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5DifferencesBetween
CommercialandPersonalLines
Insurance
TonyCanas,CPCU,MBA,AU...

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5DifferencesBetweenCommercialandPersonal
LinesInsurance
Mar27,2015

4,225views

25Likes

5Comments

Wevealreadywrittenaboutthechallengesfacingthepersonallinessideofthe
insuranceindustryandsharedonesuggestiontofightthecommoditization.Our
suggestionwasaimedatthecarriers.Itisabiggergoalthananyoneagentor
carriercanaccomplishalone.Inthemeantime,traditionalagentsandbrokers
needtoreinventthemselvestosucceedinthenewmarketplace.Thisseriesof
articlesismeanttohelppersonallinesfocusedagents,CSRsandunderwriters
prepareforatransitiontocommerciallines.

Imageviainnosight.com

Asweallknow,inthepast,everyonehadalocalagentwhotheyconsultedat
renewal,broughtpaymentsto,andevenvisitedwhentheyhadaclaim.Now,
manypeoplereceivepaperlessrenewals,havetheirpaymentsautomatically
drafted,andcallan800numbertoreportaclaim.Manypeoplearepurchasing
theirautoorpropertypoliciesonlineorthroughan800numberorawebsite,but
theindustryhasntprogressedtoofferingtheseoptionsforallbutthemost
simplebusinessrisks.Businessesvaluetheserviceagentsprovideandareactively
lookingforagentswhowillprovideknowledgeanddirectioninprotectingoneof
theirbiggestassets.
Thiscreatesatremendousopportunityforagents.However,ifanagencyhasbeen
focusedonpersonallinesinsurance,transitioningtoacommerciallinesfocus
maybeintimidating.Forthenextfewmonths,inadditiontoourtypicalcareer
advice,insnerds.comwillbesharingsomegeneralinformationoninsurance
topicsthatarespecifictothecommerciallinesinsuranceproducer.Today,wewill
highlightsomekeydifferencesbetweenthecommercialinsuranceconsumerand
thepersonallinesconsumer,andwewilldiscusstheeffectsthiscanhaveonthe
sellingandunderwritingprocesses.

Imageviaunlimitedinternetsuccess.com
1.NamedInsureds:
Onapersonallinespolicy,theNamedInsuredwillbeanindividualoramarried
couple.Forthebusinesspolicy,thereareavarietyofentitytypes(soleproprietor,
partnership,limitedliabilitycorporation,corporation,etc.)thatcouldbelistedas
theNamedInsured.Dependingontheownershipstructure,theremaybe
multipleNamedInsuredsonasinglepolicy.Understandinghowdifferententities
aresetupiskeytounderstandingwhothepolicyisprotectingandhowto
frontlineunderwritetheaccount.

Imageviaoxbonding.com
2.PropertyConcerns:
Whenwritingpropertycoverageforpersonallinesconsumers,agentsare
typicallylookingtocoverhomesandtheircontents.Propertycoveragefor
commercialconsumerscancoveramyriadofdifferentbuildingtypesoffices,
storefronts,warehouses,etc.Contentscoveragemaycoveranynumberofitems,
suchasinventory,furniture,propertyofthebusinesscustomers,and/or
machinery.

Imageviabeachcitybuilders.com
3.LiabilityConcerns:
Commercialconsumerswillhavebroaderconcernsthanpersonallines
consumers.Underwriterswillconsiderfourdifferentliabilityexposures:
premises,operations,products,andcompletedoperations,whilepersonallines
consumersprimarilyhaveonlyapremisesexposure.Briefly,premisesexposureis
thepotentialthataclaimcouldarisesolelyduetotheconditionofthepropertyin

whichthebusinessoperates,operationsexposureisthepotentialthataclaim
couldariseintheprocessoftheworktheinsuredperforms,productsexposureis
thepotentialthataclaimcouldariseduetotheproductsthattheinsuredsells,
andcompletedoperationsexposureisthepotentialthataclaimcouldarisedueto
theworktheinsuredperformsafteritiscompleted.Becausebusinessescanhave
uniqueoperations,itisimportanttounderstandwhichtypeofliabilityposesthe
mostriskandwouldlikelyleadtoagreaterchanceofclaims.

Imageviaemergeblog.net
4.AutoInsuranceConcerns:
Businesseshavemanydifferentneedswhenitcomestoautoinsurance.Itis
essentialtounderstandwhothedriversareandwhatthevehiclesareusedfor.
Whilethesesameprinciplesapplywhenwritingpersonallinesinsurance,the
varianceinvehiclesandusesaremuchgreateronanautoinsurancepolicy.
Further,thereareoftenadditionalregulationsthatapplytocommercialrisks.
Driversmayberequiredtohavespecialdriverslicensesdependingonthesizeof
thevehicles,andhaulingcertaincommoditieswillrequirefinancialfilingsthat
willbenewtothepersonallinesagent.

