer from having to pay out of pocket for the damages and bodily injury. Since the insurance company paid out, the customer was able to stay in business and carry on.

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