The Elliotts' luck held out earlier this year, when they tackled the thorny issue of liability insurance for the roughly 35 small-business owners who belong to Massachusetts Chimney Sweep Guild, a professional organization representing outfits that clean and service business and residential chimneys, wood-burning stoves, and venting systems. The guild's experience finding coverage illustrates one of the benefits to be gained when tradesmen and self-employed entrepreneurs band together for education, training, safety, and customer-relations purposes.
ENTREPRENEURIAL UNITY. "Liability insurance has been a hot topic, as many of us experienced doubling of our insurance premiums this year," explains Michelle Elliott, who uses the Internet moniker "SootGirl." (Her husband, as you might guess, goes by "SootGuy.") "But this year the guild was proud, and a bit relieved, to offer members coverage under a group policy."
Instead of forking over the increased premiums and complaining about them at meetings, guild members decided to leverage their collective weight and find a better way. The Elliotts approached their insurance agent, independent broker Tom Coonan. "He is an excellent agent who has access to many different carriers," Michelle enthuses. Meanwhile, she sent a questionnaire to guild members asking them about past claims, volume of business, and other pertinent items.
Many of the largest insurance agencies do not want to provide liability insurance for small companies like roofers and chimney sweeps, Coonan explains, since their line of business involves physical work and a higher risk of accidents, injuries, and damage to customers' properties. For the same reasons, such businesses find workers compensation insurance impossible to get, meaning that they must turn to a pool administered by the state of Massachusetts.
SPECIALTY OUTFITS. Coonan changed that. By working with a variety of carriers, including some that specialize in nonstandard and hard-to-place policies, he was able to find a few that were interested in the handling the sweeps. "Standard companies won't touch the guild because they have so few members. The total premium has to be over $1 million before the larger insurance companies will underwrite a group," Coonan says. Of the firms that expressed interest in insuring guild members, Coonan says he opted for the one with the best rates, coverage, and total package.
Guild members are thrilled with the plan and hope to get the group liability coverage again next year, Elliott says. It is just one of the benefits the members realize from joining the group, which was established back in 1980 as a means for sweeps to network and share the latest advances in chiney-sweeping techniques and technology. "The chimney-sweeping trade had a sort of resurrection during the oil crunch of the '70s, and after an article appeared in Mother Earth News," Elliott explains, adding that the Chimney Safety Institute of America, highlights safety issues and professional training, as well as trade conventions and conferences.
Unlike plumbers and electricians, chimney sweeps do not have to be licensed by the state, at least not in Massachusetts. The guild promotes education through certification by the Chimney Safety Institute of America, conventions, and conferences. Now the sweeps can add a new course: negotiating as a team. Karen E. Klein is a Los Angeles-based writer who specializes in covering covered entrepreneurship and small-business issues.