Buying insurance and reading your policy probably doesn't top the list of things you enjoy spending time and money on... until something happens. However, most business owners don't read their policy to find out what is covered by insurance until they are faced with a loss.
Unfortunately, understanding your insurance policy after something happens is not the best way to protect your business from financial loss. One way to avoid this, according to Jeff Shaw, Vice President and Sales Manager of Clark Insurance in Portland, Maine and Manchester, NH, is to consider your insurance agent as a partner in your business.
The outdated stereotype of an insurance agent is someone who talks you into something that you don't need and can't afford to pay for. In contrast, a good business insurance agent should be considered a trusted advisor who understands your business and can steer you towards insurance products that are specific to your needs.
While all businesses need some of the same basic insurance products (auto, property, liability), your business may have some other specific needs.
- Do you have a business partner? You may want to look at key person insurance, so you can buy the business from your partner's heirs after he/she dies.
- Worried about theft? Crime insurance might be important for your business. A good insurance agent will help you figure out which insurance products are the most appropriate for your specific needs.
What should you expect from a closer partnership with your insurance agent? According to Jeff, a good agent will:
- Understand your business exposure. To do this, they need to completely understand your business operations. For example, your agent may suggest specific insurance if they know you run a business out of your house.
- Customize insurance options. Not everyone needs the same types of coverage. Frank discussions with your agent will help them understand the most critical components of your business. Their goal is recommend insurance that will minimize losses so your business can continue to thrive.
- Spend time educating you. Most of us are not (and don't want to be) insurance experts. You want to find an agent who will take the time to explain insurance documents in an easy and understandable way. Your goal: know what coverage you do and don't have, and the costs involved with each option.
- Review your existing policies to identify gaps in your insurance needs, and then provide options and associated costs to cover these gaps. As a business owner, you can then make an informed purchasing decision.
How do you find the right agent?
- Start by asking trusted business associates for the name of their insurance agent.
- Look for an agency with a Trusted Choice logo so you know they have achieved certain standards of operation.
- Find an agency that can provide the services you may need as your business grows. For example, an agency with a small business unit may offer templates for an employee handbook, which is useful as you add staff. Your goal is to find an agency that can grow with you and your business objectives.
Consider your insurance agent a partner in your business instead of someone who provides an ancillary service that you hope you will never need. Take the time to invest in a review of your insurance so a single loss does not put you out of business.