If you’re currently looking over your very first business insurance quotes, it would be surprising if you didn’t naturally have some questions. Business insurance quotes are complicated, but you can simplify how you view them by just knowing what you need to look for.
The purpose of this article will be to outline what you need to look for in business insurance quotes and to define some terms that you may be seeing but don’t know the meaning of.
Here are the top four things to look for in business insurance quotes:
1. What Does The Insurance Cover?
This is obviously the first thing you will want to look for in any business insurance quote. What is covered by the insurance? Examples of what you should expect to be covered include the following: legal fees and court costs, fire damages, medical payments, injuries that occur on your business premises, and property damage.
2. What Are The Limits Of Liability Of The Insurance?
While it’s critical to know what is actually covered by your business insurance, it’s really the limits of liability that serve as the heart of your insurance. This is because the limits of liability state how much your potential insurance carrier is actually willing to pay for any claims you make and for the whole policy period.
In particular, if you are purchasing business insurance because you are required to from a contact, then you must absolutely make certain that the liability limits of the quote match up well with the terms of the contract. Otherwise, the insurance won’t be of any use to you and you’ll have to find a new quote from a new provider.
3. How Is Payment Conducted?
Next, you need to look into how payment of the insurance is conducted. There are two primary ways payment is conducted: either through agency billing, meaning payment is conducted through the insurance broker, or direct billing, which means payment is conducted through the insurance company itself.
Between the two, direct billing is the more common option, with payment plans offered to you. In the case of agency billing, however, the broker will need to collect the payment in full through wire transfer. Up until then, the insurance policy will not be effective. While this may hurt business startups that are strapped for cash, most insurance companies with agency billing will offer credit card options.
4. What Are The Retentions On The Insurance?
Retention is simply another word for deductible. The retention is therefore simply the amount you will pay out of pocket for every claim that is made on your policy.
For example, if your claim is fifty thousand dollars and the retention of your policy is five thousand, this means you will pay five thousand while the insurance company will pay forty five thousand. A higher retention will reduce the monthly premiums you have to pay.
5. Is The Insurance Provider Admitted Or Non-Admitted?
Next, you should look into whether your insurance provider is admitted or non-admitted. An admitted provider means that it has been admitted by the state insurance department in order to write insurance policies, and the provider must subsequently comply with any state regulations.
The benefit of going with an admitted insurance provider for you here is that if in the future you feel the provider is not handling your claim correctly, for relief you can appeal to the state rather than just being on your own.
While you’re at it, also look into the A.M rating of the provider as well. The lowest possible rating is an F while the highest possible rating is an A++. As a general rule of thumb, do not go with any insurance provider with a rating that is lower than an A—.
Business Insurance Quotes
When it comes to selecting the best business insurance for you, it will always pay off to conduct your research like you’ve just done by reading this article. Keeping your business protected from any future unexpected events or potential legal troubles is simply the responsible thing to do as a manager or business owner, and that’s where business insurance will prove its worth to you.
