Why do I need insurance?
- • In the event of a claim, insurance can help cover large expenses such as legal fees to defend a lawsuit.
- • Insurance helps you transfer these risks and expenses to an insurance company to protect your business from debt or permanent closure.
- • Your broker can help you navigate a claim and advocate for you with your insurance company.
- • Many schools, organizations, cities, performance venues, landlords, etc. require that you show proof of insurance in order to create rental and business agreements with them.
- • Assessing the coverage of an insurance policy can help you understand the risk of your business activities and can aid in the development of your risk mitigation plans.
What types of insurance should I consider for my circus business?
- Commercial General Liability Insurance
- Bodily injuries, damage to your leased or rented studio, use of non-owned automobiles, fundraising & special events (can include alcohol liability), legal fees for defending a claim
- Participant Accident Insurance
- Injuries from classes or instruction, no fault insurance to pay medical costs, can help you avoid a lawsuit
- Property Insurance
- For your equipment, apparatus and studio betterments & improvements; can be used to insure others’ property which is under your care, custody, or control
- Workers Compensation & Employers Liability
- A type of insurance providing wage replacement and medical benefits to employees injured while performing duties of employment in exchange for relinquishment of the employee’s right to sue their employer for negligence.
- Management Liability / Directors & Officers
- Claims from the financial & other management at an organization, personal liability for directors and officers, financial protection for an organization, employment liabilities (i.e. harassment, discrimnation, termination), harassment or discrimination (volunteers, students, parents, others), legal fee coverage for defending a claim
- Inland Marine for mobile property or equipment
- A type of business insurance that helps cover products, materials, and equipment while they are transported on land, such as a circus tent. This coverage is meant to help protect business property that is movable or used for transportation or communication purposes.
- Non-Owned/Hired Automobile Liability
- Helps cover property damage or bodily injury that your business caused to someone else in an accident.
- “Hired”means your business has coverage when you or employees drive a rented, leased, or borrowed car for business purposes.
- “Non-owned” applies to employees using their own cars for business activities. It provides extra coverage over the employee’s personal auto coverage for bodily injury and property damage liability.
- Helps cover property damage or bodily injury that your business caused to someone else in an accident.
- Abuse Liability Insurance
- Allegations of abuse, sexual/physical/emotional, sometimes found under Commercial General Liability
- Represents additional liability insurance. If a policyholder is sued for damages that exceed the liability limits of their other coverage types, an umbrella policy helps pay what they owe.
**You may need additional types of coverage depending on the nature of your business.
How much coverage should I get for a circus business?
You should consider carrying insurance in the following areas for no less than the amounts noted below:
- General Liability
- • $1 million per occurrence or claim.
- • Most policies have an aggregate limit – this is the total amount of coverage available for all claims in the policy period. Typically aggregates will be $2 million to $3 million, but vary amongst insurance companies.
- • This is the most common amount of coverage in our industry. Connect with your landlord/venues/other entities that may have specific coverage requirements.
- Accident Coverage
- • $25,000 minimum per incident
- Damage to Premises
- • $300,000 minimum
Ultimately, you should identify the limits your business needs if there were to be a total loss or worse case scenario. If that exceeds the above recommended minimums, consult your broker and consider getting more coverage.
What’s the difference between a broker, a carrier, and an underwriter?
You are the “Policyholder”. The policyholder is a business, organization, or individual looking to mitigate the impact of potential risks. The policyholder pays a premium to the broker and the carrier for a policy.
When you think of your “insurance company”, you are actually thinking about three separate roles:
- The salesperson/sales company. The broker works on behalf of the customer and is not restricted to selling policies for a specific carrier. Brokers receive commissions for the sale and service of insurance policies.
- The person who identifies, examines, and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate. (“Underwriting Risk” is the section of the risk-based capital formula calculating requirements for reserves and premiums.)
- Also known as the “insurance provider” or the “insurer”, the carrier is the financial resource behind the coverage provided in an insurance policy – the company who actually pays up in the event of a claim on your policy.
When you are looking for insurance, you may work directly with a broker-agent, an agent from an MGA, or an agent from a carrier.
A broker is an independent agent who will work with you to assess your needs, then “shop around” for you and get quotes from different carriers or MGAs, providing you with the best options they find. A broker may already have relationships with specific carriers or MGAs, and so they will already know what kinds of policies they can offer you and how much they would cost. They may also do extra research and find new carriers that will cover your specific needs. Brokers can be individual agents, or may work as part of a brokerage company.
A carrier may use a Managing General Agent (MGA), which is another company or agent contractually authorized to manage all or part of the insurer’s underwriting activities for specific types of business. An MGA may manage the marketing, underwriting, policy issuance, premium collection, appointing and supervision of other agents, claims payments, and reinsurance negotiations on behalf of their contracted insurance carriers. If you work directly with an MGA, the agent you work with from the MGA will only provide you with information for coverage from the particular carriers they work for. Without a separate broker to shop around for you, you have to shop around to different MGAs and/or carriers on your own.
