Gaizer.com Tips for Business Start-ups

There are a couple of different ways to buy insurance for your business. Institutions you already have a relationship with—such as your bank, home insurance agent, or accountant—may be able to recommend an insurance agent. Ask fellow entrepreneurs who are in the same industry to suggest an agent. If you do not know anyone in the same field, visit a place of business and ask to speak with the owner.

Make sure you contact your industry trade associations; there might be specialized insurance companies that cater to your industry. Visit Web sites such as http://www.idealist.org to get a list of non-profit associations catering to your industry. Contact these associations for a list of insurance providers.

Once you find an insurance agent or broker, ask plenty of questions. The agent should be knowledgeable and should be interested in addressing your concerns. If possible, visit the agent’s place of business and speak with him or her directly.

Once you start a dialogue with the agent or broker, request price quotes and information about available coverage. The strange part of the insurance process is that you will not know the exact details of your coverage until you receive your policy. The policy will be many pages long and have all of the details of your insurance package. Read this policy very carefully; if you have any problems or think something should be added to the policy, contact your insurance broker immediately.

Choosing Your Agent or Broker

Finding the Best Price

Never get a price quote from just one company. You should get many different quotes for different coverage types. Ask why there is price difference and their rationale for charging different prices. When shopping around, try to establish the price of a business owner’s policy. This packaged solution offers almost all of the general business insurance needed, but at a discounted rate.

Talk to your insurance company regarding precautions you can take to reduce you insurance payment. There might be some type of training for your employees or preemptive precautions you can take—such as installing alarms or creating a disaster plan—that will reduce your insurance premium.

It is important that you gather price quotes from various insurance companies. You can compare the price and quality and make a more informed decision. You should also see if the insurance company is financially stable and reputable. Ask for their ratings from independent rating companies such as A.M. Best & Co. (http://www.ambest.com), Standard & Poor’s (http://www.standardandpoors.com), or Duff & Phelps (http://www.duffllc.com). These ratings are only for the insurance carrier, not for the insurance agency or individual broker. Remember, the insurance agency and broker resells the insurance services of insurance carriers.

What Should You Do if You Have a Problem with Your Insurance Carrier?

It is important that you document all of the communications you have with your insurance carrier. If you make phone calls, follow up with an actual letter. Insurance is a very old industry and they have a hierarchal way of doing business. The official and accepted way of making a complaint to an insurance carrier is through a written letter, not just a phone call.