I decided a while ago that it was time to reconsider what I was doing with insurance for the company and began collecting information on the various options. One of my first paths was to post a request to the two book listserv groups that I follow the most closely, seeking recommendations (or warnings) from others. I also asked a number of specific dealers who I knew approached such matters with considerable care and forethought. I received a *lot* of responses. (N.B. A fair bit of what follows is sort of Insurance 101, but I received a number of requests from people asking if I would post about the responses I got from people and/or about the various insurance options.)
First and foremost, as much as I personally dislike insurance companies (far too much of a previous incarnation of my life was spent up to my eyes in CGL policies and/or negotiating with various insurers), the importance of business insurance really can’t be understated. Mind you, you do not *need* to have insurance (though some clients, particularly at the higher end of the spectrum, will require that you prove you are insured/bonded). You can “self insure,” with all the risk that entails (and very few people actually create/maintain the reserves such self insurance requires).
In addition to our E&O, CGL and Workman’s Comp, I wanted to put a Fine Art policy in place that would insure our stock *and* items that have been consigned with us (this can be a bit tricky, as title does not actually pass until sale and the owner’s homeowner’s policy is still in play). Every bit as importantly, I wanted coverage that would insure our books while at book fairs *and* while in transit to book fairs (both in our vehicle and/or while being shipped). Finally, I wanted coverage that would insure any package being shipped to a client.
Inclusion of this last coverage will save a fair bit of money and streamline our processes a bit. We insure every shipment we post and have been using Endicia recently. We have found that they become unreasonably expensive over a fairly low limit and cap at a relatively low level. Rolling our shipping insurance into our new policy will not pay for the added policy, but it certainly makes a reasonable dent in the premium.
From the responses I received, three insurers clearly dominate the market. They are, in no particular order:
-Michals Insurance Agency (Bernie Michals)
-DeWitt Stern Group
-Collectibles Insurance Group (CIA)
Of people who emailed me, two were using CIA and had no complaints. Three or four were using DeWitt Stern and generally had no complaints (though at least one said my email was going to make him go re-evaluate staying with them). Six or seven people said they were using Bernie Michals and, interestingly, they were overall the most positive and “happy” with their choice (while one or two did complain about growing premiums…which is, of course, par for the course in all insurance matters).
I think this highlights a major issue in/around insurance matters. In the end, if you have spent any amount of time negotiating, identifying terms and conditions, etc., nearly all coverages are fungible. The underwriters all write more or less the same paper and, in the end, one’s being happy with their insurance experience rests heavily with their relationship with their agent. In *this* area there are great differences. How much an agent knows or doesn’t know about a given area, how hard they are willing to work to tailor a policy to your needs, and/or how experienced an agent is in working with their underwriter(s) to get quick answers/solutions is what really separates the great from the good from the…er…not so good.
I talked with people at each company (or several people, as the case may be). After talking with them all and pretty much before premiums were quoted, I knew I was going to go with Bernie Michals. I never spoke with anyone “in charge” at CIA and while the woman I spoke with was pleasant, the interaction was cursory at best. DeWitt is a large and sophisticated firm. I spoke with a very nice woman based in NY City who has published in the area of Fine Art insurance and seemed knowledgeable and pleasant. I received a quick follow-up message from one of the others in her department, basically saying that any further questions should be directed to him. They are a very big agency and operate at a very high level. Nice, professional and competent…but, distant (N.B. part of my lukewarm reaction is undoubtedly based on spending too much time around law firms where the big name and generally brilliant partners gave some face time and worked major cases/clients, but the vast majority of “work” was executed by minions of widely varying skill sets).
Bernie Michals is one of those old-school, high-touch agencies. My first call put me in touch with Brad, Bernie’s son who now owns the firm and is clearly focused on filling his father’s shoes. We had a long good talk about what I needed (short and long term), what was happening with the firm, insurance generally and the Maine Black Bears (Brad went to UMO, it turns out). He explained that his dad was unavailable at the time, but he would get in touch with him and I should hear something shortly. Brad called me back to give me an update and Bernie called me first thing the next day. It was absolutely clear from the beginning that Bernie *knows* the book business and how and where insurance issues rest and how to address those issues.
I admit that the quote form didn’t hurt my impression. It is clearly from Lloyd’s and uses some terms that one simply doesn’t see on this side of the pond (I had not seen the term “entrustments” since first year law/commercial paper). It also did not hurt that some dealers I respect a great deal (including two of my three ABAA sponsors) *strongly* advocated Bernie.
In the end, however, it was Bernie himself (and, frankly, Brad emerging behind him) that closed the deal. I hope I will never need to file a claim, but I know if I do, Bernie will deal with it in a way that annoys me a little as possible. I am absolutely confident that if I need to tweak a coverage for a specific shipment or show, it will get done quickly and correctly. Insurance is, in the end, all about peace of mind. I am very pleased to have signed up with Bernie and look forward to working with him (and/or Brad) for years to come.
I thought a couple of clarifying statements might be useful:
Comprehensive General Liability (CGL) is pretty much what it claims to be…coverage from all sorts of interesting, surprising and/or annoying liability matters. Broadly, it covers bodily injury, personal injury, advertising injury and, perhaps most importantly, property damage. If you are at a friend’s shop and pour your toxic sugar/dairy quasi-coffee drink all over their wildly fragile galley proof of Hemingway’s Old Man and the Sea, you will be happy to have your CGL (as will your friend).
Errors and Omissions insurance (E&O, also called Professional Liability) generally covers liability for actions *not* covered by a CGL policy. This is especially important if you do any appraisal work…but it also covers such things as loss of client data, breach of contract, copyright infringement and the like.
Workers’ Comp covers medical and rehab costs and lost wages for employees injured at work (this includes “you” under most circumstances). It is *required* in all states and should be ignored at your own risk.
Ian J. Kahn operates Lux Mentis, Booksellers out of Portland, Maine and can be contacted at http://www.luxmentis.com.