You know the ones I’m talking about. These are the contractors that need a policy yesterday with the lowest down payment possible. In most cases, their other insurance has canceled for non-pay, and the general contractor, the carpet store, or Home Depot won’t pay them without a certificate for General Liability and Worker’s Compensation. Take just a minute and read some good advice from an old insurance agent who’s seen and heard it all.
Set the Ground Rules
There are some ground rules you should establish before you agree to write this business:
- If they have been in business more than a year and their last policy canceled for non-payment, don’t write them with your best company.
- If the premium is less than $600 for the GL, tell them it’s the cheapest out there but there is no pay plan. You have to pay in full.
- If you are going to write the Worker’s Comp and the company allows monthly payments, demand that the payments are auto-deducted from their checking account.
- If their policy cancels within the first year, make them pay in full for you to re-write them or pass on their business.
- Always quote the Worker’s Comp first so you can find out if they owe money to a previous carrier. If they do, make them pay the outstanding balance before you go any further.
Upsell for more Commissions
Let’s face it, the commissions on a GL and Workers Comp policy for a one-person operation is barely worth the effort. But, and this is an important but; explain to your prospect that there’s very little money in the sale and get them to buy a low-cost accident plan from you. You’ll probably earn more money on the accident plan than both the GL and Workers Comp combined. Better yet, sell them a small life policy. You know that most contractors put the purchase of a case of beer over protecting their family, so call them out on it and get them to buy some life insurance from you. But, and this is another big but; set the payments up on auto-pay which is what the carrier probably requires anyway.
An Underserved Market
Why even sell to contractors? Because in most areas of the country, it is an underserved market, and the sales are just waiting for somebody that will pay attention. Contractors can be a pain, but they own vehicles, they own homes, and they own boats and RV’s. Put your upsell hat on and turn that pain into a profitable account and they will spread your name around to all the other contractors they know. You’ll be glad you reached for that low-hanging fruit!