# Is this misleading or true? What do you think about this Business Ins Quote?



## TshirtGuru (Jul 9, 2008)

I'm obtaining some business insurance, but a rep from Allstate came by the office and stated that there is a minimum of a $500 premium. Although cheap, I never knew there was a minimum in a premium (although I am aware of minimum amounts in coverage). 

Is this true? Or is he misleading me so I pay more then I have to? (The first impression I got was that he was kind of a slick sales person).


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## Masterkoin (Jul 23, 2008)

While I'm sure there are cheaper policies. The issue is who would want to represent you if there is only the one policy because the commission would be so low. I'd take a look for a package policy that you can buy direct from somewhere online if cost is your only motivation. The only problem is you tend to get what you pay for and if you find a cheap company direct policy then who will be the agent on your side if you have a problem? You might see if he or an independent insurance agent (my preference) can find you a package policy that may still cost $500, but includes some other things with it that fit your business. I had one for computer repair guys that included a bunch of transport insurance & office equipment coverage along with my liability. I personally believe that an independent agent can often do a better job for you even if its not cheaper because they have a menu of companies to chose from instead of just representing the one company like Allstate.


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## TshirtGuru (Jul 9, 2008)

Masterkoin said:


> While I'm sure there are cheaper policies. The issue is who would want to represent you if there is only the one policy because the commission would be so low. I'd take a look for a package policy that you can buy direct from somewhere online if cost is your only motivation. The only problem is you tend to get what you pay for and if you find a cheap company direct policy then who will be the agent on your side if you have a problem? You might see if he or an independent insurance agent (my preference) can find you a package policy that may still cost $500, but includes some other things with it that fit your business. I had one for computer repair guys that included a bunch of transport insurance & office equipment coverage along with my liability. I personally believe that an independent agent can often do a better job for you even if its not cheaper because they have a menu of companies to chose from instead of just representing the one company like Allstate.


The policy I am looking for is a package, it includes $1 million in liability, and $50,000 in property damage (equipment). He is a independent agent for Allstate. The only thing is, I don't have $50,000 in equipment, I have about $35,000. Is it good to cushion? He recommended leaving it at $50k when I told him my equipment costs is $35k but didn't explain why (his english is a little broken up). I also wanted to lower my liability coverage to $500k instead of $1M, but his quote for the $1M and $50k coverage was $510 annually. And lowering it to $500k and $35k was $500. 

A $10 difference? Of course I would just get more coverage, but I wonder if he's trying to pull a fast one on me because he knows I'm young.


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## Teeser (May 14, 2008)

That is exactly what I pay for both our business policies which I got from a local independent agent. Ours is with Selective. I would still go with an independent agent. I know my agent runs our policy and gets new quotes from companies for us every year. We've been in business 5 years and the premium has never gone up and the coverage has actually increased. Not in dollar amounts but they added Acts of Terrorism and mold coverage and stuff to the package.


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## Solmu (Aug 15, 2005)

TshirtGuru said:


> I also wanted to lower my liability coverage to $500k instead of $1M, but his quote for the $1M and $50k coverage was $510 annually. And lowering it to $500k and $35k was $500.


$1M public liability is completely standard, both here (Australia) and in the US. The only times I've heard of a different figure, was $2M, or occasionally huge policies ($10M and the like). But I hear $1M over and over again.

The thing is, I have no idea _why_ it's standard. But maybe $1M is a common figure handed out by juries or something.

Did you have a reason for wanting to lower it? My only concern is that if $1M is that standard, it might defeat the purpose of even having it (as absurd as that seems).

(although in this instance, it's not an issue anyway because of the price difference)

Anyone have any input on why $1M is the norm? How much does public liability really matter?


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## TshirtGuru (Jul 9, 2008)

Solmu said:


> $1M public liability is completely standard, both here (Australia) and in the US. The only times I've heard of a different figure, was $2M, or occasionally huge policies ($10M and the like). But I hear $1M over and over again.
> 
> The thing is, I have no idea _why_ it's standard. But maybe $1M is a common figure handed out by juries or something.
> 
> ...


Well, like you said in this instance it doesn't matter, because there is virtually no price difference. But, the reason I thought to lower it was to lower my premium a little. 

We're not a public retail spot so the chance of having something happen to the public during our business operation seems slim. The only time we interact with the public would be when they pick up and drop something off. And of course liabilty to ourselves could happen, so I guess it's good to have it up to $1M.


