How to Compare Small Business Insurance Quotes

In order to get good business insurance  you’ll need to compare small business insurance quotes from agents, brokers, and even online providers. This is an important process for the small business owner. There are a lot of options, and many questions to ask before you buy business insurance. It’s much more than the premiums you’ll pay.

When shopping for small business insurance, there is a lot to consider. For instance, what is your biggest business risk? When you finally do buy a policy, what are the exclusion, the limits, and your responsibilities when a claim occurs?

As you navigate this process, there are a few questions you should ask yourself before you buy. When you compare small business insurance quotes, get answers to these questions before you buy:

Is this a stable and trusted insurance carrier?

The insurance company you ultimately select can make a big difference in your overall claims and service experience. To help make sure you have the coverage you need, when you need it, get quotes from dependable insurance carriers. The last thing you need is to discover your policy doesn’t cover the claims you file. Even worse, you don’t want to discover they don’t even have the financial strength to pay your claims. 

The first thing you should do is check the financial strength and overall outlook of the insurance carriers you’re considering. There are tools to help you do this. In fact, you can check the financial strength and rating of any insurance company at AMBest. Avoid companies that aren’t A-rated or higher.

Additionally, if you’re business is in a high-risk sector. You may discover that the most familiar insurance carriers don’t offer coverage. This will mean shopping through a Managing General Agent. If this is the case, you will also want to check the reputation of the General Agent and the third-party administrator used to handle claims.

Another consideration is who you shop with. You should only shop with reputable outlets or insurance agencies. If you elect to shop with a local or online insurance agency, you should understand their experience and if they have direct access to the insurance carriers they quote. For instance, IronPoint has direct appointments with several A and +A-rated insurance carriers, like Travelers, The Hartford, Nationwide, Berkshire Hathaway GUARD, and AmTrust. However, other insurance agents utilize third-party brokers, aggregators, or general agents to quote you with the various carriers. 

Is that premium too good to be true?

Small business owners are always working to improve their bottom line and manage their budgets. We get it. However, insurance is one of those things that you can’t simply buy because it’s cheap. It’s equally important to choose the right protection — at the right premium of course. What you’re seeking out is value.

When shopping for business insurance, remember you’re purchasing protection to reduce the risk of financial loss. Getting the right policy to transfer certain financial risks is an important choice. So, before you simply select the lowest premium, ask yourself why is that premium lower.

Typically, there are two reasons a policy’s premium is lower. First, between comparable insurance carriers, one of them simply has a better loss experience and can offer a lower premium for your class of business. The second is that the insurance carrier is offering less coverage in the body of the policy, and therefore is accepting less risk – this allows them to lower the premium. 

You want to select a quality carrier who simply has a better loss experience history. This allows you to have quality coverage at a good premium. You don’t want to fall into the second category. If the company reduced coverage to offer a lower premium, you may find yourself without coverage when you need it most.

Of course, it’s a smart idea to keep your premium costs under control. Without compromising coverage, you want to look to bundle your insurance in a business owner’s policy, possibly select higher deductibles, or implement a safety program that gets you a credit or discount.

Have you selected the correct limits?

The policy limits you select as well as your deductibles are extremely important. They represent the maximum amounts your insurance carrier will pay when you have a covered claim.

Remember, You select the limits and deductibles, so pay special care. The limits you select should represent an amount that is adequate to protect your business from financial catastrophe should it be presented with claims or lawsuits for liability. For your business property, it should be an amount sufficient to replace your buildings, furnishings, equipment, and inventory.

Along with your policy liability limits, you will also select a property deductible. The policy deductible is the amount of the claim that you pay out of pocket for a covered property claim. This is often paid before the insurance carrier pays a claim. Generally, if you elect a higher  deductible, you will pay less in premiums. However, it’s important to select a reasonable deductible. You don’t want to select a deductible value beyond your budget. Choose a value you know you can afford any given month.

What are the policy exclusions?

Not all business insurance carriers offer the same coverage. In fact, business insurance coverage can vary significantly between insurance companies. Don’t assume that coverage you had with one carrier will automatically be included in a new policy. Before you purchase a replacement policy, review the coverage options carefully.

Generally speaking, insurance policies make broad insuring agreements, then narrow that protection with exclusions, definitions, and policy language. These are all spelled out in the policy. You should understand what is covered and any relevant exclusions. Note: good companies do this to remove ambiguity, and others do it to reduce coverage and costs.

For example, if you’re buying commercial auto insurance , you’ll want to compare the bodily injury, property damage, and uninsured motorist coverage limits. Moreover, you should know your collision and comprehensive coverage deductibles. Does the replacement commercial auto quote have uninsured motorist coverage, medical payments, or personal injury protection?

Regardless of the coverage you’re quoting, don’t assume that the coverage provided for every quote is the same. Sometimes you trade coverage or protection for lower premiums. The last thing you need is to buy a policy, only to find out later that it doesn’t have the protection you require.

How does the quote compare to the current policy?

If you already have business insurance, then use those policies as a benchmark when you compare small business insurance quotes. You have experience now, so consider what was working and what wasn’t with your current coverage. What’s missing?

When you shop for new business insurance, it shouldn’t just be to save money. You also want to fill any coverage gaps you currently have.

Consider your current coverage as a guide. It can help you assess coverage gaps, define a roadmap for your baseline protection, and offers you the ability to define your gaps. It also helps measure value, will you get more protection for the same or less premium?

If you’re just getting started, consult someone in your business segment you trust, and ask them about their experience and recommendations before you begin the process.

Who will help you compare small business quotes?

This is more important than you might think. Not all companies or insurance agents are the same. For example, you may need to move quickly. This makes where you shop even more important.

Where you elect to shop for business insurance can impact how quickly you’ll get coverage. For instance, if you select a broker or insurance agent who doesn’t have a direct appointment with the right insurance carriers, you may suffer delays. These types of agents need to submit your request to a third party, who then submits it to the insurance carrier. This will take time. If you need coverage to sign a lease or land a big client or contract, this won’t work.

If you need coverage quickly, confirm with your agent or your carrier what their turnaround times are for policy issuance. In some cases, like with IronPoint, you can take the initiative and complete your request online and jump-start the process.

Are you using a business insurance specialist?

Some lines of business are easier to do online. For instance, personal auto insurance is a very automated coverage and lends itself to online quotes and binding. However, business insurance requires a more thoughtful approach. There’s more at risk. Therefore, it’s highly recommended that you seek out the assistance of a business insurance agent. They can help you identify your biggest insurance needs, make sound decisions, and guide you through the comparison process.

In fact, an independent insurance agent can represent several insurance carriers and are the original source of comparison insurance shopping. Working with an independent insurance agent is a great place to start.

Online quotes are a giant leap in business insurance quotes. They provide useful information that can be used to compare pricing. However, online quotes are merely an estimate based on consumer inputs. Before they can be finalized, quotes typically need to be reviewed by an agent or underwriter. This is why working with an agent is optimal. Agents can help you understand the process, answer questions, clarify language, and make recommendations. In some instances, they have discretionary credits that can be used to discount premiums.

The bottom line

When you shop for insurance, and you want to compare small business insurance quotes, it’s going to be a process. Seek out an agent who you can trust. In most cases, a good independent insurance agent with relevant business insurance will be the best way to shop the market for the best option. If you’re not sure who to select, please feel free to call us at (877) 334-7646 or start a quote online and we can help do the rest.