US and European studies seem to jointly conclude that the average adult attention span is somewhere between 10 and 20 minutes. Of course, this span varies among individuals and is shortened or lengthened by such factors as the listener's:
This means that when you meet with a current client or prospect, you have only 20 or possibly 30 minutes to address all the necessary insurance issues before they are no longer hearing or retaining what you say. In that short time span, you have many topics on your agenda; some topics are a re-hashing of mundane and common information, but some time has to be invested in new topics and coverage issues.
One coverage topic that requires the agent's and the insured's attention is business income protection. And because of everything else that must be covered in any given meeting, an agent has about two minutes to introduce business income protection and move the insured towards more interest and desire in the coverage.
The average person, speaking at a normal pace with necessary emphasis and inflection, speaks between 200 and 225 words per minute. This means that the business income concept and "buy-in" needs to be delivered in approximately 400 words to fall within the two-minute window.
Following is a script that can be customized to model each agent's style, but it delivers the message in about two minutes. Don't believe it, get a stop watch, speak normally and read the script out loud.
Ready; GO!
"Your business exists to make money; money to pay your employees, cover the business' bills (such as rent/mortgage, supplies, taxes, and so on) and hopefully enough money for your personal use and benefit. The money you take home pays for your necessities (a house, food, clothes, etc.) and especially those 'niceities' like a bigger house, great vacations, private school, etc.
Without an income stream, employees don't get paid, bills don't get paid and YOU don't get paid. And with no income or source of surplus capital, your employees will find other jobs, bills will go unpaid and your personal financial situation will suffer.
Business income protection assures that your business and you maintain a stream of income following a major loss.
Estimates are that 25 percent of all businesses suffering a 'catastrophic loss,' one that causes them to close for more than 30 days, never reopen. And about another 25 percent close within three to five years following the loss. We can't find credible information on the effect of these closures on the business owner's personal financial picture.
It is highly unlikely that these businesses closed due to the lack of or improperly written or valued insurance on the building or the contents. Generally, these businesses closed due simply to the lack of INCOME. You can generally get a loan to aid in getting the building rebuilt or the contents replaced; but lost income is just that – lost.
Yes, there is an additional premium to cover your business income. But rather than an expense, this coverage must be viewed as an investment in the continued viability of your company. Of all the property coverages available, this is the most important. Without a flow of income or massive cash reserves, your business may cease to exist following a major loss.
Business income coverage is actually exceptionally cheap protection considering the alternative. Does this sound like protection you could use?"
STOP! You should have about 10 or 15 seconds left in that two minute window. If you have piqued the insured's interest in or desire for business income protection, there should be some follow up questions like:
Granted, these are not all the questions that may be asked, only a sampling. But questions are great because that means you have permission to extend the conversation and the insured has reengaged the meeting.
Of course, the answers to the above questions (and any others ask) depend on many factors such as limits, rates, coverage options chosen and the insured's willingness to provide the necessary information.
A series of business income articles was posted on this site earlier this year and a new book on business income coverage was published in August ("Business Income Insurance Demystified: The Simplified Guide to Time Element Coverages"). Additionally, the newly created Insurance Journal Academy of Insurance is scheduled to present a five-part business income series beginning in January.
© 2010 by Wells Publishing, Inc. All Rights Reserved. Privacy Policy | Terms and Conditions | Advertise with Us | Submit Articles | Contact
1. Net profit (if any) before taxes +
2. All operating expenses that necessarily continue, other than payroll +
3. Payroll that you would want to continue - can be none, managers and above only, or everyone.
4. Extra expense, above and beyond normal expenses, necessary to resume operations as quickly as possible
For the period necessary to restore the operation plus, if desired, the period necessary for sales to return to normal after repairs are completed.
Depending on the sophistication of the buyer, you can leave out or add more detail.
The idea here is to give them a basic idea of what it covers and how it works. If necessary, greater detail, and options can be addressed at the next meeting.
I also use the formula to get an estimation of the value to be insured for quoting purposes. I have yet to find a prospect who will fill out a BI worksheet early on in the process.