How To Select A Business Insurance Broker
A business insurance broker should have experience, be a source of information, alert you to coming changes in the industry, and provide all the coverage you will need in your business.
The diversity of coverage that a business may need could require more than one business insurance broker. Sometimes it is possible to place all your business with one broker. It may also make sense from a cost standpoint, since getting all the needed coverage through one broker may save premium costs over time. Multiline brokers are unique and worth the effort to ferret out from the large group of brokers one can find in the yellow pages or on the Internet.
The ease of finding a broker may depend on the type of business you are running and the amount of potential risk there is in your day-to-day operation. The important point is whether it takes one of more brokers to cover your business, it is money well spent, as it will give you protection if there is a business claim, which may or may not be your fault. Without this protection, one claim can close a business without warning.
The yellow pages, the Internet, your banker, or your accountant can usually be a good source of where to find a broker for your business. You can also ask your friendly competitors whom they use, if your businesses are the same as far as liability or small business coverage is concerned. Sometimes an association you are a member of can lead you to an excellent fit for your business insurance needs. Ask around and see if the same names begin to surface. This is a good indication of a possible answer for this business need. Special needs may be harder to find, and your state insurance commissioner may be a source of help.
In any event, asking around is a start to discovering a business insurance agent with whom you can develop a client-provider relationship.
Trucks and autos are obvious needs and building insurance may be necessary. Job liability and bonds may be another coverage you will be required to have in order to do your type of work. Construction companies would have far different needs than an accounting office or a law office.
What you need to carry is also an excellent reason to deal with an experienced agent. They will know what businesses similar to yours have in force and why.
There may also be state requirements that they know of and you do not. If a problem can happen that can cost you money, then there may be coverage you can purchase to help cover a claim that your company must pay.
Risk is the biggest factor when it comes to getting coverage for a business. A low risk business would find it easier to obtain insurance than say an explosive company or a construction firm. If a company has many vehicles on the road, they present more risk than a business where vehicles are not a requirement to do the work. If the nature of the work is patently more risky, then the coverage may by harder to get, and the premium can be counted on to be higher.
A history of prior claims is also a factor in obtaining coverage for the business.
Small business insurance covers a large area of potential coverage, and each business is rated based on its type of work or potential liability. Business insurance providers have stats on almost every kind of business there is, and they can come up with a quote without too much trouble. If it is an area where they have a history of losses, then it may be harder to get. If the government or lawsuits have gone against the insurance company, they could withdraw allowing the coverage to all their customers. Some service industries have seen this happen. Constructions companies, such as plumbing and electrical, have had problems in recent years.
The decision to file a claim is made on a case-by-case basis by the insured. A history of filing small claims every year can be detrimental to your premium rate, and it may be better to pay yourself and keep your premium down. If you are in an industry, for which it is difficult to get coverage, you may be wise to forego small claims.
On the other hand, if the claim is substantial, and it is likely to cost you a great deal of money, then that is why you carried the insurance in the first place. The decision to file or not file is one that many businesses face each year. Make a well-informed business decision on it and not just an emotional one. The future cost has to be considered.
Hurricane Katrina has proven that there are times to fight for your claims. Insurance companies make decisions based on what is good for their bottom line and that could easily not be in your best interest. Contacting your state insurance commissioner is a way to see if you can get some help on a claim that you feel is being unjustly denied.
In the case of Katrina, there are class action lawsuits that many insureds have joined. Seek advice from a lawyer who is familiar with the law where insurance is concerned. Do not take the word of the insurance company as gospel.
The state insurance commissioner decides what type of policies can be offered in your state. Of course, the insurance company has to be interested in offering the coverage in your state. Currently, in some states, some insurance companies have tried to quit offering some types of coverage. The insurance commissioner has told them if they withdraw in the state, they may not be allowed to do business in other areas of coverage.
Insurance commissioners are supposed to work for the residents of the state and protect the insured within the state from unfair practices. Each state has met this responsibility to varying degrees. It depends on the politics of each state.
One of the best ways to get the best rates for coverage is to get bids from more than one company for the same insurance. This assumes there is not a problem with your business or industry as far as the insurance community is concerned. Do not hesitate to do this if you are in a favorable business, as it could save serious money on business insurance coverage.
There is another advantage of talking with more than one provider; you may get information about industry trends that will be affecting your business. Well-placed agents with large clienteles learn things that are not commonly known. This is good information to be privy too.
Knowledgeable buyers who do their homework can save money on their business insurance. Different agents represent different companies with loss histories that can work to your advantage. It is worth looking at more than one source for your business coverage. Just because an agent has been your agent for some time, does not mean that you should not see what others could do for you. Businesses run and meet competition to be successful. Insurance is no different and should be held to the same rules.