Cost-cutting has become a national passion, and it’s tempting if you’re a small business person, especially a sole proprietor, to skimp on expenses, like business insurance coverage. But doing so could end up costing you a lot more than you save. Price is an important factor, but there are other considerations that are equally important when you shop for small business insurance.
1. Do Your Research
Financial scandals involving some of the world’s most respected companies have rocked the economy in recent years. Nobody can guarantee that the business insurance company you select won’t come up short, but you can take steps to lessen the chances when you shop for small business insurance policy.
It’s fairly easy to get a profile online for any insurance company that includes its credit rating, history and other critical statistics that provide an indication of its financial stability overtime. A.M. Best specializes in rating insurance companies, but other companies such as Standard & Poor’s and Moody’s also provide this type of information. Basic profiles are usually free.
You should also check with your state’s insurance regulatory agency to learn if insurers you’re considering are registered in your state. Also, check state minimum requirement of small business premiums.
2. Check Out the Services
Shopping for insurance online and automatic paperless payments are great conveniences. But when you have a question or a claim, you’ll want to talk to a real person, real fast. The more points of contact – 24-hour toll-free phone to the company, direct phone to your agent, email, fax, text messaging – the better. Before you buy, find out the insurer’s policy on service and claims handling.
While you’re at it, ask who will represent you if you are sued. Will the insurer reimburse you for hiring your own counsel, or designate counsel?
3. Get More Than One Quote
Price isn’t everything, but it is important. That’s why you should get at least three quotes for comparable, apples-to-apples coverage. With online quotes for small business insurance, that’s never been easier to do. Once you have your quotes, you can weigh the other factors – history, financial stability, credibility, services – and choose the insurer that best meets your budget and your comfort level.