Coverage gaps aren’t good for anyone. Clients are exposed to uncovered losses, while brokers miss out on revenue. Identifying and closing coverage gaps should be a priority, and client assessments are the ideal tool to facilitate the process.
Both Personal and Business Clients Need Periodic Assessments
Coverage gaps can occur in both personal and commercial settings, so thorough client assessments are vital for both personal and business clients. Although the specific questions that you ask and the products that are needed may differ, the goals are the same: protecting assets and preventing losses.
Needs Can Change, So Assessments Aren’t One and Done
Imagine this scenario. Debbie has been a client of yours for years, and you’ve helped her secure homeowners, auto and life insurance. You think all her insurance needs are met, but then you receive a panicked call from her. She tried to file a homeowners insurance claim for damage to her boat, and that’s when she found out that her boat was not adequately covered through her homeowners policy. She’s upset, and so are you – you didn’t even know she’d gotten a boat.
Or you have a client, Pedro, who operates a one-man catering company. Two years ago, you helped him secure a business owners package (BOP) that includes property and liability coverage. You thought his business was well-protected, but now you find out that one of his workers has been seriously injured. Unfortunately, he doesn’t have workers’ compensation insurance because you didn’t know that he had expanded and hired employees.
As these stories illustrate, your clients’ coverage needs continuously evolve. That’s why it’s important to schedule periodic assessments, annually at a minimum. Many agents do new client assessments, but very few conduct reassessments. By adopting this practice, you can differentiate your agency and improve both your client retention and your cross-sell metrics.
Identifying Personal Lines Coverage Gaps
When meeting with personal lines clients, explore the following questions to identify gaps:
- What types of insurance do they currently have? This could include home, auto, health, life, disability, critical illness, and cyber. For each policy type that they have, make sure coverage is sufficient. For each type that they don’t have, discuss whether they should have it.
- What assets do they have? Consider cash as well as things like houses, cars, and boats, plus other high-value items like jewelry or art. Then you can determine whether they have sufficient coverage. For example, they may need to secure additional policies for certain items, or they may need to schedule the items in their homeowners policy. They may also want umbrella liability insurance if they have a lot of assets to protect.
- What are their plans for the future? Ask about expected purchases, as well as life changes like marriage or children. This allows you to discuss what coverage may be needed.
- What are their concerns? For example, they may be worried about retirement security, online scams, climate change, or lawsuits. Knowing their concerns allows you to recommend appropriate insurance coverage.
Identifying Commercial Lines Coverage Gaps
When meeting with commercial lines clients, assessments will need to be appropriate for the size and industry of the business in question. However, the following questions can serve as a good starting point:
- What types of insurance do they currently have? This could include common products such as property, auto, general liability, cyber, EPLI, D&O, professional liability, and workers’ compensation, as well as industry-specific products. As with personal lines, the goal is to make sure the coverage they have is sufficient and to discuss whether additional coverage is needed.
- What assets do they need to protect? This could include property, expensive equipment, inventory, investments and intellectual property.
- How fast are they growing? A business that is experiencing fast growth may need higher limits and additional coverage types.
- What are the emerging risks in their industry? Consider regulatory and litigation trends to determine whether they warrant additional coverage.
- What are their plans for the future? If a business is adding employees, opening new locations, expanding into a new state, acquiring other businesses or going public, additional coverage may be needed.
- What are their concerns? For example, they may be worried about ransomware, nuclear verdicts, new regulations, or overall costs. Discuss the products and other risk management strategies that can help with these concerns.
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