Strong managers develop numerous innovative ways to give their companies’ market fortitude and edge, but worst-case scenarios don’t usually factor into a business plan. Unfortunately for the independent distributor or repair garage owner, disaster can arrive by several different roads. A brake repair gone wrong might cause an accident and bring about an attendant lawsuit with costly litigation. A mishap in the shop could seriously injure a technician. Fires, hurricanes, tornadoes and hail are all ways nature makes itself a costly business partner.
A mishap in the shop could seriously injure a technician. Fires, hurricanes, tornadoes and hail all are ways nature makes itself a costly business partner.
Fortunately, the same smart business development strategies a manager employs to make his company more profitable also can mitigate insurance expenses. Best practices and diligent attention to work environment not only make a garage or shop more appealing to customers, but also prove to insurance carriers that your business would be a low-risk client, which can net a distributor a better rate. Performing due diligence when selecting an insurance carrier and conducting business conscientiously unfortunately don’t always protect a distributor from disaster, but it can ensure that he or she is financially protected should an accident occur or bad weather come calling.
THE RIGHT AGENT FOR THE JOB
Selecting a knowledgeable insurance provider can make or break an independent business, and this is especially true for aftermarket operations and their unique set of exposures. If you’re suffering recurring chest pain, your family doctor might be able to help you in a pinch, but you probably ultimately would want to solicit a cardiologist’s advice. Similarly, while many insurance companies could underwrite coverage for your business, you’d be better off seeking a specialist – someone who understands the heavy-duty aftermarket, inside and out.
Insurance companies can be divided roughly into two groups: Independent (or non-captive) and captive. Independent agents can represent many different carriers and products, while captive agents usually are tied to one specific carrier and can only offer its products.
There are benefits and drawbacks to both kinds, but the most important thing a business owner can do is to make sure the agency he chooses has a solid reputation in the aftermarket.
“I think considering agency experience is very important when selecting insurance,” says Jeff Kweder, vice president of marketing, Shepard Insurance Group. “Make sure you understand how old the agency is and how long it’s worked in the garage and distribution business.