A few carriers have in-house underwriters and sales agents of their own, so everything happens in one place and they work with you directly (think Geico). In that case, the agent you work with from the carrier is a “captive agent” and will only provide you information about that particular carrier’s policies. Without a separate broker to shop around for you, you have to shop around to different carriers on your own.
What should I ask a potential broker when searching for a new policy?
- Is this an occurrence based or a claims-based policy?
- Are there activities which are not insured?
- What are the exclusions on this policy?
- Does my policy travel with me?
- Do you have an incident report template you’d like us to use?
What is a claims-made policy versus an occurrence-based policy?
- • The coverage under an occurrence continues to be available after the expiration date of the policy (occurrences) which occurred while the policy was in force, regardless of when the claim is reported.
- • No increase in premium unless there is a change in occupation or rating category
- • Covers only claims that occur and are reported while the policy is in-force
- • When changing carriers from one claims-made policy to another, you need to consider purchasing retroactive coverage with your new insurance company for incidents which may have occurred, but you are not aware of, or an extended reporting extension with your previous insurance company so you can report claims after the expiration date of your previous policy.
Generally the coverage is the same on the 2 policy formats, however, an occurrence policy provides more seamless and continuous coverage.
How do I know which activities are covered?
You have to ask the broker specifically what activities you conduct that are covered. If the broker/insurer gives you an application that asks you what activities you conduct, it is possible they cover those activities, or that they do not.
You can include an ‘activities summary’ in your application in which you simply describe/list all the activities you do. Including phrases such as ‘and similar activities’ after each section can help leave room for your activities to change a bit. Brokers/insurers can exclude activities at their discretion.
Special activities we recommend clarifying with your broker:
- Overall height limits
- Teaching/performing at offsite locations outside your standard facility
- Teaching or performance work using another entity’s equipment as opposed to your own
- Activities taking place in another state or country
- Teaching online through digital formats
- Teacher training programs or other professional certification programs (this type of programming may require Professional Liability coverage, which is often a policy add-on)
- Events at which you will serve alcohol
- Use of trampolines (can be dependent on the diameter of the trampoline)
- Hanging off of buildings, cliffs, trees, etc.
- Work with fire
- Work in water settings
- Work with animals
When should I apply to renew my insurance?
If you wish to market your account to different brokers, then start applying 90 days before your policy’s renewal date. This will give you plenty of time to submit your applications (to your current and potential other insurers) and request changes to your policy.
If you wish to remain with your current insurer, your broker should be contacting you 30-60 days before renewal to connect on any exposure changes and update your policy. If they do not, remind them.
How do I obtain additional insured certificates? Do they cost extra?
- Send a request to your broker to receive additional insured certificates.
- In most cases, they will want the following information: name of entity requesting the certificate, their physical address, their contact info, and when you need the certificate by.
- We recommend sending this info in your initial request to speed up the process.
- Most brokers do not charge extra for these certificates, but it’s best to ask that question before binding a new policy to be sure.
- You may find that insurance companies will charge an additional premium if the certificate holder requires a ‘Waiver of Subrogation’ or if they require your policy to be ‘Primary & Non-Contributing’.
Can I get coverage for teachers and performers that work for me as independent contractors?
- • Traditionally independent contractors should provide their own liability coverage, so it’s not common for employers to provide that coverage for them.
- • However, our business is a bit unique in that it’s very difficult for independent teachers to find coverage in the U.S. Because of this, there are some brokers that can get you coverage for your contractors (only when they are performing work duties for you).
- • This coverage may or may not be included in your GL policy. Ask your broker.
What are Loss Runs? How do I get them? Who needs copies of them?
- • Loss runs are documents that outline your claims history with a particular carrier.
- To obtain these, send a request to your broker requesting your loss runs for whatever time period you need.
- Most brokers will want your loss runs from all carriers you have worked with in the last 3 to 5 years to give you a quote.
- • It’s also a good idea for you to keep them on file for your own records and so they are easily accessible for you to send to brokers for quotes.
- • Your broker is required by law to issue you your loss runs.
What happens if I have an incident?
- First, make sure everyone involved in the incident has been attended to.
- Next, write up an incident report.
- Make sure it is thorough and truthful.
- Interview all involved parties.
- If appropriate, have the direct parties involved sign-off on the report.
- Depending on the type of incident, you may need to conduct an investigation to discover the cause of the incident (such as in the case of a rigging accident).
- Call your broker and discuss the incident with them. Send them the incident report.
- If appropriate, offer your Accident/Medical ID# to the injured party to use for their emergency services/doctor visit to assess/pay for medical services.
- Providing this support may ward off a formal claim against your company.
- Broker will send you their form to fill out for the incident. It’s best practice to keep easy to access copies of those reports in your space. Reports should be filled out as soon after the incident as possible.
What happens if I am served with a legal claim?
- You should contact your broker immediately so they can report the claim to your insurance company.
- A lawyer may be engaged by your insurance company to defend the claim and to handle the proceedings.
- Likely, you will be required to attend a deposition or appear in examinations for discovery and your lawyer will guide you throughout the process with the claimant’s / plaintiff’s attorney.
- A settlement will be negotiated, mediated, arbitrated or ruled upon in a court of law.