There are a lot of small businesses opening and shutting down every day. In 2022, there were 33.2 million small businesses in the United States, representing 99.9 percent of all US firms.
When it comes to insurance for your small business, the choices can be overwhelming. With so many types of coverage, policy options, and carriers, it’s essential to find an agency to help you find the best solution. But how do you know if an agency is right for your company? Here are some things to consider when selecting an insurance company or agent:
Licensing
Licensing is a requirement for insurance agents, though it varies by state. Some states require licensing for all agents, some only for certain types of insurance, and some require licenses from both the agent and the company he or she represents.
When buying insurance, you should buy from a company licensed in your state since this makes it easier for you to get help from your state’s insurance department if there is a problem. For instance, if you’re located in Dublin, you’re better off buying insurance from a local insurer. Although teleservices enable services from anyone worldwide, it is best to go for a local hire. Considering the example above, an insurer from London won’t know Dublin-based companies’ local needs and claims if you are in Dublin. In such a scenario, it is best to go for an insurance agency in Dublin, Ohio.
All the licensing rules exist to ensure customer protection. They help protect you from fraudsters who might try selling you something that isn’t right for your business. Hence, finding out if the insurer is licensed or not should be your prime concern,
Independent Agent Vs. Insurance Company
Independent agents are independent contractors. They are not insurance company employees and have a business relationship with the insurance company and their clients. They receive commissions from the insurance company for selling policies.
An agent’s success comes from how well they meet their client’s needs, which means they must understand what you want and need in your policy and be knowledgeable about your industry and risk exposure. Independent agents have contracts with multiple insurance companies, giving them a greater variety of coverage options to offer you.
Price
When it comes to pricing, there are many things to consider. For example, some insurance companies offer a discount for bundling several policies. The more policies you bundle together, the lower your premium can be. The median annual cost of a general liability policy was $500 in 2021. However, bundling can bring down prices by up to 25%.
Another thing that affects the price is whether or not your policy includes any coverage limits on certain items or whether they require you to purchase additional liability coverage in case someone brings suit against your company due to an injury caused by one of your products/services in question. These factors can make all the difference when searching for affordable rates on insurance policies explicitly tailored towards small businesses like yours because every policy varies slightly depending on what kind of business practices are used within each industry sector overall.
Discounts
Discounts are one of the most significant points of contention regarding insurance. Customers tend to think that discounts are the best deals, but they can be more expensive than paying full price for certain policies.
According to data, 40% of small businesses do not have an insurance policy. When asked, many respondents said that they don’t have insurance because it costs high. This is likely due to the companies not considering the associated cost affordable.
Discounts aren’t always available. You might have heard that some insurers offer discounts if you pay your premium in full during a certain period (usually in January) or if you sign up for multiple years at once—but these discounts don’t come around every year. They may not even be offered by your chosen provider.
Discounts can also change over time depending on what’s going on in an area or industry at any given moment. For example, an insurer may offer a discount on home insurance if someone has installed a fire alarm system; however, after several fires occur in a neighborhood with no fire alarms installed (or with other issues), insurers will remove those discounts from their policies until things get safer again—which means that customers who took advantage of them could end up paying more than expected later down the road!
Coverage
Coverage is a top priority when choosing an insurance agency. When you’re first starting, you may need to have a lot of coverage in place to make sure your business is covered. As your business grows and develops, however, it’s essential that your insurance agency can change with the needs of your business.
Businesses are increasingly seeking flexible insurance plans that will allow them to optimize their coverage. You’ll want to ensure that the coverage you choose will be appropriate for now and in the future. And don’t forget about changing needs—if you’re opening an office and hiring new staff members or expanding into new offices in other states or countries (or if any significant event happens), it’s vital that these changes are reflected in any changes made to your policy as well!
Financial Strength
You should also consider the financial strength of your insurance company. You want to ensure that your insurance company has enough money to pay claims and keep its doors open in the event of a catastrophe. Here are some things you should look at:
- How long have they been in business?
- Do they have experience handling claims?
- How often do they pay out on claims?
- What is their reputation for prompt payment of claims, premiums, and other benefits (like policy extensions)?
Company Reputation
Company reputation is important for a variety of reasons. It can be challenging to determine the reputation of an insurance agency because you don’t have access to its internal operations. But there are some things you can do to get a sense of how well-regarded the company is by others in your industry and community.
Company reputation impacts brand loyalty. Suppose customers feel good about doing business with a company. In that case, they are likely to stick around and become repeat customers rather than looking elsewhere when they need more services or products in the future.
Almost 7 million small businesses depend on commercial insurance to protect their assets. Talking to other customers who have used a particular company or agent will help you determine whether it is the right choice for you. You can also check a national claims database to see if the company has any complaints on file.
Conclusion
Insurance can seem like a complicated topic, but it doesn’t have to be. When you know what questions to ask and how to evaluate the answers given, it becomes much more straightforward. Consider the factors mentioned in this article to find the right insurance agency for your business.
