Q. Is the coverage my landlord has on my building important to me?
A. Many small businesses rent their place of business. The building owner will require the small business to provide a General Liability policy before they allow them to occupy the premises. But, it is very important that you also understand the landlords building policy, as that would cover any damage to the building your business is in. If there is a claim that the building owner’s policy covers, it could affect the time your business is operational again. So, make sure you know the insurance company for the building owner’s policy and an 800# for claims reporting.
Q. If I deliver supplies, equipment, etc. in my fleet/vehicles, are they already covered by my general policy or do I need additional coverage to cover this material while in transit?
A. The supplies and equipment owned by your business are covered when they are in your custody and control. The transfer of ownership takes place when you transfer the custody and control of the materials to the purchaser.
Q. Aren’t all of the Insurance Agents offering the same type of policy?
A. Not really. It depends upon what risk types and kinds of businesses a particular insurance company may prefer or specialize in. Insurance Agents represent the Companies they are contracted to bind business for. The Companies control what type of policies the Agents can bind and determine what they have an “appetite” for. Some Companies like State Farm, Allstate, Farmers, etc., allow their agents to write business for only their Company and they specialize in selecting certain risk types. Independent Agents represent multiple companies that, combined, will have a broad “appetite” for risk.
So, given the different “appetites” for risk between companies, it is always advisable that you review and shop different companies and their business policies. One convenient way to shop is with an online site that offers comparisons and general information. You may also individually contact different companies.
Q. I've got many coverage needs, but I have a budget to keep in mind. What's the best insurance policy for me?
A. Absolutely. You may want to consider a business owner’s policy (BOP). A BOP includes many important benefits of commercial property, general liability and business income policies.
BOPs combine basic coverages needed by a typical small business into a standard package at a premium that is generally less than would be required to purchase coverage’s separately. The simplified nature of the package appeals to business owners as opposed to buying a collection of small policies. This efficiency also appeals to insurance companies and allows them to offer a lower premium for the package.
Keep in mind that a business owner's policy won't insure everything such as flood insurance or earthquake insurance or owned vehicle coverage and specialized liabilities are generally not included in BOPs. Some of these may be available separately for extra premiums.
However, small business owners who qualify appreciate the ability to control so many different types of coverage under a single policy.
Q. Is there a way for me to keep insurance costs low without sacrificing coverage?
A. Definitely. The first step is to gather quotes from at least three different providers of business insurance. Some of them might offer incentives or valuable packages for your type of business; others might make you eligible for a business owner's policy. You won't know what's out there, unless you do a little searching.
Even though you have submitted the exact same information to different insurers, the premiums that you’re charged for your business insurance will be different. This is because the points that you’re awarded by the insurers will be different, due to the company’s own risk profile and claims experience.
Therefore the only logical action that you have to take is to compare several different quotes from different established and reputable business insurance companies. Use an independent site like NetQuote.com to find the company that will give you the best deal.
The second thing you should do is discuss flexibility with the insurance providers you're interested in. Some of them may be more likely than others to help you customize your insurance coverage to better manage costs without sacrificing important coverage or resulting in expensive penalties for being under-insured.
Ask the provider about multiple-policy discounts as your third step. Providers of insurance reward clients who have more than one policy with them. Keep in mind that personal insurance coverage can increase your chances of earning a multiple-policy discount on your business insurance.
Lastly, remember this nugget of insurance wisdom: The more risk you take upon yourself, the less premium you pay.
That's why higher deductibles will end up saving you money in the long run. Many companies offer deductible options – so you should think about increasing yours and putting the savings directly in your pocket. But be careful not to raise deductibles to a level higher than you can afford to pay out of pocket. That's when things get dangerous.
Q. Is it possible to own property that I don't want to insure?
A. You might not have a choice in the matter. State law, in addition to other entities (such as a lessor or lien holder) might require you to insure some properties at a specific limit. If this isn't the case for a section of your business property, some insurance providers have options (such as exclusions or endorsements, etc.) that help small business owners manage costs by controlling their budget for insurance.
Give your insurance provider a ring. They can probably help you figure out how to manage this so that it won't result in an expensive penalty for being under-insured.
