NFIB

How to Select a Business Insurance Provider
05/ 03/ 2004

Insurance is the one expense a small company hopes to never recoup. But when operational loss or damage to the company's premises occurs, insurance can be the difference between remaining in business and declaring bankruptcy. For this reason, it's important for every small business to have adequate business insurance in place, even before opening its doors. In today's Workshop, contributor Jeffrey Moses discusses the all-important first step: selecting an insurance provider.

Most small companies can receive adequate coverage for a wide variety of possible losses through a standard business owner's policy, or BOP. Coverage usually includes: casualty insurance for fire and theft, liability against customer injuries while on premises, business interruption insurance, computer coverage and non-intended libel or slander. All BOP's are different, and actual dollar coverage for specific losses varies from company to company. So it's important to go over a policy carefully before purchase.

That's why choosing an agency is crucial. An independent agent can work with you to examine coverage offered by a number of different insurance companies and can help you select just the right amount of coverage for your needs. Agents can also go to bat for you when you have a loss, facilitating and speeding up claim processing and payment.

In general, it's best not to simply select an agent from the Yellow Pages. Ask for referrals from other business owners. Some owners prefer to look for a local agent who is more likely to be familiar with the ins and outs of business in your area. Make sure the agent you choose has professional credentials, such as the CPCU accreditation (Certified Property and Casualty Underwriter). CIC (Certified Insurance Counselor) accreditation is also noteworthy, although it does not demand the intense commitment that the CPCU course does.

When you meet with the agent, present all the financial and operational details of your business. Ask for suggestions and see how responsive the agent is in examining and discussing your specific situation. If you feel comfortable with the agent, get a few quotes from companies he or she represents, based on your business parameters.

As a final note, the insurance industry has suffered major losses as a result of Sept. 11, and some small business owners may face difficulties obtaining or renewing their commercial property insurance, depending on business type or location. Lawmakers have proposed legislation calling for the federal government to step in and help the industry if another disaster comparable to Sept. 11 occurs in the future. Congress left for Christmas break before acting on such legislation. It's unclear when, or if, it will be brought back to the forefront.

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