Selecting a Business Insurance Company
Buying business insurance is one of the most important decisions you can make for your business. Without it, you may have to pay for accidents that happen to your business out of your business and personal assets. Just one inch of water in a small room can cause thousands of dollars in damage. Without the right insurance, that cost may come out of your own pocket.
Choosing the right business insurance can feel overwhelming. Because there are myriad coverages, each with specific details to understand, knowing which to choose can be confusing. Throw in the fact that you not only need to choose the coverages but also the provider, and it may feel even more daunting.
The insurance company you choose to do business with is just as important as the coverages you buy. You can have the best coverage in the world, but if your provider has poor customer support or is unresponsive, you may not have access to the coverage when you really need it.
The Hartford is a leading provider of small business insurance. Customers have relied on the quality and dependability of our insurance products and services for more than 200 years. And we consistently receive top scores for our customer claims experience and service.
When choosing a business insurance provider, ask …
Does the provider specialize in business insurance? Most first-time business insurance buyers instinctively turn first to their personal insurance provider when seeking insurance for their business. That’s OK as long as the provider also has a solid background in business insurance.
You want your business insurance company to understand your business inside and out, how to assess your risks, and what it will take to protect it. The Hartford has been insuring businesses for more than 200 years, and has had a team dedicated to small businesses for over 30 years.
Is the insurance provider financially strong and stable? A carrier’s financial strength rating is a letter grade given to insurance companies to rate their financial stability. The most popular ratings agencies assessing the financial strength of insurance companies are A.M. Best, Moody's, and Standard and Poor's. You want to choose an insurance company that has a stable financial past, present and future. This indicates that they are likely to be able to meet their financial obligations, including paying claims in full and on time, now and in the future.
Check financial strength ratings. Most insurance companies include their ratings on their website. Consider companies with strong scores. By choosing an insurance company with weaker ratings, you take the chance of losing potential clients who are concerned about the claims paying ability of your insurer.
Can the insurance company grow with your business? Industries change and so do risks. Something that may be a major threat to your business now may not be such a big deal in 10 years. However, a new threat may emerge that you need to insure for. Check to see if the insurance providers you’re considering have a history of innovation and keeping up with macro- and micro- business and economic trends.
Does the insurance company care about your business? You want a provider that looks at your business as more than just a commission. They should care about your business’s success. Research the industry appetites of your potential providers – do they know your business? If you’re a small business, you may want to stick with a provider that specializes in small business as well as the industry you’re in. If you go with a provider that doesn’t typically work with your business type and size, they may not have the resources to accommodate your business needs as they change over time.
How to Choose the Right Business Insurance
Once you have found a company that you want to do business with it’s time to research and make decisions on coverages. Even if you decide to work with an insurance agent when shopping for coverage, it’s still a good idea to get a basic understanding of the coverages available and what different insurance companies have to offer.
Step 1: Start researching different coverages. Research the types of coverages that businesses similar in size and industry to yours typically buy.
Step 2: Choose coverages in accordance with your business plan. Understand where you want your business to go and choose the coverages you need right now and plan which ones you’ll need in the future.
Step 3: Request a quote. Get several quotes from different companies and compare coverage details, price and customer service offerings. Keep in mind, the lowest priced product may not offer the best overall value. Choose the best insurance solution for your business that’s within your budget.
Step 4: Review your quotes. Even if you must purchase coverage within a very short timeframe, it’s still helpful to review your quotes and spend some time learning the differences between coverage offerings – no matter how soon you want to buy the coverage.
Step 5: Stay current with your coverage. Your business and industry is likely to change overtime. This means new threats and risks can emerge while others may dissipate. Review your coverage periodically to determine if you need to make any adjustments. You may need to add coverage, or you may be able to lower coverage limits or even drop coverage depending on how things have changed for your business.
What Do I Need to Get a Business Insurance Quote?
Getting a business insurance quote is one of the most important parts of buying insurance. The quoting process shouldn’t take long. But if you don’t have the necessary information ready, you may not be able to get a quote or it may not be accurate. Here’s a list of the types of information you may need to provide in order to get an accurate quote on insurance for your business:
Basic Business Information:
Gross Annual Sales
Experience – Number of years in business
General Operations – Main business functions
Number of Employees
Total Annual Payroll
Tools and Equipment
Building Square Footage
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Where to Get Business Insurance
Another major decision that you’ll need to make when buying business insurance is whether or not you want to go through an agent or by directly from the company. Larger businesses often have risk managers who can assess the business’s needs and choose the insurance coverages. Your small business probably doesn’t have a risk manager. That’s where a good business insurance agent may be helpful.
An insurance agent will work with you to help you choose the right coverages for your business and the right company to buy them from. Agents can help explain what risks different coverages help protect against. They can also help you figure out what coverages you need and don’t need so you don’t spend more than you have to. If this is your first time buying business insurance, or you have questions about the process and coverages, consider talking to an experienced insurance agent or business consultant.
The same factors that you weighed when researching insurance companies can be applied to selecting an insurance agent. You want an agent who specializes in small businesses and has experience with your industry. Make sure that the agent can handle an evolving business and most importantly, cares about your success.