How to Choose a Business Insurance Provider [2024]

On the surface, a lot of business insurance companies may look the same. But when it’s all said and done, even the most subtle differences might cost you a fortune.

It’s why we’ve put together this guide on how to choose a business insurance provider. From price, to coverage, and to customer service, we are hitting all the high points to make sure you know what’s most important in your search for the perfect provider.

Just as homeowners spend time researching in and investing in the right home insurance policy to protect their investments, a business owner – whether of a small business or large one – must do the same.

There are various types of business insurance coverage, and fortunately, there are also multiple ways to save on your premiums. Among these options, one of the easiest and fastest methods is to compare live business insurance quotes from different companies.

Enter your ZIP code into our free online quote comparison tool to do just that and find the policy that suits your insurance needs.

Why do you need business insurance coverage?

The U.S. Small Business Administration’s Office of Advocacy reports that there are 30 million small businesses with nearly 60 million employees in this country. And here’s the deal — each and every one of these businesses must consider getting insurance coverage for themselves, and in the interest of their employees.

Business insurance coverage is meant to protect your company from losses that could cost you your business, or in some cases, cost you your personal assets. Here are some real-world examples to consider:

• If you have a business loan, your financial institution may require certain coverages.
• If you have not yet incorporated, you may want to protect your personal assets.
• If customers visit your premises, you may need to decide how much liability insurance your business should carry in case they are injured on site.
• If you employ others, you will need workman’s compensation coverage.

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What kinds of business insurance coverage do you need?

There are many different types of business insurance policies that cover separate aspects of your property and liability. For instance, you may decide you want something as specific as business interruption coverage. Or, you may think that you need a business owner’s policy (BOP) which provides several forms of coverage. In each case, you will want to be certain you understand everything that is covered, and everything that is not covered.

Naturally, one of the biggest factors in how to choose the best business insurance provider for your needs is cost. And we know that business insurance shoppers will want to compare rates for insurance policies. But buyers should always proceed with caution.

While price should certainly be a factor, you must be certain the prices you compare are for the exact same types of coverage. A lower price may indicate lower coverage, an omission you do not want to discover when you have to make a claim.

Bottom line? Knowing what kind of coverage you need will be just as important as what kind of rates you’ll end up paying. Below, we’re digging deeper into the types of coverage you’ll want to remember as you work to choose the best business insurance provider.

What types of business insurance coverage are available?

Comparing business insurance policies (which can sometimes be referred to as commercial insurance) is a matter of understanding your needs and the specific coverage each policy offers. First thing’s first:

When it comes to what kind of insurance your business needs, the two major forms of coverage you need to know about are liability insurance and property insurance.

Let’s take a closer look at these coverages:

• General Liability Insurance: This form of coverage is also referred to as business liability insurance. It’s meant to provide protection in a variety of claims, ranging from the legal to medical. When it comes to the specifics of what general liability business insurance covers, this generally includes medical payments, individual injury, public relations or advertising injury, product or operations liability, and independent contractors liability.
• Property Insurance: This coverage protects the company’s buildings and equipment. More specifically, property insurance will protect against damage from fire, theft, water damage, and other perils. Property insurance is also crucial for businesses that have inventory, as it can serve as a form of protection in the face of the unexpected.

As you explore how to choose the best business insurance provider, realize that you may need some or all of the following:

• Business Interruption Insurance: Also referred to as business income coverage, this helps protect against work stoppage or lost income due to a business interruption event, like a natural disaster.
• Commercial Auto Insurance: This type of coverage is geared toward protecting any company-owned vehicles.
• Health, Disability, and Life Insurance: Consider this coverage for both employees and owners.
• Workers Compensation Insurance: This form of coverage helps cover medical care or lost wages in the instance an employee is injured on the job. According to the Insurance Information Institute (III), every state but Texas requires all small businesses of a certain size to have this form of insurance.
• BOP (or Business Owners Policy): This type of coverage will usually include all major forms of property and liability insurance needed by businesses, plus a few extras.

This video further breaks down the different types of business insurance that small businesses will want to explore, including unemployment insurance and worker’s comp:

Before comparing the pricing on the various business insurance policies, make sure you understand what each policy covers. Some business insurance providers will offer you a lower-priced policy that omits coverage that a higher-priced business insurance policy includes.

Take a BOP plan. Though it provides general coverage, it may not include coverage specific to your company’s needs. In fact, you may need to add other policies to a BOP to get full coverage for your business. Therefore, you’ll always want to be sure to do the necessary research into the coverage you need.

Something else to keep in mind: if you have an LLC (Limited Liability Company), you will definitely want to consider securing a business insurance provider and policy. This can come in handy should you become involved in a lawsuit, or if you have employees who will need workers comp insurance.

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How can you find a business insurance provider with good customer service?

Customer service matters when choosing a business insurance provider. A good insurer will help you understand your business needs so you are not left high and dry without enough coverage following an event.

When you are in a crisis, you need to know where you stand immediately so that you can take action. A good insurer will respond to your inquiries quickly so that you can make necessary decisions on a timely basis.

Many insurance companies are eager and attentive when making a sale, but not so responsive when resolving a claim. Compare customer reviews of insurers to learn whether there are customer service issues.

