Insuring Your Business With Confidence

As you well know, insuring your business against loss is one of the most important elements of your strategy for success. Having the right insurance for your business is not only prudent but can provide a level of confidence as you grow. Insurance is one of those specialties, like banking and accounting, where it is best to rely on a professional's expertise, rather than attempting to navigate the ins and outs on your own - even for a relatively small firm. Let's hear what the professionals advise when it comes to being insurance savvy.

Here are some basic truths about Business Insurance from Ryan Pinney, CSFP Chartered Senior Financial Planner and Brokerage Director:

• Almost any risk can be lessened through some type of insurance policy.
• Large firms often have the luxury of hiring full-time risk managers, but smaller businesses almost always have to face this challenge solo, without the assistance of a specialist.
• Most smaller firms can limit their insurance to three basic types of protection: property, liability and workers compensation.
• Often businesses can bundle property and liability insurance needs into a Business Owners Package Policy (also known as a BOP) saving time, money and duplication of coverage.

"Unfortunately," Ryan reminds us, "Many miss the boat when it comes to their application. Each year, businesses spend over $100 billion on insurance premiums. Yet many firms have the wrong coverage, or pay too much for the protection they get."

What factors should you take into account when choosing insurance protection for your business?

Ellen Bohn-Gitlitz, a Massachusetts insurance broker for over 15 years suggests the following:

1. Work with a broker who understands your industry. When I am referred an account that is outside my specialty, I either refer it to someone else in my office or I walk away from it because I can't do the best for the client.
2. Think of best value and not lowest price. Price is a very important consideration, but value is more important. I have picked up a number of clients because their old broker didn't read the forms and the main focus of their business was excluded from the policy. This was in the fine print. Even though their old policy was a lower price, what good did it do them if it didn't cover what they needed?
3. Find a broker that you can trust and consider your broker part of the management team. If you don't tell your broker what is going on in the company, how can that person suggest the appropriate insurance?
4. Don't put it out to bid every year but every 2 to 3 years. When you are dealing with middle market or larger accounts, if an underwriter has quoted it every year for 5 years and didn't get it, they either won't quote or won't be serious about getting you the best value.
5. Check the financial stability of the carrier and how their claim services are rated. Also find out if the carrier writes a lot of business in your industry.

Insurance is one of the biggest expenses for a business, yet the peace of mind gained from knowing you are adequately covered against loss is priceless. Keeping these factors in mind will help you obtain the right insurance coverage from a reputable source for the optimum protection of your business.

Are your business's insurance needs being adequately and competently met?