Hi Franchise Fam!
First off, I hope everyone is safe and healthy. I know this is an incredible challenging time.
I wanted to share a few thoughts from the insurance side of these crazy COVID-19 times:
- Any business that has cut payroll should reach out to their insurance company and ask to update their payroll for workers comp purposes. Your workers comp cost is directly related to your payroll, so the less payroll the lower your bill should be. If you have packaged your workers comp and payroll, this is already being calculated.
- If your brand is offering delivery service directly, not through Door Dash, Uber Eats etc. you should make sure to have a true standalone Hired and Non Owned Auto policy that covers your employees driving their vehicles making deliveries on your behalf. Their auto insurance alone is most likely not enough coverage.
- If your concept is going to be closed for the next few months (Gyms, Kids Play Centers, Birthday Centers) it may be a good time to get a vacant policy. Liability insurance in the childcare play industry is extremely expensive. My partners have saved some franchisees $1,000 a month by updating these policies.
- Follow up with your current insurance broker. Some states, like California, are requiring insurance companies to offer refunds on Business Owners’ Policies. Insurance policies can be rated off revenue so if your revenue is down many carriers will be forced to offer rate decreases. While you are following up with your agent ask them what discounts may be available or if there are any options to save money.
- Does your franchise system have a preferred insurance company? Is your agent familiar with the discounts some carriers offer to franchisees? If not, it may be the right time to reach out to one of the insurance brokers who specializes in our industry.
- If you have a concept in the janitorial or restoration space, double check with your agent that there is not a liability exclusion for sanitation jobs of virus contaminated areas. If there is an exclusion you will want to make sure you do not take on jobs to disinfect a space that has been exposed to COVID-19. Each carrier has different wording on this coverage.
- Franchisors now may be the right time to set up an agreement with a broker to get your franchisees savings. Some of these programs will cut costs by up to 50%. Franchise systems offer exactly that, systems, that often lead to less insurance claims. Now is as important of a time as any to take advantage of the discounts that your franchisees may be entitled to.
Again, I hope everyone stays safe and healthy. Please feel free to reach out with any questions or concerns. I am looking forward to seeing everyone soon!
Tim Feddersen is an insurance agent with Gaspar Insurance.