Imageviasignsexpress.co.uk
5.PolicyForms:
Finally,oneofthereasonsthatpersonallinesinsurancehasbecomeso
commoditized,otherthanthesimilaritiesbetweentheinsureds,isthesimilarities
betweendifferentinsurersforms.Commercialpolicyandendorsementformscan
varydrasticallyfromonecarriertoanother,andinmanycases,insurerswill
manuscriptendorsementstocreatecoveragespecifictoanindividualinsureds
needs.Agentswillneedtounderstandtheadvantagesthattheformstheyare
sellingoffertotheinsured.Independentagents,inparticular,oughttofamiliarize
themselveswiththedifferencesbetweenthecarriersthattheywriteforandbe
cognizantofwhichcompanywouldbethebestfitforeachaccountinregardsto
coverage.
Nextweek,wewillcontinuethisserieswithanotherarticleaimedateducating
agentsaboutcommerciallinestopics.Inthecomingweeks,wewillreview
coveragesthatarespecifictocommercialclients,differencesinfrontline
underwriting,andbestpracticesforservicingthebusinesscustomer.Ifthereis
anythingspecificyoudliketoreadabout,postyoursuggestionsinthecomments.
ThisarticlewascowrittenbyTonyCanas,RVPoftheWestCoastat
InsNerds.comandCarlyBurnham,RVPoftheEastCoastatInsNerds.com.
TonyCanasisayounginsurancenerdandspeaker.Hehasworkedinclaims,
underwriting,financeandsalesatthreedifferentinsurancecarriers,fivecities
andfourstates.CurrentlyhestheTerritorySalesManagerforNorthern
CaliforniaatAmericanModernInsurance,apartofMunichRe,theworlds
largestreinsurancecompany.TonyisalsoonVicePresidentoftheGoldenGate

CPCUSocietyandamemberoftheNewDesigneeCommitteeattheNational
CPCUSociety.Tonyispassionateaboutinsurance,technology,innovationand
aboutengagingMillennialsintheinsuranceindustry.
CarlyBurnhamistheotherhalfofthedynamicduo.ShescurrentlyaCommercial
LinesUnderwriteratErieInsurance.CarlyisalsoaDirectoratthePresqueIsle
CPCUSocietyandamemberoftheNewDesigneeCommitteeattheNational
CPCUSociety.AsacofounderatInsNerds.comshehasthedifficulttaskofbeing
Tonyscoauthor,keepinghisconstantflowofcrazyideasfocusedandhelping
fleshingthemoutintousefularticles.
TonyandCarlyarebothCPCUsandhaveMBAsfromIowaStateandtheymet
whilerunningNationwidesGenYAssociateResourceGroup.
Ifyoulikedthisarticleyoumightlikesomeofpreviousones:
10CommandmentsfortheYoungInsuranceProfessional
7WaystoKeepUpToDateWithInsurance
8NecessitiesforYoungProfessionals
4CornerstonesforaStrongBrand
7WaysTinySatellitesWillCompletelyTransformInsurance
Ifyouenjoyedthisarticlemakeyousureyoudon'tmissanyofourfuturearticles
(especiallythesecondpartofthisarticle)byclicking"Follow"underTony's
pictureatthetopofthearticleorbyaddinghimasaLinkedInconnection.

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JimJensen
Retired
Commercialcoveragehasmanydifferencesfrompersonsllines.The
NationalAllianceoffersseveralclassesoncommercialpropertyan
commercialliability.DesignationsforCICandCRMareimportantstepsin
developingacompleteunderstanding.Agentshavealegalresponsibilityto
provideproperandadaquatecover.Missingcoverageisanerrorthatcan

resultinseriouslawsuits.
Like (1)

Reply(1)

March28,2015

TonyCanas,CPCU,MBA,AU,ARM,ARe,AIC,AIS

TonyCanas,CPCU,MBA,AU,ARM,ARe,AIC,
AIS
AUTHOR 2nd

InsuranceSuperheroinTraining,Blogger,Speakeron
MillennialsinInsuranceIndustry
Completelyagree.Wearebigfansofcontinuingeducation,
bothCarlyandIhaveourCPCUsandI'mgettingstartedonmy
CIC.Wearealwaysencouragingourfellowinsurance
professionalstopursuecontinuingeducation.Thisseriesis
meantasanintroductionforpersonallinesfocusedagentsto
starttheirjourneytowardscommerciallines.Thankyoufor
yourcomment.
Like

March28,2015

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AriannaHuffington

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PresidentandEditorinChiefatTheHuffingtonPostMediaGroup

WhyImJoiningUbersBoard
Apr27,2016

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HuffingtonPost.
Ivealwaysbeenfascinatedbyallthewayswearetransforminghowwework,
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AndthentheresTravis.Inthelastfewyears,hehasbecomeaclosefriend,andI
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