Ken Jones - The Ways that Small Business Owners make Insurance Mistakes

Ken Jones – The Ways Small Business Owners make Insurance Mistakes

On this episode of AidToNav Podcast, Robert sits down with the W3 business development coordinator, Ken Jones.

W3 Insurance is a top 100 casualty and insurance agency in the United States providing risk management for clients since 1925. Ken offers a unique perspective on the importance of insurance for Small business amid COVID-19 and how it can help your business withstand rough of the times. Ken shares insights on how to choose the right insurance and key tips to consider when dealing with an agent. He also shares the interesting analogy of cheap parachute that essentially means, “You only get insurance when you need it and if doesn’t cover the loss or the claim, you paid a premium for nothing.”

With over a decade of experience in the insurance industry, Ken surely knows a thing or two about insurance. Tune in.

In this episode you will learn:

● Right question to ask an agent
● Importance of Insurance for startups and SME’s
● Things that W3 does to give back to the community


[0:16] About Ken, a snippet of his Journey
[2:14] Call the Coast Guard – Ken’s Story
[4:27] How W3 focuses on Small Businesses
[5:51] Best piece of advice for Small business owners to choose the right type of insurance
[[14:31] Talks about mistakes micro-businesses are making with their insurance choices.
[16:50] Difference between Property and Casualty
[20:38] What’s the biggest mistake an SME’s make
[24:07] How important is planting those seeds for the business that’s . Networking


“Insurance is not profitable to an agency until it’s 3rd year.”

“Getting somebody on price means they are likely to leave you on price.”

“We don’t feel like we are better because we are bigger, we feel like we are better because we are client-centric.”

“Risk Management is never an issue until it’s an issue.”

Resources Mentioned:

Recommended Book E-Myth:
W3 Website:

Connect with Us:


Ken Jones Interview Transcript

Robert: I have dealt with some form of insurance and insurance agents for the past 20 years, yet it wasn’t until I moved to Florida just over four years ago that I really understood the need for insurance. Throw on the experience of dodging Hurricane Irma and the following guests moved from just being on my phone to being in a speed dial position. My guest is Ken Jones, Business Development Coordinator for W3 Insurance, Wallace, Welch, and Willingham a top 100 property and casualty insurance agency in the United States providing risk management for clients since 1925. Clients of W3 Insurance include companies as varied as solopreneurs all the way up to the Dali Museum and every size in between. Ken has a 2-20 Property and Casualty License and began his insurance career in 2008.

Ken Jones, welcome to the AIDtoNAV podcast. How are you doing today?

Ken: I’m great. I’m practicing my social distancing working from home Robert.

Robert: It’s really an interesting world that we’re in right now and especially for those small and micro-sized businesses. I know you as a doing that business development and you’ve had to get a little creative with reaching out and doing things from a distance.

Ken: Yep. Yeah, we’re exclusively, our agency is about 115 employees headquartered downtown St. Petersburg. We also have a satellite office of about 10 individuals in Sarasota, but probably 85% of us are working from our home offices now. We haven’t suffered productivity. So, this could be the future for a lot of us.

Robert: Sure could. Well, you know, I was going into my intro before you got on about insurance and I didn’t really realize a lot about insurance until I got to Florida. I knew it was there, but we’re dealing with real-time insurance with hurricanes, those types of things. If anybody knows about risk management, it’s you, Ken. I mean, what did you audition for a Tom Hanks film one time where you were out spearfishing, and the coast guard had to pick you up. I’ll let you pick up the rest of the story there.

Ken: Yeah, it’s funny. Well, I just had my 27th anniversary on June 26th, my friend and I were taking a day off from work aka playing hooky and we went out on his 23-foot boat, about 20 miles outside of Pass-a-Grille, Florida for just some spearfishing. We liked fishing on Thursday because the rest of the world is still working, which we should have been doing when you hear the rest of the story and I’ll encapsulate it. But there were only two of us on the boat, which means when we were underwater, we didn’t have anybody in the boat, which is always a safety precaution. So, that was our first mistake. The second mistake was we didn’t let enough anchor rope out when we did the dive, which is insurance. You always want to have extra scope, but because it was one of those mirror-calm days like we’ve been having in the summer, we probably should have let another 50 feet out.

