The Total Cost of Ownership

Joe Sutton -- May 14, 2012

In the lead up to today's announcement about pricing,I have  started to think about the “total cost of ownership” of our product as it relates to competitors. It is no secret that many of you have access to another program. It is also no secret that we work hard to differentiate ourselves from them.

We certainly have a number of clients whose only need or requirement is professional liability insurance. For those educators, the total cost of ownership equation is relatively straightforward. The cost of premiums with some deduction/addition for the strength of coverage and for some prorated part of a potential deductible payout. Our coverage is now less expensive than alternatives, with a lower deductible. It is easy to see the value.

Many of our clients now however have various contractual obligations to provide insurance. If there is one trend that we have noticed over the last two years, it is the number of educators whose needs change because of these contractual obligations. For you, the total cost of ownership equation includes a few more variables, such as

-The cost to add an “additional insured.”
-The cost to add general liability insurance.(Or “off premises” liability coverage if it is acceptable or appropriate)

I calculated the rough equivalent for an educator in Maryland (where I live) who is a member of a large educational Association,

      EducatorProtect                                                                         The Other Guy   
  $275.00   Professional Liability Premium                            $316.00   Professional Liability Premium *     (includes tax and fees)
  $98.00     General Liability Premium                                  $150.00   Off Premises Liability Premium   
  $25.00    Additional Insured Fee                                         $100.00   Additional insured Fee   
  $8.96       Tax         
  $18.00     Fee         
Total Cost  $424.96                                                                   $566.00    
* With $250 Deductible        


This does not even include the discussion of time. Our system allows you to perform these changes and received the documentation instantly. With the other guy, the process can be much more complicated.


As you can see, not only are our basic premiums lower, the total cost of ownership is much lower.