What exactly is business insurance?
Business insurance is the deal or agreement between the business and the insurance company, in which the insurance agency agrees to provide financial protection in case of any losses that may arise in the future. Without any insurance cover, a business will be burdened to cover the losses in events such as fire, theft, and accident.
Before we get into the nitty-gritty let’s have a clear idea about the types of business insurance and what all is covered?
Types of Business insurance – small businesses should consider
- General liability insurance – It is a type of insurance that protects a business from the losses that may arise in events such as bodily injury to someone else and property damage of any other person.
- Business property insurance – It helps businesses to protect the work premises and other assets and equipments used in the business. However, it may be noted that business property insurance won’t cover the losses caused by any natural calamities such as earthquakes and floods.
- Business interruption Insurance- if your business is facing some serious problems because of an ongoing financial burden to cover property damage, this insurance will complete all your needs and lend support by paying for all your ongoing expenses such as rent, utility bills, or payroll.
- Commercial umbrella policy- Umbrella insurance policy extends coverage to some of your liability policies. So, if a claim exceeds the limits on your policy, this business owners policy insurance can help cover the difference.
- Commercial auto insurance- Business automobile insurance protects you and your employees, who use company-owned vehicles. So, in case of any road accident, it will not only cover property damage but also any bodily injury claims from an accident that your business causes.
After analyzing or evaluating business needs thoroughly a business can finally decide what kind of insurance it may require but the next biggest hurdle is to decide on the best independent insurance agency. This can be a daunting task since businesses have to select from a large pool of insurance agencies. It can be perplexing for the business person who already has a lot on his plate.
How to proceed?
There are few important things that businesses can consider before selecting any independent insurance agent.
- Licensing– Most of the insurance agents are licensed professionals. However, it is always wise to check up on whether the agent with whom you are dealing is a licensed professional. You can verify this by contacting the state insurance department.
- Credentials– Many agents and brokers will have descriptions behind their names on business cards. It will tell you about their designations and credentials earned by them from various insurance groups or associations.
- Financial strength– When evaluating a company ensure that a company has a legit financial ranking.
- Choices– One advantage of using an independent agent is that they represent a large number of companies and insurance agents representing them will present you different policies. Evaluate your needs to make sure you are getting the best option to suit your requirements.
- Honest sales- Insurance agents have the power to persuade you to buy insurance very quickly. You shouldn’t feel pressured to select an agent until you weigh all your options and select the one with the maximum pros and the least cons.
- Queries- If you have any questions about the coverage or the policy you should ask your agents to shed light on that issue. Only after you have an absolutely clear idea about the policy, terms, and conditions, you should invest in that policy.
How independent insurance agents operate?
Independent insurance agents provide numerous options to clients about insurance products like business property insurance, employment practice liability insurance, business owners policy insurance, etc. They first evaluate the needs, potential risk of a business, and the requirement of the business professional. Then they present preferable options to the business at a reasonable price. It cannot be denied that independent insurance agents provide a wide array of insurance products to the clients but the options should not be considered objective because some companies may pay high commissions to sell their insurance. Therefore, there is a tendency that agents might show biases towards the products for which lower commission is paid.
What to expect from independent insurance agents?
- Claim assistance
Services of independent insurance agencies are different from the services of insurance companies. One important difference is that they will help you file complaints. If an accident occurs, you simply have to imitate the information of the event to your agent, who will then notify your insurer. Your agent can also advocate on your behalf if problems arise. Agents are skilled in claims handling procedures; they can also access the reasonable amount to be paid in such cases.
- Risk Assessment
One exceptionally good quality of agents is the risk assessment they are very knowledgeable in this subject. By looking at the business operations they can guide you about the risks that are extremely important to the insurer and that should be prioritized. They also talk about the risks that are uninsurable because of the high costs involved in business property insurance. They also assess the risks considering the environment in which the business is working. For example, many businesses located near coastal regions are prone to floods so the agent might ask you to take that insurance as well if he/she considers it to be a major risk.
- Personalized service
Dealing with independent insurance agents helps in growing personal relationships. Over time, the agent becomes familiar with the client and his business it helps to provide personalized service. An agent may suggest changes and upgrade the client’s business property insurance policy from time to time to ensure personalized service.
Buying a business property insurance policy is not a cakewalk; various factors are weighed in before deciding on the final insurance policy. However, if a business follows the right strategies and considers all the important things mentioned above it can secure a good insurance policy. Also, businesses have the option to choose independent insurance agencies or directly from the insurance company.