PART TWO: AM I COVERED?..
In Part 1 of this series (you can view it here) we established the need for insurance. . .of all kinds. Frankly, one of the first issues that musicians have to address is understanding the need for the product, that is, for insurance coverage. Yes, it is true that many of us may go an entire lifetime and never need to rely on an insurance policy but the opposite is also true; one uncovered claim (i.e., not covered by insurance) can quickly hurt a career. So, step one is done. There is a need for insurance. But now what?
Here, in Part 2 we now examine how do you go about procuring and selecting insurance and what are some basic rules to consider and understand in that process? Here are some suggestions.
- Get professional help and advice. By way of example, think about automobile insurance. Many people purchase coverage online or they simply check boxes on an application which is strictly driven by economics (i.e., cost). Sadly, it is after an accident has occurred that these same consumers realize later this if they had paid an additional nominal amount they could have had much better coverage however, they didn’t buy it because they weren’t aware of the greater coverage or they were not aware of the additional nominal cost versus the benefit of greater coverage. Be educated on all your options and what it costs to get the best coverage; don’t assume that greater coverage always means significantly higher premiums. Sometimes you might be surprised at how little it costs to increase your coverage. Particularly as it relates to music and intellectual property, these are specialized fields and you want specialized help to understand the issues and the products and what it costs to protect them. Get some expert help to guide you.
- Be diligent on your own. Even though you should obtain professional help in creating an insurance portfolio, in many states there is still an obligation on your part to read your policy. The point is to be as diligent and complete as you can be with your broker or agent however, despite that, you should not blindly rely on them to take care of everything for you. Be involved in the process.
- Be truthful and complete in making your application. The harsh reality is that information you give to an insurance company when you apply for insurance can also be used against you later on when you make a claim. For example, if you obtain coverage but did not disclose a pending dispute (which would be covered) when you acquired your policy your insurance company might deny coverage later on if you make a claim on the pre-existing dispute. In fact, in some instances your carrier might even be able to void the policy altogether if you made a misrepresentation or omitted to disclose something. The point is to be truthful when applying for insurance so that you do not find out down the road that because you did not disclose something you are not being covered. Also understand that often it is not that people intentionally leave something out of their application but they might have honestly made a mistake. Either way, no disclosure might mean no coverage and you need to be aware of that.
- Understand that not all actions are covered. It is enough that you are aware that not all your actions might be covered. What you do with that knowledge is up to you. A good example is intentional conduct. Most policies exclude coverage if you commit a crime, commit fraud, or act intentionally (e.g., assault). It is important that you understand what the boundaries are. Another common example is using a personal policy to cover a business venture. A good example of this comes from a case from Florida where band members were involved in an automobile accident. The members were riding in a van under which all the members contributed to the insurance costs. In that case coverage was sought following an accident and the insurance company denied coverage citing a provision in the policy (which was a personal one) which excluded coverage for business ventures. The point is when you apply for insurance give consideration to what type of policy you are seeking to obtain coverage under. Many personal policies contain exclusions for business pursuits therefore, your private auto policy or homeowners’ policy might not cover you. In that case your business may need to obtain the insurance separate from any private policies that you might have.
No doubt that obtaining insurance it important. We knew that. But there is also a mindset that you might want to have when you go through the process of actually acquiring your insurance coverage. Simply checking a box might be disastrous later on. Get educated and also pay attention to what is going on. In our next installment we will talk about different types of insurance and issues to watch for with those coverages. Stay tuned.
KEN “K BO” BIEDZYNSKI