But short story, the end of the story was we were rescued by the coast guard because our boat blew away from us during a squall while we were diving. When we surfaced, there was lightning, high winds, pieces of hail were pelting us and there was no boat to climb into for safety. So, we drifted all night, which was actually once the wind laid down, it was kind of beautiful. The Milky Way is very visible out there and there was phosphorescent plankton in the water. That was kind of like a Disney movie, you know. But the good news is the coast guard sent out a cutter that found us, which was like a needle in a haystack. So, proper planning and we can segue this into insurances. Know the risks ahead of time plan how to avoid them and just in case, make sure you’ve got insurance which in our case was we had our buoyancy compensators so we could float

Robert: You at least had that, but I know I saw you write somewhere you didn’t have your flashlights; you didn’t have your flares, you didn’t have anything else that you would have really thought about. I know you made that transition in it into insurance and that’s what I want to talk about, is for that micro and small business. I know we were talking before we got on the air and we’ve had this discussion before that your company although it’s larger in scope and it has that insurance offering for the Dali Museum in St. Pete, but yet the bread and butter are really that small and micro-size business isn’t it?

Ken: Right. If you look at the pyramid of companies in America, the top one or 2% are the hippopotamuses and the elephants and the whales okay. So, all agents, they all want to hit the home run. They all want to go after those big, giant accounts. But when you look at the rest of the triangle, the largest percentage of businesses in America are small businesses. So, we have a dedicated unit in our agency. We call it the SBU, the Select Business Unit, and that’s based on premium, which 95% of the companies we insure fall into that category. So, those are the companies that need the help of a big agency, but with the hands-on touch of like a boutique firms. So, that’s how we work to address that.

Robert: So, how does a small business owner know what types of insurance they need, if they’ve got a dream of going into business, or they’ve already gotten into business, how do they really know what they need especially when it comes to the commercial or business side of it?

Ken: Well, nowadays Robert, with social media, there are so many different checklists that individuals can go and research before they get into business. If you do this long enough like I’ve been in the market for a Weber grill. So, I researched it and I know how many burners I wanted. I know what construction of the grills. I want the ceramic coating. I want the tank scale. I knew what I wanted before I did it. So, most people need to go online, do the research, and then pick an agent because insurance is rarely between the end-user and the carrier. You need an agent in the middle. Now, there are some exceptions to that. We’ve all have heard of the Geicos and the Progressives since where 15 minutes can save you 15%, but we represent carriers a lot of the clients that we deal with can’t get to directly.

So, partnering with an agent can really be like the X factor when it comes to insurance. I don’t want to make this a commercial because I know this is supposed to be generic for your viewers, but really an agency with a lot of experience. You know the old I think it’s, Farmer’s commercial that we’ve seen a few things, so we know things, you know, the moose and the swing set?

Robert: Yeah.

Ken: We’re large enough to not go out of business. We’ve been in business for 95 years. So, that’s a long time and no, I wasn’t with them all that time. But you really just want to sit down with an agent and explain to them what you’re trying to do and let them go and find different markets or carriers or insurance companies that offer those coverages and then find out what their budget is. Also, you really don’t want to buy price based on insurance. I use the analogy of a cheap parachute. You’re only going to need insurance when you need it and if it doesn’t cover the loss or the claim, you’ve paid premium in for years for nothing. So, do your homework, study, make a list and then audition two or three different agents that either come referred to you or that you find in your local city.

Robert: Yeah. I’ll piggyback on that as the small business owner that’s wearing a number of hats. This is really something where you want to have a 70/30, or an 80/20 type of relationship in the standpoint of 70% or 80% of that information, those facts, those checklists that you have, that’s what you want to be getting from the agent. That’s the information because you’re focused on making revenue to be able to pay for the insurance and allowing them to provide you with the information then doing an apples to apples comparison. If it’s not an apples to apples comparison, call them out on it, call out the agent or call out your representative and say, hey, wait a second, this is here. Why didn’t you have it on there? Or what was this information? Then do your key 20 or 30% where the rubber meets the road, shall we say and do that comparison. Because agents are in the sales business, obviously they’re going to try to sell you. Get past that layer, get to the consultation layer, and get through that information that goes through there. Ken, how did you get into insurance

Ken: Back to your point before I tell you.

Robert: Yeah.

Ken: That’s huge. What you pointed out is that if you’re looking for an advisor, our agency, for example, we’re trying to partner with our clients because a little known fact is that insurance is not profitable to an agency until about the third year. So, we have to retain our clients. Getting somebody in on price means that they’re likely to leave you based on price. Price shopping for insurance is something that your agent should be doing for you each year. When you’re a client of a new agent for the first time, they should provide a spreadsheet on offers, A, B, and C based on premium and coverage and then there is such a thing as self-insuring. It means if you don’t have the money to cover a certain exposure, then you’re still covered. It’s just your pocket and not an insurance company.

