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How to Choose an Insurer for Your Small Business

There are near-countless insurers offering commercial insurance. While this is great news because of the freedom it gives you in choosing the right company for your business, it also makes choosing itself more difficult.

So how do you know which insurance company fits your needs the most?

Fiscal Security

Evaluating an insurance company’s financial health is relatively simple, considering that rating agencies (A.M. Best, Moody’s, etc.) already do this for you. Remember though that every company uses its own criteria and ratings, so it’s wise to look into ratings from different agencies when reviewing insurers.

State License

Insurance providers have to be licensed in every state where they operate, except when they are non-admitted or surplus/excess line insurers (these companies provide coverage for unusual, highly specialized risks). Take note that state regulators may require a different license for every type of coverage they provide.

Product Distribution

Insurance companies can use different ways of selling their products. For example, they may sell through independent agents or captive agents, directly to customers, or both methods combined. When choosing an insurer, consider which one you prefer. Would you rather buy your insurance yourself, do you to be fully assisted by an agent, or do you want a bit of both?

Customer Service

Customer service is quite simply the efficiency of the insurer in dealing with customers and the courtesy they extend in the process. We all know that different companies, insurance-related or not, provide varying qualities of customer service. If you are working with an independent agent, they should be able to provide information as to how each insurer fares in this department. You can also talk to your business associates and ask for recommendations. Better yet, approach trade associations, business groups and professional organizations to ask for their own recommendations.

Claim-Handling Reputation

Aside from customer service, claims handling is another crucial factor to consider when it comes to the reputation of an insurance company. Again, if you’re working with an independent agent, ask them how the insurance companies you’re considering are doing in this area. You should also do your own research, which is very easy to do online these days. Check out websites that feature insurer reviews, but make it a point to choose only reputable ones as there are lots of fake information on the Internet today.

Coverage

The coverage you need clearly depends on the type of business you have as well as its size. Some insurance companies will give you no more than “vanilla” coverage, or coverage that is considered basic, such as general liability and commercial vehicle insurance. Others can provide more detailed coverage, such as protection for restaurant equipment or confidential electronic data. In any case, choose a company that specializes in the type and depth of coverage you need.

Cost

There are several issues that can have an impact on how much a policy’s premium will be. For example, these may include the charges, coverage limits, discounts, the age of your business, security measures you’re taking to secure it, and so forth and so on. When comparing different quotes from different companies, make sure you’re doing it apples to apples. Otherwise, the comparisons will not help and may even lead you to make the decisions that will bring you and your business more harm than good.

Total Satisfaction

Finally, spend time learning how satisfied your potential insurers’ existing clients are in terms of the coverage and services they receive. You can check out satisfaction reports created by certain research companies, or again, you can read online customer reviews. As long as you choose your sources, you should be reading objective, reliable testimonials that can help you make the right choice of a business insurer.

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