Don’t Be Exposed

Make sure you have enough of the correct insurance coverage

Jeannette Blanton-Monnat is passionate about commercial insurance — and she’s deeply concerned that many business owners are dangerously underinsured. “Rarely do we review a policy for any business in the pool and spa industry that has the coverage needed,” says Blanton-Monnat, partner and vice president of Independent Insurance Group Inc., the only insurance agency endorsed by the Association of Pool & Spa Professionals for more than a decade. “Without the proper coverage, particularly on the liability side, your business could be financially devastated in the event of a loss.”

Retail and Service
Businesses that service spas have much different insurance needs than those that sell them.

“Retail tends to be low risk as everything is confined to four walls,” Blanton-Monnat says. “Service has many variables that raise the exposure. Driving, delivering, going to individuals’ homes and repairing or installing the equipment carries much more of a risk. In the insurance world, service and retail are two different animals.”

For retailers, the prime concern is losing income after a catastrophe like a fire or flood.

“Business income and extra expense coverage will give you back the lost income and cover any extra expenses you may incur while getting your building and business property back to the way it was before the loss,” Blanton-Monnat says.

The stakes are raised for those who both sell and service, like Doug Carlson, partner and president of Dallas-based Dolphin Pool Supply & Service, Inc.

“We have to make sure we’re covered quite extensively as far as our automobile policy, liability and collision,” Carlson says. “Then, as far as my business itself, someone may come in and slip or fall.”

Liability Insurance
Doug Carlson has never been sued, but he is acutely aware of the risk of a lawsuit.

“We’ll bring the hot tub out and put it down on the slab,” Carlson says. “We’ll make the final wiring connection, fill it, show the consumer how to operate the controller, teach them water chemistry and wish them good luck. That’s a huge degree of liability.”

In our society, even the most scrupulous businesses can face devastating lawsuits.

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“Individuals do not sue for $100,000 anymore,” Blanton-Monnat says. “If someone is going to go through the trouble to sue, they will sue for $1 million or more.”

Carlson relies on umbrella coverage, a type of liability insurance that supplements his underlying policy. Over the years, he has raised his umbrella from $500,000 to $1 million to $2 million and finally to $3 million.

It buys him peace of mind against the unexpected.

“If a driver unfortunately hit a child, not only would the auto cover that, but if it went to court, the umbrella would also kick in,” Carlson says. “If somebody shocked themselves in their hot tub and tried to prove it was because of our negligence, our umbrella would kick in.”

Cost Versus Coverage
Like individuals with personal car insurance, some business owners raise their deductibles in order to lower their monthly premiums — but there are ways to reduce cost without sacrificing coverage.

Blanton-Monnat suggests:

  • Asking your agent about residential water-business policies.
  • Making sure the policy does not contain high-risk exclusions.
  • Asking about peak-season endorsements, which boost coverage when needed and reduces it in the offseason.
  • Opting for auto liability symbol 1. This free, yet underutilized classification covers all automobiles connected to a business.
  • Making sure you are not double dipped on your premiums if you sell and install.

Residential water-business insurance is complicated and requires the services of a specialist who understands the many variables and nuances.

“Most agents simply do not understand the pool and spa industry,” Blanton-Monnat says. “I can give you example after example of what we have found missing when we review policies of prospective customers.”