Q&A: Amid diminished competition and rising rates among insurers, it is important to find out what policy matches your business needs and what coverages will protect your vehicles and clients.
By Lee Martinez
Question: Why are there so few choices for commercial insurance for limousine companies and how do we know we are getting what we need? What will protect our business and our clients?
Answer: One reason could be the limousine insurance business has not been a profitable type of business for insurance carriers and because limousines are lumped in with buses, black cars and taxis. Last year at a meeting of the top insurance carriers in the world, there were only a handful interested in just listening to a proposal for limousine insurance. Geographic considerations also may be a reason. But there are more carriers now than ever.
At the International LCT Show this year, there were more than 25 companies that purchased booths and offered their information. Rates are and have been at their historical bottom for almost five years. It has been a buyer’s market for quite a while. Insurance, as all businesses, is cyclical. I predicted incorrectly more than two years ago that rates would rise due to the economy. Now we have the economy and natural disasters. I have seen rate increases recently and most data supports a turn in the market pricing.
As to the “right or adequate coverage amounts,” most limousine operators need the statutory limits required by a regulatory body based on passenger capacity. So the auto liability limits are given to you as a minimum. What you do from there is your call based on the value of your business, the legal penetration in your market, and the requirements of your clients. In most cases, limousine operators go to airports and these require general liability with an additional insured endorsement. Normally a $1 million/$2 million formula is adequate. There is also property coverage for your office to consider, employee benefits liability if you offer benefits and employment practices with wage and hour defense costs included if you fear a labor situation may occur, and workers comp. There are really so many coverage considerations that what you need is to turn over the insurance to a professional and get back to what you should do, which is earning a living.
Just as you would not go to a foot doctor for a heart problem, consider strongly using a broker who specializes in transportation. There are a lot of choices and make sure you shop and find the one that best explains and suits your needs.
About Lee Martinez
Lee Martinez is the President of Transpo Insurance and has more than 20 years of experience in the chauffeured transportation industry as a broker, managing general agent, and an operator. He is one of only three LimoPro Council members for the Willis Programs, a board member of the Greater California Limousine Association, and he has offices in Denver; Long Beach, Calif.; and Las Vegas. His companies offer insurance products in 22 states and he insures more than 5,500 livery vehicles in those states. Martinez also developed an internet Safety Training Program which is available at www.stop-program.com and he is a managing partner of ProTrans West, a managing general agency, which offers livery insurance products to retail brokers in the 22 western states. He can be reached at (702) 364-4727 or email@example.com.