Insurance Corner: Having the Right

haviNg ThE RighT iNSuRaNCE BROkER MaTTERS

As a Micro or SmallCap public company, or a private company that aspires to become publicly traded, the task of securing Directors and Officers Liability Insurance (D&O) coverage can quickly mutate into a journey, perhaps an odyssey, that is all too often addressed last minute.

This leads to company executives feeling like they didn’t get a fair shake at the market, were accept the terms of an insurance contract that they don’t fully understand, and they feel like they paid way too much for it.

HOW IT USUALLy HAPPENS…

Most companies know that in order to attract high caliber board members and corporate officers proper insurance coverage is, or will be, required. Budgets are established for legal advice, accounting, transfer agents, Edgar filing, investor relations, public relations, travel, etc. Usually, insurance is a line item in that same budget, but often the estimated cost is calculated using some technique akin to a “finger in the wind.” Eventually, the time comes to start the process of getting quotes, and this is where the fun (and frustration) begins.

Where do you begin? Almost everyone knows an insurance broker or agent of some kind, so naturally that’s a common starting point. The problem is, almost no one knows an insurance broker or agent that actually understands the nuanced public company insurance market. This type of coverage is secured in a specialty marketplace and requires experienced and qualified brokers and insurers, without exception. Unlike your home or auto insurance, and in some cases even your basic Businessowners package (e.g., general liability), you can’t create an efficient, effective, and competitive bidding process via online quoting platforms, or by simply just asking several different insurance professionals to provide quotes.

Next, you’ve got quotes, and all of them stink. Now what? Chances are, whomever you’re working with is going to tell you they’ve submitted to every insurance carrier there is, and “I’m sorry, but this is just how much it costs…”. Not surprisingly, getting your company in front of the right insurance carriers is far more important than getting in front of “all” of them. In most cases, this is where the breakdown occurs, and naturally you’re relying on someone else’s advice. This is why having the right insurance broker is so important. For MicroCap and SmallCap companies this can be a real challenge. This segment of the specialty insurance market is dominated by massive brokers whose priorities are elsewhere, i.e., focusing on their larger clients where the premiums are higher (and the commissions). The alternative to one of these large providers is often a much less experienced “generalist” insurance broker that might give you all the attention you deserve, but they’re walking into the market blindfolded.

It’s not your fault, you’re not alone, and it doesn’t have to be so painful (and expensive).

HAvINg THE RIgHT INSURANCE BROKER mATTERS.

Simply put, the directors and officers of public companies often lack an effective voice in the specialty insurance market. Assurtrak Insurance Brokers was built to fill this void. We have decades of specialty commercial insurance brokerage experience, and we focus on companies like yours. Our passion is creating educated insurance buyers and making the buying process make more sense, overall. Having an advocate that knows the current state of the insurance market, where the pressure points are for an insurance underwriter, and the relationships to get your company to the top of that underwriter’s queue will ensure the best results.

We don’t stop at a good price. The best price is a great place to start, but too many insurance buyers stop there. Not all insurance policies are created equal, and it’s all in the details. We will take the time to help you understand what your options are and what the contract your purchasing is intending to cover, and what it is not. Having a broker that can communicate the differences from one option to the next will make the decision seem simple.

Take the first step toward better risk management, we’ve got your back. Whether you have a current policy in force, need to buy new coverage, or you are just trying to plan for the future, we want to share what we know with you, and it would be our pleasure.

Contact Assurtrak Insurance Brokers

(704)771-1294 info@assurtrak.com www.assurtrak.com

About the Author:

John D. Farris Partner | Assurtrak Insurance Brokers (704)771-1295 jfarris@assurtrak.com

Assurtrak Insurance Brokers is one of the only insurance providers focused on specialty commercial insurance solutions specifically for microcap public companies. John D. Farris is the founder and a partner at Assurtrak. John focuses his efforts on advising companies through the insurance procurement process for currently publicly traded companies across multiple exchanges, as well as through uplistings, IPOs, SPAC transactions, and dissolutions.