1. How do I purchase affordable liability insurance?

Q: I just got my liability insurance notice, with a big increase. Where can I find more affordable liability insurance?

A: Make a habit of shopping your liability insurance coverage every year. It's important to give yourself enough time to shop around so that you're not under the gun when you get your premium notice. Make a note on your calendar for 60 days before your insurance policy will be due.

Looking for agents in the yellow pages can be hit and miss; you'll end up taking a lot of time and still not get the best company with which to work. Better sources are people you deal with every day. For example, if you're a home builder, ask about agents at the monthly meeting of your home builders' association. You might even consider pooling your strength and working as a group. You can also call the chamber of commerce and ask for referrals of members who sell business insurance.

It's common for state or national industry-specific trade associations to have relationships with insurance carriers. Once you have three or four carriers to give you quotes, outline exactly what coverage you need. Use your existing policy to make a short outline of your basic coverage and request that the quote be specifically for that outline so you can get an "apples to apples" comparison. Don't hesitate to give an agent a copy of your policy, but don't reveal the premium you're paying or other quotes you've received until everyone has given you their first quote. Too much information too early will force you to give up your negotiating position. Also, let each of the agents know that you're putting your insurance needs out to bid -- a little competition works wonders in getting that pencil a little sharper.

Once you have three or four quotes, let each agent know where he or she stands compared to others. Don't be afraid to ask each agent to come up with ways to get your premiums down. Are there discounts if you have certain safety programs in place? Can you carry a higher deductible? Is one part of your business causing your premiums to be high? They are the experts in this area and there's nothing wrong with making them work a little.

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