Choosing the right insurance company for your business can be more complex than is readily apparent. For example, the lowest price may not be the best value. As insurance agents we understand that the price of a policy is important however, so is financial stability, service and reputation. We recommend looking for financially strong companies that can offer products that meet your needs at a competitive price.
When purchasing a policy based on price alone, you could suffer consequences ranging from unpaid claims due to poor service to insolvent carriers resulting from under-pricing.
When considering the best policy for you, consider the following:
Type of Product: The type of policies purchased by most business entities include but are not limited to property, general liability, umbrella and director & officers (D&O).
(Workers Comp and Commercial Auto will be discussed in a future article)
When shopping for insurance coverage, be ready to provide information about the type of company you need insurance for along with any questions you may have so that your insurance agent can guide you in making an informed decision on your coverage options.
Price: Premiums paid for any insurance policy is an important consideration. When business owners have been surveyed, over 50% felt it was "very important". Like any other purchase, price is relevant to value.
Variables that influence the cost of an insurance policy include liability limits, deductibles, where the insured property is located, characteristics of the property, type of business...the list goes on.
Every company applies their underwriting and pricing criteria based on these factors, with premiums varying from insurer to insurer. When your agent provides you quotes, they'll offer an explanation of the price differences.
Service & Reputation: A reputation for good customer service, efficient and friendly claims management and the ease of doing business with often ranks toward the top of the list when shopping for insurance. When it comes to claim response, insureds are looking for fairness, speed of response and speed of payment.
Industry Expertise: Your agent will place you with a company that specializes in your industry. Choosing a company that is inexperienced could negatively impact your coverage and service.
Licensing: Not all insurance companies are licensed to write coverage in every state. Your agent will recommend an "admitted carrier" for your state. This means that the company is licensed and regulated by the state. When coverage is difficult to find, your agent will work with insurers that write surplus lines. Surplus lines are written by "non-admitted" carriers. They are not licensed to write coverage in the state but can write coverage for policies that most admitted carriers will not cover. It is important to note that these carriers are unregulated by the state, freeing the insurer of any premium and policy form regulations.
The process of purchasing insurance for your business can be long and at times feel complicated.
Look for an agent who has the experience and expertise to guide you in making the right decision on your insurance coverage.
Drexal Harris has been a licensed insurance agent in Florida for over 40 years. His agency, Baker-Harris Insurance is one of the oldest in Tallahassee specializing in all forms of insurance.
Information for the above article was provided by Zurichna.com and naic.org