Posted on May 17, 2014
Once you have chosen your insurance broker or agent, it?s time to evaluate the insurance companies that they present to you for protecting your business. You can usually expect multiple programs and policies from different insurers, and they will sit down with you to discuss the highlights and features of what the commercial insurance policies cover.
In order for you to make more informed decisions about your business insurance, the following are four points to consider when choosing between insurance companies.
Evaluate Price and Coverage
Ideally, your insurance agent/broker will present a minimum of three commercial insurance quotes for your review. Because the pricing can differ between insurance companies, it is important to read through each company?s policies so that you have an understanding of what is being offered. While some companies may have a cheaper price, their coverage might not be as comprehensive as another one. You want to purchase the most insurance to fully protect your business from potential risks while at the same time meeting your budget.
Check Financial Stability & Qualifications
Insurance companies are rated based on their financial stability by two standard rating companies: Standard & Poor and A.M. Best. For commercial lines, most people review the A.M. Best rating to better understand a company?s financial qualifications. Best rates with letter grades of A through F. Anything above B+ is good with A++ being superior. The insurance industry is competitive, and companies have been known to fail. When that happens, you risk insurance claims not being paid. An insurance company should have strong financials so that you know they can fully protect and provide the coverage they are offering your business.
Review State Licensing
Admitted carriers are insurance companies licensed to do business in a state. It is always best to use a company that is licensed in your state as they must follow the rule of law when providing service to your company. Licensed insurance companies are state regulated to help protect consumers from unethical or even illegal behavior. Only in circumstances where coverage is not available should companies consider non-admitted or surplus lines carriers (those not licensed to do business in your state). Non-admitted insurers might not be licensed by the state, but that doesn?t mean they are not financially stable. They must provide financial records to the state to prove their stability.
Consider Company?s Service
Business owners should feel comfortable with the insurance company they choose. Representatives of the company should be able to promptly answer questions and then provide efficient, fair claims handling. Customer service is important to the experience of all insurance clients so checking for complaints with the state?s insurance department or Better Business Bureau is a viable way to determine whether clients are satisfied with a particular carrier. Insurance personnel should be readily available to speak with by phone should you have questions or need to file a claim.
Choosing an insurance carrier is not difficult, but it helps to understand what to look for when shopping for business insurance. Insurance brokers and agents can assist businesses in the process of determining the right type and amount of coverage to provide the insurance protection necessary so be sure to consult with an agent for recommendations.