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A Fine Line: When Commercial Auto Isn’t Enough

There's a fine line between inland marine and commercial auto. Here are three steps for making sure your client understands all their insurance needs in these areas.
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Inland marine: Just the name leads to confusion for many business owners, especially those who are not familiar with the insurance buying process.

Explaining a client’s need for commercial auto or even commercial property coverage is easy compared to doing the same for inland marine. But for many clients, a commercial auto policy is not enough—it does not cover all the expensive equipment they have in their car, nor does it cover the equipment they have loaded up on a trailer attached to their vehicle.

This is where the fine line between inland marine and commercial auto lies. Here are three steps for making sure your client understands all their insurance needs in these areas.

1) Start with the basics. The first conversation an agent has with a new client frequently revolves around general liability and workers compensation—coverages that are required by law in most states. It makes sense, then, that most first-time entrepreneurs start there when purchasing insurance.

Establishing trust with your prospect is crucial at this stage. The sooner the client trusts you, the more likely they are to listen to your advice when it’s time to discuss more difficult coverages.

This is also a good time to discuss commercial auto—another common coverage that’s usually easy to explain, if only because the business owner likely has a personal auto policy.

While personal and commercial auto policies are not exactly the same, their common ground makes the sale much easier—giving you another opportunity to establish credibility.

2) Move on to more complicated coverages. Explaining the need for a hired and non-owned auto policy, by contrast, may be a little trickier. The business owner may not understand the liability involved with their employees driving their own cars on company time.

This is a good time to broach the topic of inland marine, taking care to use terms like “floaters” and “equipment coverage.” A rookie business owner is much more likely to understand that they need coverage for the specialized equipment they use daily for their trade, but that connection isn’t immediately clear when they hear “inland marine.”

3) Close with a BOP. Closing the conversation by suggesting a business owners policy prevents difficult conversations—especially after a claim occurs that is not covered. A BOP can help bridge the grey area between commercial auto and inland marine.

Walt Capell is president and owner of the Insurance Shop LLC, the rapidly growing national insurance agency he founded in 2005.