INSURANCE
Do You Really Understand Your Insurance Policy?
Learning the basics of these 3 types of coverage can set you up for success when the unexpected happens
By Frank Thompson
For more than 33 years, I’ve attended and exhibited at propane trade shows across the United States. Over that time, I’ve had the opportunity to speak with hundreds of propane marketers. Some stop by our booth because they’re curious about the insurance companies we represent. Others are simply looking for a free pen or a propane stress ball. Many come by to catch up with old friends.
What surprises me is how few people take the time to ask meaningful questions about their insurance.
That’s concerning because, for most propane companies, insurance is one of their largest operating expenses. More importantly, it protects everything they’ve spent years building.
Many business owners assume every insurance agent understands the propane industry and that one policy is essentially the same as another. When the renewal arrives, the policy often gets tossed into a drawer without ever being read.
Think about that for a moment.
Companies with millions of dollars in assets routinely place their future in the hands of someone they may have never met. They may not know the agent’s experience or credentials, haven’t had their coverage explained and receive a quote based largely on last year’s policy. Too often, there isn’t even a written proposal — just a price quoted over the phone at the last minute.
One propane marketer made a comment I’ll never forget:
“I appreciate an agent who knows propane, but what I really need is an agent who knows insurance — and can help me understand it.”
That statement perfectly captures the challenge facing many business owners.
When you purchase an insurance policy, the policy assumes — in writing — that you’ve read it and understand what you’ve purchased. That’s a daunting expectation when many commercial package policies are several hundred pages long.
The reality is that buying insurance is nothing like buying a vehicle. When you purchase a truck, you can see it, drive it, compare features, inspect the workmanship and evaluate it against competing models.
Insurance is different.
You can’t test-drive an insurance policy. You can’t look under the hood or take it for a spin. What you’re really purchasing is a promise — a promise that if you experience a covered loss, the policy will respond as intended. That makes understanding what you’ve purchased just as important as the price you paid for it.
So, what should propane marketers actually understand about their insurance coverage?
You don’t have to become an insurance expert, but you should understand the basics of the three coverages that protect the majority of your business: property insurance, general liability insurance and business auto insurance. A good agent should be able to explain each of these in plain English.
1. Property Insurance
Most business owners know that property insurance covers buildings and equipment after a fire, windstorm or other covered loss. But that’s only the beginning.
Do you know how your buildings are valued? Are they insured for actual cash value or replacement cost? If your bulk plant or office was destroyed tomorrow, would your policy pay enough to rebuild it at today’s construction costs?
What about your propane cylinders, tanks, meters, regulators, pumps and other equipment? Are they all covered? If they are stored at multiple locations or temporarily at a customer’s site, does your policy still protect them?
And here’s another important question: If a fire shuts your business down for three months, how will you continue paying employees, your mortgage, utilities and other operating expenses? Business income and extra expense coverage can mean the difference between surviving a disaster and permanently closing your doors.
2. General Liability Insurance
General liability insurance is designed to protect your business when someone claims you’ve caused bodily injury or property damage. But not every liability claim is automatically covered.
For propane marketers, it’s important to understand where your coverage begins and where exclusions may exist. Does your policy include products and completed operations coverage? How are claims involving propane installations or service work handled? What happens if a customer’s property is damaged during a delivery or service call?
Just as important, do you know the limits of your liability policy? A $1 million limit may sound like a lot until you’re facing a catastrophic explosion or serious injury claim. That’s why many propane companies will purchase umbrella liability insurance to provide an additional layer of protection above their primary policies.
3. Business Auto Insurance
Most propane companies own vehicles, but surprisingly few owners understand exactly what their commercial auto policy covers.
Does your policy insure only vehicles titled to the business, or are the employee-owned vehicles used for company business also covered? What happens if an employee runs an errand in a personal pickup while conducting company business? Do you have hired and nonowned auto coverage?
If one of your bobtail drivers is involved in a serious accident, do you know whether your liability limits are adequate? Are permanently mounted tools and equipment covered if they’re damaged in an accident? If a truck is out of service for weeks following a collision, how will that affect your operation?
These aren’t questions you should be asking after an accident. They’re questions you should be discussing with your insurance agent long before a claim ever occurs.
The best insurance agents don’t simply provide quotes — they provide understanding. They explain why certain coverages matter, point out potential gaps and help business owners make informed decisions based on their specific operation rather than simply choosing the lowest premium.
Price will always be important. But when a major claim occurs, the cheapest policy quickly becomes the most expensive if it doesn’t provide the protection you thought you had purchased.
At the end of the day, the goal isn’t just to buy insurance — it’s to understand it. Because when something goes wrong, confidence doesn’t come from the premium you paid. It comes from knowing your business was properly protected before the unexpected happened.
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