NYC Insurance Blog

5 Important Questions You Must Ask Your Business Insurance Agent

Running a small business can be risky because a catastrophic event or legal claim can wipe out your business. That’s why investing in the right insurance policy is critical. When buying insurance policies for your business, thorough research is required. However, do not limit your research online because there are other things you should clarify with your insurance agent in person. Therefore, book an appointment with your insurance agent and ask as many questions as possible. Working with a knowledgeable insurance agent is crucial, especially if you need a second opinion. Here are five important questions you cannot afford to miss asking your business insurance broker:

I. Which types of insurance policies should I consider?

Business insurance brokers offer numerous policies to protect your business. However, the type of insurance policies you should purchase is determined by the kind of business you are running, exposure, and location, among other factors. Typically, here are must-have insurance policies for small business owners:

General liability insurance

Although it is not mandatory to buy this policy, it is prudent to get one. With general liability insurance, business owners are protected from advertising injury, customer injuries, or damage to their property. Sometimes, this policy is required when signing a lease or contract. 

Commercial auto insurance

For business owners who have business vehicles, commercial auto insurance is a good investment. The policy covers legal fees, property damage, and medical expenses incurred if you or your employees are at fault in an accident. Remember, without this policy; you will have to pay out of pocket for all the expenses. If the vehicles used to operate your business are hired, rented, or leased, consider purchasing hired & non-owned auto insurance policy (HNOA) because commercial and personal auto does not cover such business-owned vehicles. 

Business owner’s insurance

Business owner’s insurance (BOP) provides all the basic coverages required because it combines business property and liability insurance into one bundle. With this policy, your business is protected from claims arising from theft, vandalism, fire, smoke damage, etc. It is important to clarify with your insurance broker to know the listed perils.

Workers’ comp insurance

Accidents can occur even though you are careful and follow all the safety precautions. Workers’ comp is crucial and required by law in most states if you have more than one employee. The policy comes in handy if an employee is injured or gets sick on the job. Workers’ comp covers the employee’s medical bills, lost wages, and legal fees if you are sued. 

Errors & Omissions Insurance (professional liability insurance)

If you provide services to clients and customers, consider investing in professional liability coverage. This policy protects business owners and employees from claims relating to professional negligence, omissions, mistakes, and misrepresentation. If a client or customer claims you or one of your employees made a mistake when offering services, E&O helps cover legal and court costs, including court judgment and settlements. 

ii. How will the insurance agent help in claim settlement?

The claims settlement process can be daunting, especially if it is your first time. However, the insurance agent should give you the necessary guidelines and pointers. It is good to be prepared if an incident occurs. Ergo, knowing how the insurance company or agent helps their customers with claims is vital. Legally, a licensed independent insurance broker can help you make a claim. However, you need to understand the process of filing a claim and how the agent will help. As a rule of thumb, always contact your insurance provider when filing a claim. Claims are hard to navigate, let us assist you by making us your Agent!

iii. How much does my business insurance cover and is it sufficient?

Besides knowing what the policy covers and excludes, your agent should explain the extent of the coverage and whether it is sufficient. Depending on your budget and business needs, you can opt for annual aggregate or occurrence limits. A good insurance advisor should explain the difference and help you choose the appropriate limits based on claims history, risk exposure, type, size, location of your business, etc. 

IV. Which factors affect my business insurance costs?

Several factors affect insurance costs, but your agent can help you find coverage that fits your business. Here are some of the factors that affect the cost of insurance policies:

Your industry

Some businesses carry higher risks than others. Businesses with higher risks, for example, construction, attract higher premiums. 

Business Location

Where you operate your business can determine your insurance premiums. For example, if your business is located in a high-crime area, your will pay higher insurance rates because there is a higher chance of theft or vandalism. Also, expect to pay higher premiums if you operate your business from a wildfire zone or flood-prone area. 

Business size

The number of employees and revenue mainly determine the size of your business. Higher revenues and numerous employees usually increase premiums due to the risk involved. 

Claims history

Your previous claims history affects your premiums. Businesses with few or no claims are considered low risk, while those with several claims are deemed riskier. For example, if you have been sued several times for professional negligence or mistakes, an insurer might charge higher premiums on your E&O policy. 

V. How can I get the best rates?

It is possible to save money and get all the coverage you need. However, if you don’t know the money-saving tips, you could spend a lot of money. A good insurance agent should present you with several ways you can get the best rates depending on the type of coverage you want, type of business, and budget. Many insurance companies offer discounts to their customers if they buy several policies or have installed security systems. Since insurers have different rates and discounts, work with your insurance agent to know how you can save money. 

Conclusion

Searching for the right insurance policy can be overwhelming and time-consuming. However, it is important to interact with your insurance agent and ask questions to understand what is covered in your policy and how you can file a claim, among other things. It might sound like a lot of work, but you will have peace of mind knowing that you made the right choice if you ever need to file a claim. Give us a Call Today, and Let us be Your Agents!

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