Business Advice Daily

Reprint and Repost Policy

by Matt Berkley

Here’s a quick heads-up for new business owners. Deciding all the ins and outs of your business insurance policy needn’t keep you up nights. Educating yourself on the basics and finding a skilled agent will give your company the edge it needs.

Sign With An Agent You Trust. The importance of finding a good insurance agent can’t be overstated, especially one who knows your specific industry and has the experience. A quality agent will lay all the important cards on the table and guide you through murky waters. Your life as a business owner will be that much easier knowing that the right person is guarding your flank. “Make sure to get a solid, reputable agent who you know you can count on for good advice, not just at renewal time or when you initially buy the coverage, but throughout the year as questions come up,” says Pat Reilly, assistant vice president with International Placement Services, Inc., national governor elect and former president of the St. Louis CPCU chapter.

“Business insurance isn’t something to be lightly handled over the phone,” notes Brooke Miller, of Brooke Miller State Farm. “You need an agent who’ll go out and look at the business and see if there are exposures a business owner might not be aware of, things that might not be covered if they didn’t add it to their policy.”

Do Your Homework. Reilly includes the following tips for ensuring the right coverage:

* Compile a comprehensive inventory of all your businesses equipment/assets.

* Weigh what your perceived risks are.

* Consider umbrella coverage. At the least, get a quote for excess liability.

* On the general liability side, only buy limits you’re comfortable with.

You Get What You Pay For. The bottom line is always a front line concern for entrepreneurs. Typically, most business owners will gravitate towards the lowest price available in terms of coverage, notes Mike LeBlanc, owner of Mike LeBlanc Insurance. “Business owners get focused on price as opposed to value,” he says, “but there’s no doubt that cheap insurance is just that: cheap.” By talking to their agents or doing some investigating, owners can ensure proper coverage for only a few dollars more each month.

Spot New Developments. Business insurance, by nature, is a conservative industry, but that’s not to say that the terrain goes unchanged. Maybe the newest offering will match your firm perfectly. LeBlanc explains that there are coverage items now available to small firms that for many years were only available to large employers. Endorsements, such as employment practices liability that covers employee harassment suits, have come down the funnel to be priced reasonably for small businesses.

Watch Your Classification. One common misstep is failing to classify your business appropriately, says Gary Teuscher, of Weiss Insurance. This is especially prevalent with new businesses. Insurance agents either make the mistake or intentionally misclassify businesses in order to get a quick commission under their belts. The real problem occurs a few months down the line when the insurance carrier inspects the business. Once the fraudulent classification is uncovered, businesses have only 30 days to establish a new policy.

Miller has seen too many business owners take a lackadaisical approach to their insurance until, that is, they actually need it. For those new to the game, her advice is for you to ask yourself the following:

* What do you want your business policy to do for you?

* What does it need to do for you?

* What do you really need?

* Are you overlooking something you need?

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