How To Compare Your Small Business Insurance Options
Shopping for insurance can feel like a full-time job on top of your full-time job—especially if you’re not sure what to look for. But if you want coverage when it matters most, take the time to compare your small business insurance options before jumping into a purchase.
If you don’t know where to start, read our guide to learn:
Questions To Ask When Buying Business Insurance
Before comparing small business insurance, you need to know what you’re shopping for. Here are a few questions to help you narrow down the search:
What Are My Risks?
Small business insurance covers risks that could affect your company’s future. These risks can include client lawsuits, natural disasters, cyberattacks, and car accidents, to name a few. Your risks will depend on your company’s size, industry, and operations.
While some risks may be obvious, there are many hidden hazards you might not think of. To avoid coverage gaps when comparing small business insurance, you should work with a reputable insurance agency to create an exhaustive list of risks.
What Policies Do I Need?
Once you know your risks, you can identify the policies you need to cover them. These may include:
- General liability insurance
- Commercial property insurance
- Business income insurance
- Commercial auto insurance
- Professional liability insurance
- Workers’ compensation insurance
- Cyber liability insurance
- Umbrella insurance
- Directors and officers insurance
- Employment practices liability insurance (EPLI)
You may also be able to combine some of the above coverages in a business owner’s policy to cover your most significant risks in one place.
Looking for a more in-depth explanation of the different types of small business insurance? Get the answers you need in our small business insurance FAQ.
What Coverages Are Required?
Insurance policies don’t just protect your financial future; they can also help you comply with local and federal laws, contracts, and client agreements. Depending on your company’s location and contractual obligations, you may be required to buy some or all of these coverages:
- Workers’ compensation: Nearly every state requires workers’ compensation coverage for companies with more than a few employees.
- Auto: Most states require individuals and businesses to have auto insurance. Check your state’s requirements to learn what limits you need.
- General liability: Before you sign a contract with a client, you may be required to show proof of general liability insurance.
- Property: You may need property insurance to get a loan for your facility or equipment.
- Professional liability: To get licensed as a doctor or lawyer in your state, you may need to provide proof of professional liability insurance.
What Limits Do I Need?
You should look at more than price when comparing small business insurance options. One policy might be more expensive because it has higher limits—and you may need that additional coverage to protect your business. Carefully consider how much a claim could cost before deciding on limit amounts.
Factors To Consider When Choosing an Insurance Company
When you compare small business insurance quotes, you aren’t just weighing premiums, coverage limits, and exclusions—you’re also comparing the companies that provided them. Here are a few factors to consider when deciding which insurance carrier to choose.
Before buying a policy, you should check to ensure your potential insurer is licensed in your state. Each state has a regulatory agency for insurance, and they can step in to help if you have issues with a licensed insurance company.
Independent financial rating systems like AM Best can help you assess if your potential insurer can meet their financial obligations.
Chances are, you’ll have to file a claim at least once. When that happens, you want the process to go as smoothly as possible. To get an idea of how the claims process works, do some research and ask other small business owners about their experience.
Each insurance company charges different premiums for its policies. If you’re choosing between several highly rated insurers with a reputation for professional service, see which one offers your desired coverage for the lowest price.
What To Look for During a Business Insurance Price Comparison
You may be tempted to skip to the total premium amount when comparing small business insurance pricing, but you also need to consider what you’re paying for. The factors that affect your total premium amount include:
- Limits: The higher your policy limits, the more you’ll pay. Make sure each quote has the same limit before comparing prices.
- Deductibles: High deductible amounts typically lower your insurance costs. If you don’t want to pay a large upfront amount during a claim, look for a quote with a lower deductible—even if that means a higher premium.
- Coverages: Two quotes might cost the same amount, but one may offer better coverage. Read through each quote carefully to see if one provides coverage for a claim others exclude.
- Exclusions: Some insurers deny certain loss events you may encounter. Make sure the quote you choose doesn’t exclude a significant risk.
Partner With an Agency To Shop for Business Insurance
If you’re in the market for small business insurance, working with an independent agency like Southpoint Insurance is the best way to make sure you’re getting good value for your money.
Our insurance experts help you identify your risks, policy needs, and insurance requirements. From there, we use our long-term relationships with the most highly rated insurance companies to negotiate competitive rates and get you more coverage for your money. When it’s time to compare those small business insurance quotes and choose a policy, we clearly explain the pros and cons of each and guide you towards the best decision.
Get in touch to learn more about our process or speak with an expert to compare small business insurance options.