Insurance 101
By: Anicka Quinn
For most people, spending time investigating their insurance coverage is about as appealing as watching paint dry, but as most owners know, it’s also an inevitable fact of running a business. The fact that it’s unappealing—and frankly, often expensive—also means that it’s tempting to just run with an “off-the-shelf” plan, some standard package from any insurance company that sort of works. Until you really need it.
The truth of the matter is that powersport dealerships are often far more complicated than those businesses the plans are made to cover. Dealers that offer their own maintenance or service work, for example, have to think about liability for their customers once the bike leaves their garage. Loss control can be a constant issue that sees insurance premiums skyrocket. Even preventing staff turnover can take its toll on a business owner that needs to spend time on the core needs of the business itself: service and sales.
Tailoring a package specifically to a dealership business is why Paul Demare of Pitcher and Doyle Insurance recommends that all dealers work with an insurance broker, rather than picking any insurance agent out of the Yellow Pages. “Most people don’t want to talk about insurance,” he says. “They’d rather put their hand in a meat grinder. They don’t understand it, so they put it off. This is where having a good broker can ease the pain.”
An insurance broker represents several insurance companies, thus working directly with the dealer to build a package that fits for them, rather than an already-existing plan that could eventually let them down. That also means looking beyond the best premium rate. “Dealer who just look at premium [costs] are looking at only one dimension,” says Demare. “For example, everybody shops around for a car that meets their needs, their family’s needs—price is not the only issue. Unfortunately when it comes to insurance, it’s a commodity. Price becomes the choice. Now price is an important part, but it’s not the only issue.”
Insurance brokers represent Demare’s company across Canada for its Preferred Dealer Protection program, built specifically for dealers. It includes the usual crime coverage: theft, forgery and false pretenses, but also liability coverage for anything the dealer does in the dealership, such as repair and service. The program includes coverage for business interruption—losses sustained should there be a fire or other incident that puts the dealer out of business.
“There are pretty simple coverages for dealerships, and all these little pieces are in there—but when they’re needed, they’re needed,” says Demare. “The program packages together small coverages which are unique.”
He explains that the company’s premiums are kept low because of a combination of the volume of sales they work in as a national firm, and the after-purchase support they provide their clients. Dealers in their Preferred Dealer Protection program receive an inspection and a follow-up report. “It’s a blueprint of his operations: where he’s doing well, and where he needs work,” says Demare. “A lot of times, the work that’s needed is very minor or low cost, that prevents a loss from occurring. In a powersports dealer, the usual losses are theft, fire, and some liability from people slipping and falling.”
Even human resources issues are taken into consideration, he explains. “In some bigger dealerships, you’ll have staff turnover problems. Our loss control advisors will make suggestions on ways to reduce such losses—a little bit of training in HR management.”
In essence, says Demare, a good insurance program is like hiring a few good consultants. “We know the dealers are about selling and serving, and they’re busy. They’re getting additional help from this program, and it’s free.”
The Motorcycle and Moped Industry Council also recognized the need for its members to have dealer-oriented insurance programs available to them, at an affordable level. “We realized, through a lot of discussion with our member companies, that there were things we could do to help dealerships,” explains Jo-Anne Farquhar, Director of Communications for both the MMIC and the Canadian Off-Highway Vehicle Distributors Council.
“In the industry, for any entrepreneur or small business owner to get insurance on their own, they often have to pay an exorbitant amount. Through working with dealerships through our member companies, we were able to work out a more comprehensive program to cover what they needed.”
The MMIC’s Power Secure Pac commercial insurance program, offered through Federated Insurance, is a tailored protection package. Like P&D’s program, they offer field risk analysts, loss prevention consultants, risk services coordinators and in-house legal counsel. “Because we’ve worked with the insurance companies, we’ve identified the various needs of the dealerships—things such as fire, consequential loss of damaged stock, personal liability—also emergency evacuations, server backups, computer theft, burglaries … you name it.”
Farquhar notes that the MMIC and the COHVDC also offer their members access to personal insurance that dealers can offer to their customers as an additional service—a nice perk to offer potential customers, particularly if it’s something their own competitors might not offer. The Open Road program assesses the rider’s driving and claims record and provides preferred rates accordingly, but it also comes with a nice bonus: riders pay their insurance rates from March to September, but are insured for the whole year.
Thinking competitively about insurance—as painful a subject as it may be for some—only makes sense from a business perspective, as Demare points out. “For a powersport dealer, it’s important to control their costs. Sales only provide so much income. It’s what goes out the back door that is the issue, and insurance is one of the largest costs. We can provide them with consistent premiums and with assistance on their other expense lines.” It may well be that the right insurance package is the most important line item on your yearly budget.
