Insurance Licensing

As you go out into the marketplace, it would be prudent to address the licensing component of your commercial insurance program. Sometimes the small nuances can make or break your general liability insurance program.

As a small business owner as you venture out into other market territories and eventually across state lines, insurance licensing becomes a key component in this process. If your company is in the process of opening new operations in other states even if they are just a satellite marketing office from somebody’s home, you need to consider the insurance licensing component in this transaction. Even if you are not going to have brick-and-mortar locations in other states but choose to sell your products in multiple states you might consider licensing ramifications to the insurance products you are purchasing.

As an example if you are opening offices in multiple states and the insurance company that you have your business with only operates in one state or in only a few states, you might run into problems with your coverages being valid in other states. This is most apt to happen if you have a standalone workers compensation insurance policy. Many times regional workers compensation carrier’s only operate in one state or a few neighboring states but not countrywide. That can present real problems for you if you have employees in multiple states but you have an insurance policy that is limited to your home state or possibly a few neighboring states. You could have gaping holes in your coverages.

Lastly, your general liability insurance coverage could be in jeopardy if you have done business with an insurance broker that is not licensed in multiple states where you need the coverage. This could be an easy way for an insurance carrier to void your contract in this situation. An insurance broker who is placing coverage in states that he or she is not licensed it is in violation of that states licensing laws. The risk management tip of the day is to ask your insurance broker what states he or she is licensed in and what states your insurance carrier is licensed in.

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