Choosing the Right Business Insurance Agent and Insurance
January, 2011 Issue
Your business' success could depend on choosing the right type of insurance coverage—and getting help from the right insurance agent.
There are a lot of options for business insurance. To ensure you get the right kind, it’s a smart move to ask for assistance from a business insurance agent. Don’t choose someone who’s simply selling business insurance or promoting certain companies. Instead, choose someone who can assist you all the way from choosing the right coverage to making claims. In general, business insurance is a long process, and getting the right agent is a critical component.
There are two types of business insurance agents. One is independent and one is exclusive to a particular company. The independent agent is a multiple carrier agent who can determine which providers can best suit your needs. Independent agents aren’t affiliated with one particular insurance company, but instead work with many.
Both types are expected to be well-versed about the insurance industry, how insurance works, and types of insurance that suit your needs. But independent agents can give you options on different insurance providers, while exclusive agents present you with what their affiliated company offers.
If you’re looking for more options in terms of several insurance providers and different rates, you can go for the independent agent. But if you’ve done your own research and want to know more about the company you chose, you’ll have to talk to its exclusive agent.
There are many ways to look for business insurance agents. One way is to look online. When you do so, be sure to check their customer comments and reviews, so you can get a feel for their reliability and level of professionalism. While online, you can also immediately get business insurance quotes from various providers and compare the rates. Aside from online searching, you can also look for your business insurance provider by your local directory (such as this resource guide) or through referrals from your personal contacts.
Types of insurance
Once you’ve chosen a provider, it will be time to consider your specific insurance needs. Without proper protection, misfortunes such as the death of a partner or key employee, embezzlement, a lawsuit, or a natural disaster could spell the end of a thriving operation.
Ranging from indispensable workers’ compensation insurance to the relatively obscure executive kidnapping coverage, insurance is available for nearly any business risk. Considering the multitude of available options, business owners must carefully weigh whether the cost of certain premiums will justify the coverage for a given risk.
General liability. Many business owners buy general liability or umbrella liability insurance to cover legal hassles due to negligence claims. These help protect against payments as the result of bodily injury or property damage, medical expenses, the cost of defending lawsuits, and settlement bonds or judgments required during an appeal procedure.
Product liability. Every product is capable of personal injury or property damage. Companies that manufacture, wholesale, distribute and retail a product may be liable for its safety. Additionally, every service rendered may be capable of personal injury or property damage. Businesses are considered liable for negligence, breach of an express or implied warranty, defective products and defective warnings or instructions.
Home-based business insurance. Contrary to popular belief, homeowners’ insurance policies don’t generally cover home-based business losses. Commonly needed insurance areas for home-based businesses include business property, professional liability, personal and advertising injury, loss of business data, crime and theft, and disability.
Internet business insurance. Web-based businesses may wish to look into specialized insurance that covers liability for damage done by hackers and viruses. In addition, e-insurance often covers specialized online activities, including lawsuits resulting from meta tag abuse, banner advertising or electronic copyright infringement.
Workers’ compensation. Workers’ compensation insurance pays for employees’ medical expenses and missed wages if injured while working. The amount of insurance employers must carry, rate of payment, and what types of employees must be carried varies.
Criminal insurance. No matter how tight security is in your workplace, theft and malicious damage are always possibilities. While the dangers associated with hacking, vandalism and general theft are obvious, employee embezzlement is more common than most business owners think. Criminal insurance and employee bonds can provide protection against losses in most criminal areas.
Business interruption insurance. Some businesses may wish to acquire insurance that covers losses during natural disasters, fires and other catastrophes that may cause the operation to shut down for a significant amount of time.
Key person insurance. In addition to a business continuation plan that outlines how the company will maintain operations if a key person dies, falls ill or leaves, some companies may wish to buy key person insurance. This type of coverage is usually life insurance that names the corporation as a beneficiary if an essential person dies or is disabled.
Malpractice insurance. Some licensed professionals need protection against payments as the result of bodily injury or property damage, medical expenses, the cost of defending lawsuits, investigations and settlements, and bonds or judgments required during an appeal procedure.
Source: U.S. Small Business Administration (for types of insurance section)
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