I got started in insurance. I was coming out of the corporate IT field and when I was working with an IBM reseller, that’s a company that’s allowed to sell IBM based on your value add, which is usually the software. If you remember back in the day, margins were shrinking, selling cycles were long, the competition was fierce, and I was sick of it. I had to start over every month, every year at zero. Insurance is one of those fields where you have renewals and so if you work hard in years one through five and year six through 10, you’re reaping the benefits of your early five years. Most clients if you’re servicing them, they stick around, and premiums rarely go down. The world we live in is very litigious, so you see an increase in your income just based on lack of attrition and good service. So, I took a look at an agency that had been established, had been around a long time, made the career switch, and am still glad I did.

Robert: And that says a lot for the small business, picking out that type of company and really running their own company that way is that it’s not a onetime sale. It’s a follow-up and follow-through. I know for yourself and, and we could probably have a whole other episode on networking and a whole other episode on the folks that go and join the Chamber of Commerce because they were told they need to join it but yet don’t put in the work, don’t put in the effort, don’t put in the follow-up. It doesn’t pay off. They’re very transactional, not relationship-based and it shows. It shows every single time in their business and it shows in their results.

Ken: I know. I’ve been with this agency for seven years now, and it’s a name that opens doors. It’s not on trial any longer and we don’t feel like we’re better because we’re bigger. We feel like we’re better because we’re client-centric. This whole COVID back in March, we were all about letting our clients know what their exposures could be, how the business interruption was never covered under pandemic coverage or virus coverage because nobody knew. An interesting fact is when 911 happened, there was no terrorism coverage and now that’s a coverage that is offered. Not everybody buys it because unless you’re in a high rise in New York, you probably don’t need it, but we’ll probably see pandemic insurance coming out in subsequent years, based on what’s happened.

It will probably be for the large airlines and shipping companies, those types of things. Back to the interviewing process Robert. When a person’s talking to an agent, one of the key questions they should ask about the proposal is what’s not in here? What are the gotchas on this coverage that you’re offering me? What’s am I going to wake up in the middle of the night realizing when I put in a claim that’s not covered. Ask them where the deficiencies are because some will have those. I mean, I’ve examples if you ever want to know what they are.

Robert: And the good agent wants to tell them. They’re kind of the stories as to, oh, you wouldn’t believe…

Ken: Right.

Robert: …what happened from this standpoint. That small business, when they’re doing it, there’s a couple different phases. As a solopreneur the coverage that they need, especially if they’re in service or in an advice type of business as soon as they start to bring on employees and as soon as they start to get to bring on any sort of space. Talk about the little differences that these micro-businesses are facing with the insurance choices.

Ken: Well, you have folks that work from home and they have very little exposure from property because they’re not having clients coming in. So, from a liability standpoint, we still recommend that they get liability because they may be on the premises of the client and any property damage… An example is you’re driving out to a homeowners association and when you’re going through the guard gate, you knocked down the cover. That’s on you right. So, then as you start to get more and more exposures, let’s say you’re a tenant now in a building, you’re going to need coverage for your contents and the landlord is going to require you to have liability just in case something happens to his building while you’re a tenant. Then as you begin to bring on workers or employees, you’re going to want to cover them with workers’ compensation.

Even though the state mandates you don’t need workers’ compensation insurance with four or less employees, you’re the workers’ compensation at that point. So, if your secretary is putting that 40-pound water bottle on the cooler and sprains her back and can’t go to work, guess who’s paying for her to sit at home and watch Oprah, the owner right. And then as you grow your company, you may have company vehicles. A lot of the solopreneurs need something called professional liability. It’s different if you’re giving advice to people that take your advice and as a result of their taking your advice, something goes South. The big attorney firms you see on TV will be knocking on your door. That’s why insurance is if for no other reason insurance is paramount of importance for attorney fees.

Robert: And I rarely see it talked about or built into the business plan and you know, that’s something that the small business is supposed to do, their 75-page business plan. No, it really is thinking through and saying when could I potentially have an issue? What haven’t I thought about? Looking for those things that are in their different blind spots of what they’re going to do and really take a look at that. You talked about property, you talked about casualty. I always see those terms thrown around. Talk about the differences or how that umbrella works together

Ken: Well, sure. Property is anything like a building, a dwelling. The casualties now that’s an older term, it’s now called liability, or you hear general liability, you hear it called GL. That’s the first thing a landlord’s going to require for you to move in is proof of a policy. Most of the time the liability policy will name the landlord as an additional insured. The reason for that is I can go out and buy a policy tomorrow, cancel it in five days, but I’ve got a piece of paper that says I’ve got insurance for a year. But if the landlord is an additional insured, he gets notified that I canceled my policy after I made one payment. So now he knows that I don’t have coverage and he needs to remedy that.