What are the best ways to learn more about a business insurance provider’s customer service?

Word of mouth never hurts. For instance, if you know of other entrepreneurs who also had to take out a business loan and were also required to have certain coverages, they could be good resources.

You can also head to the Better Business Bureau (BBB) site to not only look up your prospective business insurance provider, but also any local offices. The BBB produced this short video guiding consumers on how to quickly find company reviews:

Another source worth consulting is the National Association of Insurance Commissioners (NAIC) and complaint database. Through the NAIC, you can get a year-to-year picture of just how many complaints a business insurance provider is getting, and how it compares to the national average.

You can also scan a business insurance provider’s social media page and see what kinds of reviews people are leaving. Sure, those customers may not necessarily represent the majority. However, if you see a trend among users, you may need to take note.

Not sure which providers companies actually provide business insurance coverage? Here’s some good news: we have answers. We’ve compiled an extensive A to Z list of business insurance companies that you can browse through, a helpful tool in choosing the best business insurance provider and policy for your needs.

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How do you find out about a business insurance company’s financial rating?

It’s simple: ratings let you know how other organizations view an insurance company. If a company has low ratings – particularly when it comes to finances – this might indicate that they may not have the resources to settle claims, or they have a history of being slow payers. Here are a few key ratings issuers you’ll want to keep in mind when searching out the best business insurance company:

• A.M. Best: According to their site, A.M. Best “provides news, credit ratings and financial data products and services for the insurance industry.” A.M. Best’s financial strength ratings can tell you how financially stable an insurance provider is.
• Moody’s: Considered one of the “big three” credit agencies in the world, Moody’s tracks credit risk tied to insurers.
• Standard & Poor: Also part of the “big three,” S&P ratings “express an opinion about the ability and willingness of an entity to fully meet its financial obligations, and on time.”

Each of these entities uses a specific rubric to assign ratings to insurance companies. And let’s be honest: not all business insurance providers will rank well. Be sure to check out what each rating means, and how they may reflect on the prospective business insurance company.

How do you choose a business insurance provider?

We know you’re serious about choosing the right insurer for your business. To make the process of choosing a business insurance provider even easier, we’ve come up with this checklist:

1. Coverages: Make a list of the coverages you will need, and consider what deductibles you are willing to pay
2. Compare Rates: Get quotes from several insurance companies for these coverages. Remember, while price shouldn’t be your only point of consideration, you need to keep your overall business budget in mind
3. Look at Reviews and Ratings: Double-check the reputation of the company that looks most attractive, keeping a close eye on ratings, reviews, and complaints

If all of this sounds too complicated or you’re having trouble choosing a provider after doing your research, consult an insurance agent. Independent agents can help you determine exactly what kinds of coverage you need and where you can get it at a reasonable price.

Once you have settled on a provider, you will find you can rest easier at night. It only takes one disastrous lawsuit to bring all your hard work and your small business to a standstill. Knowing you have coverage and a reputable insurance company to represent you will bring peace of mind. With less to worry about, you can focus on building your business and providing your best to your customers and employees.

Case Studies: Choosing a Business Insurance Provider

Case Study 1: Protecting a Tech Startup

In this case study, we examine the experience of a tech startup that required comprehensive insurance coverage tailored to their industry-specific risks. Through diligent research and consultations, they found an insurance provider specializing in technology companies, ensuring their policies addressed potential liabilities related to data breaches, intellectual property, and product liability.

Case Study 2: Navigating Regulatory Compliance

For a small manufacturing business operating in a highly regulated industry, compliance with industry-specific regulations was a top priority. This case study delves into their journey of finding an insurance provider with a deep understanding of their industry’s regulatory landscape. By selecting an insurer well-versed in compliance requirements, the business was able to secure coverage that met all regulatory obligations, thereby avoiding potential penalties and legal issues.

Case Study 3: Expanding Internationally

In this case study, we explore the challenges faced by a retail company that was expanding its operations into international markets. The business sought an insurance provider with a global presence, capable of offering coverage in multiple countries and providing support for international risk management. Their diligent selection process led them to an insurer with a strong network of international partners, ensuring their expanding business was adequately protected across borders.

Case Study 4: Tailoring Policies for Professional Services

Law firms and other professional service firms need insurance tailored to their industry’s specific risks. A law firm sought an experienced insurer for professional liability coverage. Through collaboration, they obtained customized policies safeguarding them against claims of negligence and malpractice. This protected their reputation and financial stability.

Case Study 5: Prioritizing Customer Service

A customer-focused retail business sought an insurance provider aligned with their commitment to exceptional service. Through research and referrals, they found an insurer known for responsive claims handling and attentive support. This enabled them to uphold their high service standards during unexpected events.

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What’s the bottom line?

Whether it’s an unexpected storm, a lawsuit, or an injured worker — business insurance is a necessity. Having the best business insurance carrier on your side is imperative, and will require doing some legwork. That’s why now is the time to learn about what coverage you need, what it will cost, and to start comparing policies.

But it doesn’t end with finding the right provider — you also want the best rates. Start shopping for insurers now by plugging your ZIP code into our free insurance comparison tool.

Compare Insurance Providers Rates to Save Up to 75%

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