You know you need business insurance, but you don’t know what to do to get started.
The good news is that in all likelihood you already have some experience with the process of obtaining insurance, be it car insurance or renters’ or homeowners’ insurance.
So you already know that you should shop around and compare rates, but how do you go about finding the right agent or broker for you?
You might be tempted to go to an agent that you already know: a friend, a cousin, or an agent with whom you’ve previously worked, but the first thing to do is a little research on the types of insurance you think you might need. One place to start is through a trade association in your industry. Consider the types of hazards businesses in your field might confront and keep those in mind as you plunge into the critical act of buying business insurance. Here are nine critical questions to ask before you buy business insurance:
Related Article: Does Your Small Business Need Commercial Liability Coverage?
What Are Your Experience and Credentials?
Experience and credentials are not the only litmus test that matters, but they can tell you a little about your agent or broker. An agent with limited experience can make up for that with enthusiasm and energy while an established agent might not be hungry enough for your new business. The main thing is to get to know your broker beyond the basic information on her card or website.
Can You Provide References?
References should show that your agent or broker has happy, satisfied clients. Checking references also can help you understand how a particular agent works with clients. Is he hands-on or do his clients only hear from him once in a blue moon? Would a client hire him again, or is she unhappy with his service? Agents may tend only to give you their happy clients on their referral list, so go beyond that and look for reviews of the brand or specific agent online as well.
Who Will Handle My Business?
Your broker or agent may have a team of administrators or office support helping her cover all the bases. However, just as you should get to know your agent, you should also have some idea of who is working in the office in case of emergency. This knowledge could help you in the future if you need to make a claim, and your broker is out of the country or away from the office, you’ll know who you can call. Also ask: is your policy handled locally or through the corporate headquarters? Can you call your local agent, or will you be on hold with customer service for an hour?
How Long Does It Take You to Respond to Questions or Problems?
Some agents will respond within hours, and others may take longer, depending on the urgency of your query. The answer to this question will give you an idea as to your broker’s contingency planning. Some agents will go above and beyond to be available to you while others may be a little hands-off. If this is your first business insurance policy, you might feel more comfortable with extra attention whereas a seasoned business-insurance-buying veteran might feel more comfortable with less accessibility.
Do You Personalize Policies?
This is when business insurance gets even more interesting. While a franchise might not need made-to-order coverage, other types of small businesses that fall outside of traditional patterns might need highly modified policies. If your company falls into this category, it is highly beneficial to have an agent or broker who has experience building these kinds of customized policies. A good agent will be willing to work with you to create a comprehensive and specialized business owner’s policy that’s just right for you. For example you might need Worker’s Compensation coverage as well as liability coverage, so you want a policy that offers those features, and not one that provides unnecessary coverage for your business.
Will You Assist With a Risk Assessment?
While your agent or broker might not be able to walk through your establishment and point out potential pitfalls, she should be able to help you assess where you can improve policies and procedures to reduce your risk and liability. A diligent broker may even examine your company’s financials to assess your business’s financial situation.
What Is the Carrier's Rating?
Once you’ve made it through the outset of the process, your agent or broker will come back to you with several quotes from insurance companies. Business insurance quotes are not created equal, so you need to assess carefully each policy and compare it to others as best you can. Make sure to research the carrier that will possibly provide your policy. You can use Moody’s or AM Best to see how a proposed carrier is rated.
How Do You Help Customers With Claims?
Hopefully, you’ll never have to make a claim, but if you do, it’s good to know what you can expect from your broker. A licensed independent agent is legally obligated to be your advocate in the event that a claim needs to be made. Remember that while you should keep your own records, your agent should help you file your claim and monitor it to make sure that everything happens promptly. With the knowledge of what you can expect under the worst case scenario, you’ll be happier in the long run.
Related Article: To File or Not to File: A Business Insurance Claim
What Does My Insurance Policy Cover? What Is Excluded?
Before you make your first payment on your policy, make sure you understand exactly what is covered and what is excluded. Insurance policies are by their very nature extremely complicated. It is up to you to be well-informed. A conscientious agent or broker will sit with you and explain the ins and outs of your policy. You should feel satisfied with your understanding of your coverage and confident that your agent knows her industry inside and out and is patient enough to help you understand your policy.