Robert: So, even if you’re doing it in a coworking environment or something on the lines that still may be an insurance requirement that you have, still may be something that when you’re working at home, that property and having that additional coverage, because it may not be underneath your homeowner’s policy, especially if you’re claiming. We’re not tax accountants, we’re not even saying that we’re that, but if these are the types of things where this web fits together of the accounting, the insurance, your tax situation where you look at it, your laptop at home may not be covered. You didn’t get the right types of insurance to cover it. Because the insurance company, Ken didn’t hear this, but I’m saying that the insurance company is going to look for, hey, that was not underneath your policy. A contract actually means something. So, if you were walking your laptop out to the car and you dropped it, and you said that it was a business expense, and you only have personal insurance, you now have put yourself into an issue. I’ve said this for many years with risk management, it’s never an issue until it’s an issue, until it comes up and you then start looking for, where did I put that policy? Where did I do those things? And having that partnership.

Ken: The one thing an insurance agent never likes to hear is the phone rings and it’s a client. that goes, hey, I was up last night, reading my policy. Well, they’re reading it because they’re looking for, like, I can’t tell you how many people were looking for their coverage for business interruption due to pandemic. It’s excluded, virus is excluded, pandemic is excluded just like you can’t burn your building down and put a claim. That’s arson, that’s called a moral claim. I mean, even though I’m sure it happened a lot. But one thing to remember when shopping for insurance is just go through the scenario a day in the life of your company with your advisor or your agent. Back to another point you made is when they’re starting a business plan one of the areas where most startups never budget enough revenue is for insurance.

They talk about rent, they talk about payroll, they talk about, you know, travel expenses and then they don’t put a number in for insurance. That’s something you need to do before you’re even putting together your business plan is figure all that out because we have a lot of clients that they’re shocked at how much it is just for insurance. They didn’t budget it, but carriers are sensitive to that. A lot of the carriers nowadays do 10 pays, you know, 25% down and the balance is paid out in small increments. It can be ACH right from your corporate account to make it more palatable that way.

Robert: Fantastic! What’s the biggest mistake that you’ve seen a smaller micro-sized business make with regards to insurance?

Ken: The biggest mistake is not planning for the future with the right coverage. It’s going in for the cheap, leaving exposures open and payday doesn’t always come on Fridays. I tell folks. If the agent’s offering it to you, it’s not about making the sale as much as it is about making sure the client is whole when there’s a claim. So, if we’re advising a small startup interior decorator, they’re not thinking it’s going to be X amount of dollars but the thing about what they’re doing is they’re giving advice. They’re dealing with contractors that are coming in and hanging thousand-pound mirrors on the wall in a restaurant. Well, that mirror falls off the wall and hits a table full of patrons guess who is going to be sued? The guy that hung, the mirror, the restaurant, the interior decorator, and guess who doesn’t have enough insurance to cover that? Right. Follow the money.

It’s really do not scrimp on insurance. A wise man once told another wise man is you should have more for insurance than you think you need because those attorney firms they start at a million, Robert. The hot coffee spill, the trip, and fall in Publix because the guy sprayed the rutabagas with the water hose. It’s a million bucks and then to defend yourself could take days, weeks, or months and it’s very disruptive. In fact, there’s a book out, you probably read it. “E Myth”, you know, the entrepreneurial myth. If your readers, your viewers, they have to get their hands on that book and see what it’s all about.

Robert: Yeah. It’s nice to refresh that. It’s nice to know that also with that E Myth concept that you’re so busy, focused as a small business owner on keeping the wind in your sails I like to say, and it’s a play on words. That you’re working with that current business, you’re working with those current things that every once in a while, you do have to take that step back, do that quarterly review, do the educate yourself, bring awareness to what you’re doing, get some new reports or new tracking on that because that’s what’s going to pay off for you in the long haul of doing those types of reviews. We’re going to be talking about all of the different areas and not just insurance but other things here on this channel. So, great points Ken to bring up from that.

