USAA will start writing its own small business insurance policies for the first time.
Initial coverage in the space will be available immediately in five states – Arizona, Colorado, Illinois, South Carolina and Tennessee. Plans call for an ongoing rollout to other states through 2021.
The insurer – whose clients include U.S. military veterans and their families, has offered small business insurance for 30 years through unaffiliated companies via its USAA Insurance Agency. This is the first time USAA will be offering its own product in the space, a move it said is based on increased member demand.
“For small business owners, their business is their life and livelihood,” Jim Syring, Retired Vice Admiral, United States Navy, and USAA’s Property and Casualty President, said in prepared remarks. “They put their heart into building their business and work around the clock to make it a success. We believe we understand veterans better than anyone and want to be there to support them and their business every step of the way.”
The military veteran-related small business market is a sizable one. There are 2.4 million veteran-owned small business firms, and they employ 5.8 million people, according to statistics from the U.S. Small Business Administration. These businesses cover a variety of sectors including finance and insurance, transportation and warehousing, mining, construction, manufacturing, wholesale trade, real estate, utilities, agriculture and forestry.
USAA said its new coverage will be able to “help protect small business owners of virtually any size, in any industry and virtually every state.” The insurer explained it can serve businesses of all sizes through USAA Insurance Agency, but its “manufactured product” is currently targeted to businesses with under $500,000 in annual revenue. That said, USAA explained it will expand this as it looks to serve evolving member needs.
Initially, USAA is marketing a business owners policy product with basic, standard and premium levels of cover. Coverage elements include business liability, business personal property, business income, cyber, computer fraud, terrorism, hired and non-owned auto, and employment practices liability.
Workers compensation coverage comes through USAA’s agency partners. Members will be able to purchase the new USAA proprietary product and its ongoing Agency offerings both digitally and through member service representatives.
According to USAA, its new small business insurance is underwritten by subsidiary Garrison Property & Casualty Insurance Company of San Antonio.
USAA Insurance Agency will still offer business insurance products underwritten by third-party insurers. USAA or its affiliates are not involved in the underwriting, but the Agency gets a commission on the sale or renewal of these products, as well as potential performance-based compensation, the company said.