Let’s be honest, nobody likes buying insurance. It’s something we all need and something we all have to buy. From personal insurance for our homes and cars to health insurance for our families, it can be overwhelming and expensive. Plus, it certainly doesn’t help that every other commercial on TV is talking about some kind of insurance.
Insurance doesn’t have to be overwhelming. When it comes to small business, there are a few key things to keep in mind to simplify the process.
Know What You Need
All businesses are different and therefore require different kinds of insurance. A pizza restaurant has very different needs than an electrical contractor. But, at the core, insurance is not that complicated. Following is a quick rundown.
Liability: This covers you for what happens to other people. If someone falls in your store and hurts themselves, it’s liability. If you or an employee makes a mistake that costs a customer, it’s liability.
Property: This covers you for what happens to your stuff. If you own a building, or if you own the equipment and furniture in the building you rent, property coverage will keep it safe.
Workers’ Compensation: This covers you for what happens to your employees on the job. If one of your employees hurts themselves while working, workers’ comp (as we call in the industry) will pay medical bills and can cover costs associated with lost time for your employee. It also prevents them from suing you.
Don’t let insurance stress you out. If you keep it simple, and understand what the different policies do, you can piece them together to build your own financial risk mitigation structure.
Know Where to Get It
Commercial insurance is sold almost exclusively through agents or brokers. At the end of the day, all agents are accessing the same insurance companies, and they cannot get different results from multiple agents. It’s in business owners’ best interests to talk to agents first, understand which one you want to work with and then let them “shop” the market. If you pick five agents and set them loose, you’ll likely end up with one quote from each and you will make your decision based on that, not necessarily on which agent is the best. It’s much better to find one agent, and let them move the competition up a level to the insurance companies.
Not All Agents are Created Equal
Many agencies carve out niches in the insurance world. Some are great at personal insurance, some have moved up market and only serve large businesses and some focus on key industries like construction. If you are a construction company, one of these specialists is absolutely where you belong. But, if you are a small retail shop, this is less than ideal. A lot of agents have changed their own structures so that small businesses are grouped into “Small Business Units” where they are left. The agents aren’t compensated for these, so they are busy working on large accounts, not yours. Being grouped into one of these may not be a bad thing, but just know what you are getting.
There’s a Digital Marketplace
Commercial insurance is changing due to technology. Insurance companies and digital insurance marketplaces are democratizing insurance and delivering it in ways we have come to expect in other industries. Being able to research, purchase online in minutes, and from any device, seems common place, and these tools are now coming to commercial insurance.
Adam Kiefer is the co-founder and CEO of Talage.
