Small Business Insurance Queries that You Must Ask Your Agent

Before buying commercial insurance, small business owners should find out what different policies cover, how much they cost, and how to save money on business insurance. Buying insurance for your small business is an investment in your company’s long-term financial health. Before you buy one or more small business insurance policies, there are a few important insurance questions you should ask when you start to look into your options.

No business owner can think of everything that could go wrong, which is why it’s important to find the insurance policies that work best for your business. Here are some important questions to ask your agent or broker about business insurance:

What Kinds of Insurance Do I Need for My Business?

What kind of business you need depends on how your business works, where it is, how exposed it is to risk, and a number of other things.

General Liability Insurance

One of the most common types of insurance that business owners look for is general liability. General liability covers injuries and property damage at your business. It also protects you if your advertising hurts your business. A business often has to sign a lease or contract with a client.

Insurance for Mistakes and Omissions

An errors and omissions insurance policy (E&O policy), also called professional liability insurance, is meant to protect you and your employees from claims by clients or customers of poor work or negligence. Even if it’s not required in your field, any small business insurance that provides services should have it. Errors and omissions insurance covers what?

Insurance for Workers’ Compensation

Workers’ compensation helps injured or ill workers. Employer’s liability insurance protects business owners. In most states, businesses with employees must have workers’ comp insurance, no matter how risky. Learn about workers’ comp coverage and costs.

Insurance for Business Owners

General liability insurance and property are both part of owner’s policy. This policy is a good choice if your business owns real estate or high-value business property like office supplies, furniture, and computers. 

How do I claim business insurance?

This is an important question to ask the insurance agent for your business. When something goes wrong, you will need to act quickly. If you think you have a claim, you probably shouldn’t call the agent who sold and manages your insurance policy.

Instead, you would probably first call the insurance company’s claims department. The sooner you file a claim, the faster it can be handled and the easier it will be to determine how much you’re owed and when you’ll need payment.

How Much Will My Insurance Policy for My Business Cover?

When you compare insurance quotes to find the most affordable policy for your company, your policy could have two types of payment limits:

  • Aggregate limit. This is the most your policy will pay out for all of your claims in a single year.
  • Per-occurrence limit. This is the most you could get for a single claim.

Your limits will depend on how big your small business insurance is, how risky your industry is, and how many claims you’ve made in the past. However, a licensed insurance agent can tell you what policy limits are best for your business.

What Affects the Cost of Insurance for My Business?

Here are some of the most common things that could change the cost of your insurance:

Type of Company or Business

There are different levels of relative risk in each job. If, for example, your has a fleet of vehicles and employees who spend a lot of time on the road, your needs will be different from those of a business that only operates out of an office.

Number of Staff Members

Whether you are a sole proprietor or have employees will affect how much your small business insurance costs. As a result, for workers’ compensation insurance, your rate is based on how much you pay your employees and how much you pay them. Costs go up for businesses with more workers.

Claims Made Before

Insurance companies use certain metrics to figure out how risky a company is. If you are applying for a new policy, an agent could ask for your insurance loss runs.  But if you have made a lot of claims, your premiums may go up. One way to keep the number of claims to a minimum is to make sure that your employees are trained well and regularly on the safety rules that apply to your workplace.

Risk

Even though the type of business you have is the biggest factor in risk, there may be other things that affect your employees’ level of risk. If your business is open to the public, there may be problems with walkways, parking lots, or other parts of the building that you wouldn’t have to worry about.

Payment plan

Depending on the insurance company and your choices, you may pay your premium all at once or in monthly installments. If you want to cover more risks, you can also choose a commercial umbrella insurance policy. An umbrella policy is an extra policy that adds $1 million to your coverage.