Unless your buddy who sells insurance has experience selling business insurance, works for a major insurance firm, and has insured businesses like yours before, it’s best to look elsewhere.
Shop AroundThere is no one sized fits all package for business insurance. Because of this the quote you get for your business can differ substantially from one insurance company to another.
In short, it pays to shop around. We recommend starting with the online service TechInsurance.com which allows several large insurers to compete for your business, and have agents standing buy ready to talk to you.
Once you have the lowest rate from that source, then go and talk to a local insurance agent, have them review the policy and see if they can beat it. If they can, without sacrificing the quality of the policy, then go with them. If not then go with the techinsurance provided option.
Some of the largest providers in the business insurance space who likely have agents in your area are Allstate, Hartford Financial Group, Travelers, and Liberty Mutual.
Questions To Ask When Buying InsuranceAsk Yourself: What harm could your product or service cause?
There are going to be obvious things that you want coverage for depending on the business. What have other businesses like yours been sued for in the past? Make a list of those things, and make sure you understand how it would be handled if you ever needed to make a claim.
Ask your agent to describe what coverage you need?
You want to make sure that you are working with an agent that has experience specific to your business. A good way of determining this is to ask them to describe the type of coverage they think you need.
Agents who have worked with businesses like yours should have no problem giving you a detailed explanation, in laymen’s terms, of the unique risks of your business. If they can’t then look somewhere else.
What are the deductibles?
An insurance deductible is the amount that you have to pay before your insurance kicks in. As an example let’s say you have $500K in general liability insurance with a $1000 deductible. Someone slips in your store and sues you. You have to pay the the first $1000 in costs related to the lawsuit. After that the insurance company pays up to $500K in additional costs.
What are the coverage limits?
In the above example $500K is the coverage limit.
Ask how specific claims are handled?
If you are sued does the policy pay for your legal defense? Do legal costs count against your level of coverage? Under what circumstances are you not covered?