How to Compare Small Business Insurance

Small businesses are prone to several risks such as threat of competition, market penetration and workforce reduction. Many small businesses close due to events and hazards, as they do not have adequate coverage on some high risks. All assets from your office, including vehicles, need to be sufficiently insured. Small businesses should consider all available options in the market before signing up with an insurance company. Consider comparison of small business insurance plans.

Difficulty: Moderately Easy

Instructions

Checklist

1. Make a list of your real and immovable assets from office, equipment, inventory and other valuables that help you run your business.

2. Assign a value to each of your assets based on replacement costs. Call a local insurance agent to help you assess your insurance needs.

3. Consult your legal advisor and get more information on your insurance needs. You should be able to decide what kind of coverage you need and for how much.

4. Get quotes from different insurance providers over the phone or from company Web sites.

5. Answer simple questions from each of the companies to begin comparing.

Comparison

6. Study quotes for disability insurance. This coverage is absolutely mandatory as your entrepreneurial ventures may halt in the first year due to personal health hazards. Moreover, getting business insurance for self-employed persons is very difficult.

7. Choose a variety of options when it comes to comparing the coverage. Small businesses qualify for insurance from disability, life, critical illness, partnership, product service liability, business premises and so on. You may choose all types or a single insurance policy that covers all of the above.

8. Compare plans based on the limits they provide on each coverage and claim deductibles.

9. Check the reputation of the company while comparing. You can get ratings on several Web sites. Rating companies such as A.M. Best, S & P (Standards & Poor’s) and Fitch provide ratings and analysis of insurance companies and provide detailed information about company strengths and weaknesses, coverage options and claims handling.

10. Compare reviews of customers and policy holders at J.D. Power and Associates (see Resources below). Go through the reviews posted by policyholders and customers of this company. Find out whether the customers are satisfied with the company and its services or not.

Tips & Warnings

• Getting membership of some association or organization which endorses professionals can save you money on insurance, as you qualify for group insurance.
• Don’t forget to compare the most critical aspects: quality of service and price at which it is offered.
• Do not hide anything from your insurance agent. You can get the best advice on your insurance needs with full disclosure.
• Ask for a comprehensive business package which includes complete coverage on all property belongings and principals involved with your business along with the liability insurance to help you protect against any legal action for non-performance of service or product contract.
• Choose coverage for all key employees, office premises and office contents.
• Make sure to get variations and riders on your policy as your business grows.
• Take adequate care on limiting your insurance costs when you downsize your business. You do not want to be underinsured or overinsured at any moment of time.