Business and commercial
Your client stopped being an employee, and their coverage needs changed with them.
Commercial coverage for the clients of fee-only advisors: general liability, professional liability, workers' comp, cyber, and the key person, buy-sell, and overhead coverage that sits inside the financial plan.
Aligned Path places commercial insurance for the business-owner clients of fee-only advisors and RIAs: general liability, business owners policies, professional liability and errors and omissions, workers' compensation, commercial auto, cyber, key person and buy-sell funding, and business overhead expense. The referring advisor earns no commission and keeps the planning relationship. Aligned Path is paid by the carrier when a policy is placed. Neither the advisory firm nor the client pays a separate brokerage, shopping, placement, or servicing fee. We do not market other products to the referred client.
Looking for coverage for your advisory firm? Read our RIA E&O and cyber insurance guide before comparing quotes or changing insurers.
It arrives as a contract clause, not a planning question.
A common version: a dentist buys into the practice she has worked at for six years. Another: an anesthetist keeps working at the same hospital, switches to a 1099 arrangement, and is now technically a business with contract obligations nobody walked him through. Neither calls their advisor about insurance. They call because a contract asked for a certificate by the fifteenth.
That timing is the problem. By the time a client asks, they have usually been quoted something online already, or the landlord has recommended someone. If you work with high-earning professionals in their thirties, these requests tend to arrive in clusters, since people who trained together also tend to reach ownership around the same time.
The coverage a new owner ends up needing.
General liability
Liability coverage to compare with the business’s operations and contract requirements. Send the lease or client agreement so we can check requested limits and endorsements.
Professional liability and E&O
Errors and omissions for consultants, engineers, and design professionals. For clinical malpractice we will tell you when it belongs in a specialty market instead of ours.
Business owners policy
A package of property and liability coverage for eligible businesses. Compare the benefits, exclusions, and price with separate policies before deciding whether the package fits.
Workers' compensation
Required in most states once employees are on payroll, though the exact threshold varies by state and industry. The first hire is when to check, and it usually happens between annual reviews.
Commercial auto
Including hired and non-owned, which is the gap that shows up when an employee runs a work errand in their own car.
Cyber
Ransomware, breach response, and the notification costs that follow. Relevant to any practice holding patient or client records, which is most of them.
Key person and buy-sell funding
Key-person coverage addresses the business’s financial loss if an important owner or employee dies or becomes disabled. Buy-sell funding supports an ownership agreement. Size each from its purpose and review the agreement’s terms with the appropriate legal and tax professionals.
Business overhead expense
Disability coverage that can reimburse eligible operating expenses, such as rent and staff costs, while an owner is out. Business-loan payments depend on the policy and any applicable rider. It is separate from individual DI.
Three things worth checking with a new owner.
Personal disability coverage will not pay the lease.
An individual DI policy replaces a slice of the owner's income. Business overhead expense is a separate policy that can reimburse eligible expenses, such as rent and staff costs, during a covered disability. Whether an equipment note or other loan payment is covered depends on the contract and any applicable rider. Benefit periods and underwriting vary by policy.
Buy-sell agreements tend to outgrow the coverage funding them.
Agreements get drafted at the closing table and name a funding mechanism that nobody buys afterward. Or the coverage was bought and then the valuation grew without it, so a document written around, say, a $900,000 buyout is standing behind $400,000 of policy. It is worth asking for the agreement and the current in-force amounts side by side.
Hitting the required limit is not the same as satisfying the contract.
A hospital or landlord agreement asks for a dollar limit, and then asks for additional insured status, a waiver of subrogation, primary and non-contributory wording, and notice of cancellation. Those requirements are easy to miss when a policy gets bought quickly, and they are checked at certificate review, which usually lands close to the client's start date.
You do not have to become a commercial lines expert to catch any of this. You mostly need one question ready for the review where a client mentions, in passing, that they are thinking about going out on their own.
What advisors ask before the first referral.
My client is a W-2 employee who is about to buy into the practice. When should we start?
Do you handle medical malpractice for physicians, dentists, and CRNAs?
The client's contract says they need $1M in coverage. Is that all there is to it?
Does the advisor stay in the loop on commercial work?
What states can Aligned Path write commercial lines in?
Have a client going out on their own?
Send the contract language if you have it. That is usually the fastest way to find out what they actually need.