Ken: Oh, I’m glad you’re doing this. This will be a huge service to people that find you on social media because there’s a lot of good ideas out there, but yours is going to be organized and it’s going to be step-by-step. It’s almost like going back to my gas grill. In order to put the thing together, you got to read the directions but it’s a whole lot easier to pull up a YouTube video of a guy doing it. So, you’re not only hearing it, you’re watching somebody do it. When he says, well, this has to be this way to get the bolt put in correctly, you know, ahead of time and you don’t think you’re going to break anything. So, kudos to you for coming up with it this.

Robert: Fantastic yeah. The different portions of it. I teased it a bit and I know we could do a completely different show on this, networking. How important is planting those seeds for a business that is six months, a year, two years, three years from now. We like to use the analogy that the boat is stuck in the water and it never gets up on plane because they haven’t planted the seeds, whether it be networking, whether it be contacts that they’re making with potential clients even those that they don’t think are going to be clients right now that don’t have their need. Then they never leave a wake. There’s never a wake left behind. So, you’re not getting that follow-up, whether it be a follow-up call, follow-up email. Your job is 80% networking. How much do you hear from other small and micro businesses? I know the number is shocking.

Ken: Yeah. Networking is powerful because insurance is a have to have product. Everybody I need as a prospective client because everybody has to have. If you drive a car, own a home, rent a home, have a business, play sports, do something. The insurance is always going to be in there. So, rather than have my selling hat on all the time, I like to ask people who do they know that might need pet insurance. Pet insurance is really huge now. Do you know how much it costs for Fluffy to get the hairball removed? Now you just pay a small deductible. Everybody has a pet, but did they ever think about insuring it against those catastrophic vet claims? Small businesses need to do the same thing. But yet when I see a lot of the new businesses that pop up out there it’s like, they’re deer in the headlight. Like I need insurance. Who do I even call? I want them to remember they had a conversation with me two or three years ago and I said, I’m the guy that puts the sure in insurance. Something that they’ll remember and when I give them my card, I said, go put this in your sock drawer where you have those removed links from your watch band and the ring you don’t wear, that part of your sock drawer. It’s funny but they’ll remember that. My card will be there. My cell phone hasn’t changed in 25 years. So, that’s how I do it. It’s just constantly letting people know what I do in the same way small business is run is you’ve got to get out there.

Robert: And proactive, this thing still works. To reach out even if it’s just leaving a message. It does work on making those follow-up contacts being able to do that. So, that’s just something that people are going to hear from me consistently because I love the places that have the grand opening and I never hear from him again. I knew that they’re new, but then I never k-n-e-w. I never knew that they were still in business. They didn’t remind me. They didn’t reach out. They didn’t do anything as opposed to, you know, Ken, I know you’re reaching out, you’re letting folks know, hey, I’m still here. It’s not a sales call. It’s not something that’s providing some sort of value and said, hey, it’s always available for that review. It’s always available to do business, but it’s more of a contact of how are you doing? How’s the family, those types of things. So, I commend you on that, but that’s something that I see so many small and micro businesses really need to do that. They’re trudging through and not actually building up a base of business.

Ken: Yeah. My biggest sale ever in insurance was over a million in premium and it was an eight-year sales process from the time I had lunch with the owner of a large staffing company and then I just do what I call a drip. I ask permission if I can follow up because they all give it to you because then they figure no one ever follows up. I just say Robert said, okay, if every six months or a year, I just give you a quick call or send you a text just to see how things are going and they all say, sure. You’ll never do it, but I have the CRM right. Don’t we? You can even put it in outlook, your calendar. Scroll six months forward, call up the guy, and say how’s everything going. Eight years, he finally called me. He goes, you’re going to get your shot. You’ve been hanging in there this whole time and it was a good ending, a happy ending.

Robert: Yeah. Fantastic. Well Ken stay safe, stay healthy through this. It’s great to see some of the things that W3 does to give back to the St. Pete community. There’s a number of small businesses just like yours around the country and I consider that from our definition a mid-size company because we’re looking at the 10 employees or less, but it takes your type of company to help out those small and micro-sized businesses. They can’t be afraid to reach out and ask for help.

Ken: No, and that’s what we’re really here for. It’s not selling, it’s educating, and an educated client is a good client. They’re a client for life.

Robert: Fantastic. Well, I appreciate all of you tuning in. We’re on YouTube. We’re on all of the major players. So, whether you’re stuck at home or you’re driving back and forth to see clients’, automobile university where you can tune in and listen on your favorite player. Ken, I appreciate you joining us. Until next time make it a great day.

Ken: All right, Robert, be safe out there. Take care.

Robert: Fantastic.


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