Shopping for Small Business Insurance¹
Although most small business owners agree that having insurance is important for their company, that doesn’t mean they enjoy shopping for it. The different forms of coverage can be complicated to understand. With all of the confusing policy terms, it's little wonder most business owners would rather spend time doing just about anything else rather than comparing insurance policies.
Fortunately, there's help available to streamline the insurance research and purchasing process. Retaining an effective agent or broker can be an important first step in helping your small business meet its insurance and risk management needs while reducing potential headaches. A good insurance agent can help you evaluate potential insurance choices and provide advice about making the best choice for your company and its needs.
The right insurance agent or broker will be able to help your company in a variety of ways beyond merely placing insurance coverage. A good agent will understand your company's and industry's risks, and provide valuable risk management advice to help your company reduce the potential for accidents or losses. Your agent can also help you plan ways to reduce the severity of any losses that do occur.
If you're going to work with an insurance agent or broker, how do you find a good one? You can start by talking to the professionals who are already serving your company. For example, your banker or financial advisor may also be able to recommend insurance professionals and provide advice about which companies are likely to be more expensive or easier to work with.
Insurance agents fall into two broad camps - independent agents, who represent a variety of insurance companies, and agents who are affiliated with specific carriers.
In either case, insurance agents represent insurance companies, and their duty to their customers is primarily to streamline the customer's dealings with the insurance company.
An insurance broker, by comparison, officially represents your company, and will generally offer a broader range of insurance and risk management services than an agent. If your business has simple requirements, you may be better served with an agent than a broker, but if you have complex requirements, a broker may be a better choice.
Either way, it's important to speak with both types of professionals to understand your options and get a better sense of who might be a better of your company's needs.
The right insurance professional can be a valuable resource who plays an important role in protecting the financial health of your company, so it’s important to invest time in researching this relationship before you purchase insurance.