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## jmj (Feb 24, 2008)

Go with your gut, if you already feel he is misleading you find someone you feel you cn ttrust. I had all my insurance with allstate (personal and business) when I had my shop at home, had my agent come out to inspect my new 880sq ft shop, she said oh no problem we will just up your home owners policy to cover it, I was worried that this was not right and asked why not a commerical policy, she said Allstate would not do commerical because it's on my property. Well 2 years later we where out of town and had a faucet to bust, flooded the shop, water everywhere, long story short after fighting with them for weeks to fix the damage they said it should have been a commerical policy (what)! They finally paid but canceled. So go with your gut and find a company you feel comfortable with.


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## pete219 (Feb 8, 2008)

You should ask your current car/home insurance agent about what coverage he give you for your business. If you add this to your current insurance it should be alot cheaper than 500 bucks a month. If they can't help you, I'm sure he probably knows someone who can! good luck.


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## Teeser (May 14, 2008)

You are talking about the policy costing $510 for the YEAR right?


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## Masterkoin (Jul 23, 2008)

pete219 said:


> You should ask your current car/home insurance agent about what coverage he give you for your business. If you add this to your current insurance it should be alot cheaper than 500 bucks a month. If they can't help you, I'm sure he probably knows someone who can! good luck.


I agree with this statement for sure, but I guess I thought that is kinda what you were doing when you got the Allstate guy. While some independent agents do offer Allstate, I would expect a real independent to have some other company choices for you and/or even just an add on liability umbrella on top of your personal insurance. Either way, I would recommend you go here and put in your city and state and find another agent or two and get some quotes from them on the business only and then a combination of your personal and business.


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## splathead (Dec 4, 2005)

All insurance companies have minimum premiums. Otherwise you would have kids wanting to insure their $100 lemonade stand and expect to pay a $3 premium. 



> Anyone have any input on why $1M is the norm? How much does public liability really matter?


Liability insurance has always been written in round amounts. 20 years ago the norm was $100,000. Then as lawsuits increased it went to $250,000, then $500,000, then $1,000,000 and now it's not unusual to see $2,000,000.

Public liability matters because it includes Products liability. If we sell a shirt that maybe is mislabeled and causes a reaction in someone, we, along with the manufacturer, will probably get sued-even though we had nothing to do with it. It also covers you if you go to fairs, trade shows, sell to retailers, etc.

Get sued without liability insurance and you risk losing your house and other assets.

$500 for a business package policy is a great price and Allstate is an excellent company.


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## TshirtGuru (Jul 9, 2008)

Thanks guys.

Yeah the policy from Allstate is $510 annually not monthly.

I was just curious on the premimum minimum, the guy has broken english and seems a bit like a slick rick type of guy. I just used that independent insurance database and called a couple and didn't like their service or communication. One of reps I spoke to said he was going on vacation and didn't have time. WTF? ....

So I called my fathers friend who is an insurance broker (I forgot about him as I don't know him personally), so I am in the middle of getting quotes from him. He asked me the right questions and seems very detailed.


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## jberte (Mar 25, 2007)

he's not pulling a fast one - 25 yrs in the commercial insurance business later i can tell you with assurance that a $500 minimum premium is not only standard but cheaper than some these days! if you step back and take a look at what you're potentially getting for less than $50 a month...it ain't all bad! there are fixed administrative and overhead costs that must be paid no matter how large or small the annual premium - they simply have to draw the line somewhere. it's no different than shop minimums at your sign shop, local garage, or in fact many shirt screeners


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## TshirtGuru (Jul 9, 2008)

jberte said:


> he's not pulling a fast one - 25 yrs in the commercial insurance business later i can tell you with assurance that a $500 minimum premium is not only standard but cheaper than some these days! if you step back and take a look at what you're potentially getting for less than $50 a month...it ain't all bad! there are fixed administrative and overhead costs that must be paid no matter how large or small the annual premium - they simply have to draw the line somewhere. it's no different than shop minimums at your sign shop, local garage, or in fact many shirt screeners


Thanks guys! 

Yeah, so I signed the policy I got from my fathers friend. I got the same policy: $1M Liability, $50k property, for $500 plus extended coverage with income loss and some other extras (which the other guy couldn't offer). All in all, worked out well.


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