The truth of the matter is that powersport dealerships are often far more complicated than those businesses the plans are made to cover. Dealers that offer their own maintenance or service work, for example, have to think about liability for their customers once the bike leaves their garage. Loss control can be a constant issue that sees insurance premiums skyrocket. Even preventing staff turnover can take its toll on a business owner that needs to spend time on the core needs of the business itself: service and sales.
Tailoring a package specifically to a dealership business is why Paul Demare of Pitcher and Doyle Insurance recommends that all dealers work with an insurance broker, rather than picking any insurance agent out of the Yellow Pages. “Most people don’t want to talk about insurance,” he says. “They’d rather put their hand in a meat grinder. They don’t understand it, so they put it off. This is where having a good broker can ease the pain.”
An insurance broker represents several insurance companies, thus working directly with the dealer to build a package that fits for them, rather than an already-existing plan that could eventually let them down. That also means looking beyond the best premium rate. “Dealer who just look at premium [costs] are looking at only one dimension,” says Demare. “For example, everybody shops around for a car that meets their needs, their family’s needs—price is not the only issue. Unfortunately when it comes to insurance, it’s a commodity. Price becomes the choice. Now price is an important part, but it’s not the only issue.”
Insurance brokers represent Demare’s company across Canada for its Preferred Dealer Protection program, built specifically for dealers. It includes the usual crime coverage: theft, forgery and false pretenses, but also liability coverage for anything the dealer does in the dealership, such as repair and service. The program includes coverage for business interruption—losses sustained should there be a fire or other incident that puts the dealer out of business.
“There are pretty simple coverages for dealerships, and all these little pieces are in there—but when they’re needed, they’re needed,” says Demare. “The program packages together small coverages which are unique.”
He explains that the company’s premiums are kept low because of a combination of the volume of sales they work in as a national firm, and the after-purchase support they provide their clients. Dealers in their Preferred Dealer Protection program receive an inspection and a follow-up report. “It’s a blueprint of his operations: where he’s doing well, and where he needs work,” says Demare. “A lot of times, the work that’s needed is very minor or low cost, that prevents a loss from occurring. In a powersports dealer, the usual losses are theft, fire, and some liability from people slipping and falling.”
Even human resources issues are taken into consideration, he explains. “In some bigger dealerships, you’ll have staff turnover problems. Our loss control advisors will make suggestions on ways to reduce such losses—a little bit of training in HR management.”
In essence, says Demare, a good insurance program is like hiring a few good consultants. “We know the dealers are about selling and serving, and they’re busy. They’re getting additional help from this program, and it’s free.”
The Motorcycle and Moped Industry Council also recognized the need for its members to have dealer-oriented insurance programs available to them, at an affordable level. “We realized, through a lot of discussion with our member companies, that there were things we could do to help dealerships,” explains Jo-Anne Farquhar, Director of Communications for both the MMIC and the Canadian Off-Highway Vehicle Distributors Council.
“In the industry, for any entrepreneur or small business owner to get insurance on their own, they often have to pay an exorbitant amount. Through working with dealerships through our member companies, we were able to work out a more comprehensive program to cover what they needed.”
The MMIC’s Power Secure Pac commercial insurance program, offered through Federated Insurance, is a tailored protection package. Like P&D’s program, they offer field risk analysts, loss prevention consultants, risk services coordinators and in-house legal counsel. “Because we’ve worked with the insurance companies, we’ve identified the various needs of the dealerships—things such as fire, consequential loss of damaged stock, personal liability—also emergency evacuations, server backups, computer theft, burglaries … you name it.”
Farquhar notes that the MMIC and the COHVDC also offer their members access to personal insurance that dealers can offer to their customers as an additional service—a nice perk to offer potential customers, particularly if it’s something their own competitors might not offer. The Open Road program assesses the rider’s driving and claims record and provides preferred rates accordingly, but it also comes with a nice bonus: riders pay their insurance rates from March to September, but are insured for the whole year.
Thinking competitively about insurance—as painful a subject as it may be for some—only makes sense from a business perspective, as Demare points out. “For a powersport dealer, it’s important to control their costs. Sales only provide so much income. It’s what goes out the back door that is the issue, and insurance is one of the largest costs. We can provide them with consistent premiums and with assistance on their other expense lines.” It may well be that the right insurance package is the most important line item on your yearly budget.
