Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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what to look for in a business insurance carrier

Business insurance is as complicated as it is important. Choosing the right business insurance carrier can make the process much easier and safer. Before choosing your carrier you should have some idea of the kinds of business insurance you need.

Find the best rates available by comparing quotes from all the major insurance carriers. Enter your zip code above to begin comparing rates!

Legally Required Insurance

Worker’s Compensation: If you have employees, most states will require you to have worker’s compensation insurance. You can get this insurance through a commercial carrier, the state, or by being self insured. This will protect you from getting sued if an employee gets injured while on the job. Your rates are determined by many factors including, your safety procedures, accident record, and your type of business.

Disability Insurance: Your state may require you to purchase disability insurance to assist an employee who loses income due to an injury or illness that did not occur at work.

Liability Insurance: Liability insurance protects you if you are found liable for injuries or damages caused by you, your employees, or your product. While not always legally necessary, if you are willing and able to assume the risk yourself, many types of businesses are required to to carry liability insurance.

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Insurance Required By Creditors

  • Property Insurance – This protects your property against damage caused by theft, fire, flood, and other risks.
  • Casualty Insurance – Very similar to liability insurance and is frequently grouped with property insurance.
  • Commercial Aut0 – If you use vehicles in your business, even if you use your own car, you need commercial auto insurance.

To find out what insurance is required, check with your state’s department of insurance and your creditors.

Optional Insurance

optional business insurance

Many types of insurance are not required but are a good idea. These include:

  • Key Employee – Does your business depend on one, or a few key employees, for example, your top salesman or project manager? Key employee insurance protects you against loss if something should happen to them.
  • Business Interruption – If your building burns down, your property insurance may pay to rebuild it, but who pays the others bills and makes up the loss of income?
  • Special Insurance – This would cover special needs not included in general policies, a hand model’s hands, an opera singer’s voice or a special piece of equipment for example.
  • Health Insurance – Many businesses find that having a good health plan attracts better employees and increases productivity.

Special Packages

All this can seem very intimidating but the good news is that insurance companies have made this easier by having special packages designed for your type of business.

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How Much Insurance Do I Need?

Here are 4 steps to follow to determine how much insurance you need to have.

1. How much is required?

As stated above, check with your state department of insurance and your creditors to find out the legal minimums for your business.

2. How much will you lose?

The main purpose of all insurance is to replace loss. You need to be able to have a good estimate of the money lost and/or replacement cost for a particular event. For example, if your building burns down you need to know, not only the cost to replace it, but how long it will take so you can calculate the loss of revenue.

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3. What is the risk?

Sure, if a hurricane hits your business in Alaska, you will be wiped out, but what are the odds? You probably can’t insure against everything so be reasonable.

4. What is the cost?

It does you no good to have great insurance if the premiums will put you out of business. You must have the legal minimum but, after that it is a balancing act between loss, risk and what you can afford.

Choosing the right Business Insurance Carrier

Now the you know what you need, you are ready to choose the right carrier for your business. Make sure to research at least three carriers before making your decision. Again, most of this information is available on your state’s insurance web site or online. Here’s what to look for:

  • State License – They need to be licensed in your state and it is best if they are physically located there.
  • Long Term Stability – Check out their financial ratings and research how long they have been providing your type of insurance.
  • Industry Expertise – Find a company that actually has experience with your type of business. Make sure they provide the coverages you need with the appropriate limits. Do they have special packages for your business?
  • Customer Service – First, speak with them. Can they answer your questions? Do they seem interested in you? Then, find their renewal rate, check out reviews on industry web sites and contact the NAIC for information about complaints. This should give you a good idea about the type of service you can expect.
  • How are Claims Handled? This may be most important. Make sure you know:
    • How do you file a claim?
    • What kind of investigation is done?
    • How long does it take?
    • What happens to your policy?
    • Who provides legal representation
  • Price – When comparing prices make sure they are for similar coverages. Don’t get that really great deal and then find out it doesn’t include all the coverage or services you need.

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Your Insurance Carrier Can Save Your Business

Over 50% of all businesses fail within the first 5 years. Many of these could be saved with the proper insurance. Disasters alone acount for ten percent. Having a good working relationship with an experienced reputable carrier can make all the difference in the success of your business.

Compare quotes now by entering your zip code below. Choose the insurance policy that best fits your business.