Small Business Insurance Brokers – What to Look For
If you have a small business, you may not have considered the idea of small business insurance. If not, you might want to take a moment to reconsider. If you have thought about it or have just learned the benefits, you may be wondering what to do next. Keep reading and find out how you can find the right small business insurance policy for your needs.
Why Small Businesses Need Insurance?
Whether you run a small corner café or you’re a freelancing web designer, you need small business liability insurance. In today’s world, people are ready and willing to sue over almost anything. And unfortunately, no matter how hard you try, mistakes will happen. You can’t be everywhere at once, you can’t be perfect and you most certainly cannot avoid mistakes along the way.
Without coverage, you can face the astronomical costs of legal fee representations. You may also be responsible for damages awarded to the client, customer or business that you provided services, products or advice to. If, however, you have small business insurance, these fees will be paid for by your insurance company, as long as you continue to pay your premiums while you are in business.
What is a Small Business Insurance Broker?
So now that you understand why small business liability insurance is so important, it is time to learn how to obtain a policy and what to look for in a small business insurance broker. Like brokers with other types of insurance, small business insurance brokers work with several different insurance companies. They research various polices for you and let you know what each company has to offer.
Benefits of Using a Small Business Insurance Broker Over a Business Insurance Company
While it is true that you can contact various businesses on your own and request policy quotes, there are many benefits to using a small business insurance broker. These benefits should not be overlooked and understanding them can help you determine if, in fact, a broker is the right solution for your insurance needs.
- A broker can help ensure that you are meeting all legal state and local requirements in your business.
- A broker can obtain several quotes in a matter of minutes.
- A broker may be more apt to explain the specifics of a policy to you than an insurance company.
- A broker can be a one-stop-shop for all of your business insurance needs.
When is a Broker Not Right for Your Businesses?
While a small business insurance broker is perfect for many small businesses, there may be some instances in which a broker and their fees are not considered a prudent business decision. Generally, this applies to businesses that are extremely small. In this case, an agent may be able to best assist you with your insurance needs.
Where to Look for a Small Business Insurance Broker?
There are many ways to find a small business insurance broker. You can contact your local Chamber of Commerce and ask for referrals to local small business insurance brokers. You can talk to other local businesses and ask them if they used a broker to purchase their small business insurance policy. You can look in the phone book or online as well, but using referrals is generally the preferred method because you are making your broker choices based upon real customer experience.
Finding the Right Small Business Insurance Broker?
Unfortunately, the insurance brokerage business has a few lemons in it, just like all businesses. To protect yourself from these brokers, know what it is that you need to look for in a broker:
- Ask all brokers for references from other small businesses that they have worked with.
- Contact the local licensing agency. All brokers are required to maintain licenses.
- Ask the state agency for a complaints record. While they may not always have one, it is worth checking into.
- Check the Better Business Bureau for complaints.
- Interview the agent before purchasing a policy. If you ever feel suspicious or uneasy for reasons that you can’t explain, go with your gut and find another agent.
- Test your broker to see how long it takes them to return your calls.
Making Changes to Your Policy
Once you have obtained your policy, you are good to go. However, as time goes on, your business will change and grow. As such, your insurance policy should change and grow. When it is time to make changes, it is important that you realize that your broker is your point of contact. They must approve and discuss all changes to your policy with you and with the insurance company that has issued the policy. Contacting the insurance company directly will only leave you frustrated so save yourself some headache and contact the broker directly for all changes needed for your small business insurance policy.
About the Author: My name is Mary G. Watson. I am a freelancer writer for www.liabilityinsurance.org. I am 33 years old and I have 2 sons. I used to work at a car company in New York as a car insurance agent. I usually write all about insurance. My topics are not only about cars but about business and others.
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Ensure Your Business Has The Right Type of Insurance
Do you have the correct types and amounts of insurance coverage for your business?
Most people understand that they need to purchase coverage for their personal vehicles and the homes they live in, yet many business owners don’t consider that coverage for their business is just as important.
No matter the size of your business, you need to consider purchasing commercial insurance coverage. A basic commercial policy is the very least amount of protection any business needs, with additional coverages being required depending on factors such as what your business does and if you have employees.
Primary Coverage
Just about every business in existence should consider, at the very least, carrying basic insurance coverage. Your primary business coverage will consist of a basic liability policy and a property policy. Often times, you can get these two coverages combined in what is called a business owners policy.
Depending on the amount of property your business owns, you may need additional property coverage. For example, if you have a business building, then you will need a policy that specifically covers this structure. You will also need to make sure your property policy provides coverage for your business computers, equipment, furnishings, etc.
Liability coverage is also something you will need. A basic liability policy should cover basic liability issues, such as if a visitor gets injured on your business premises. There may also be specialized liability insurance policies to consider, depending on what your business does and the exposure it faces.
Specialized Liability Coverage
Your business may need liability insurance coverage that goes beyond the basic coverage. For example, if your company owns or operates vehicles, you will need a commercial auto policy. This type of coverage provides protection for vehicles used for business purposes, something that a traditional auto policy does not offer.
If you have employees, you most likely will need to have a workers compensation insurance policy. Each state has their own requirements, but typically you will need this coverage if you employee a certain number of people. Also known as workers comp, this coverage guarantees employees have access to timely medical care if they are injured while performing their job duties.
If your company provides professional services, in which an error or omission on the part of your company may result in monetary damages to the client, then you should consider errors and omissions insurance. Companies that have employees going into the customer’s home should consider getting a fidelity bond, which is also called an employee dishonesty bond and provides coverage in the case of employee theft.
There are several other specialized insurance coverages that may be something your business should consider. Consult with a licensed business insurance agent to explore your coverage options.
Carry The Right Policy Limits
Having business insurance is one thing – having the right coverage limits is another. An insurance policy does you no good if the policy limits (the amount it will pay out) are below the amount your company could be liable for.
Check with a licensed insurance agent, as well as your accountant, to see what your business policy limits should be. Having the right combination of insurance types and policy limits helps ensure that your company is properly protected against potential liability exposure.
While many business owners may consider business insurance a luxury, you don’t want to find yourself in a situation where you don’t have the right type, or amount, of business insurance. Spend a little now so that your company is not faced with a situation that could potentially result in financial ruin.
About the Author: Marshall Davis runs Insurance Quotes Kingdom, a website that shows you where you can compare insurance quotes for free. If you have a business, then you really need to ensure you have the necessary insurance coverage – just in case.
Photo Credit: ashleigh290
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