In today’s complex world, there are more liability insurance options than ever before. While it is nice to have the options, it can sometimes become difficult to decide which policy is the best for your specific needs. Here’s a question we often get here at BWI: “Why are your massage insurance policies so much cheaper than some of your competitors?” The answer to this lies in the difference between insurance-only purchasing groups and trade associations.
If you are a part of an industry like massage therapy, cosmetology and esthetics, you’ve probably been introduced to a trade association. Within each of these industries, trade associations will often times provide members with continuing education materials, discounts on supplies, magazines, and access to networks, in addition to liability insurance. While this may make it more convenient when you are first starting out, it also is quite expensive. When it comes to your insurance needs, you will end up paying two to three times more for an insurance policy than if you went with an insurance-only group. Trade associations can make it easier to find materials, and can provide many helpful tools to get your business started, but those tools are not free.
Insurance-Only Purchasing Groups
In contrast to insurance policies provided through trade associations, there are several insurance programs out there that will provide insurance coverage without the additional “perks.” The main benefit to this type of policy is that you get exactly what you need—insurance. For those on a budget, this is the most reasonable option. What many new professionals don’t realize is many of the services provided by the trade associations can actually be found for free online. Website builders, trade materials, and access to industry networks are all tools that can easily be found online for no additional fees or premiums.
An important detail when buying insurance in a group policy is whether or not the policy has shared limits. If a policy shares limits, it means the limits decrease every time someone in the group has a claim. When you consider that thousands of people can be a part of a group policy, those limits can be depleted extremely fast and leave little to nothing if you have a claim. Fortunately, there are policies that do not share limits. In these types of policies, the only person who affects your limits is you when a claim is made.
While some might prefer the extras that come with joining an association for insurance, many choose to buy directly from purchasing groups to get their policies. This allows them to get the coverage they need without breaking the bank.