What are the real reasons that educators purchase insurance? I don't mean specific policy features or coverage details, but what drives them to seek insurance. Recently, someone asked me to discuss this, so I will share it for you. please note that this is the summary of my conversations and experience, and not a scientific study.
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A contract requires it. This is the most cut and dry scenario. Increasingly, if educators contract with schools , municipalities or other learning contractors they are required to carry insurance.
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Growth. Many tutors or educators start out with a small "friends and family" style practice where they know every student and operate in an informal fashion. One day that look around and realize that their little operation has grown and they now tutor the children of families that they don't know. They now have real revenue ($10,000- $15,000 or so). All of the sudden they recognize that they are a small business and their risk profile has changed.
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Personal assets. Many educators are providing second incomes, or are in second careers. If they or their family have personal assets that they want to protect, insurance is a great tool. The corollary to this is they tell us that their spouse/significant other recommend insurance. I have always thought those reasons were driven by the same thinking.
- Marketing. More and more clients are telling us that they promote themselves as being insured. They feel that it lends credibility and professionalism to their practice.
Obviously these are not all of the reasons why educators purchase in insurance, but these are the top reasons that people tell me.
Feel free to comment if you have any thoughts