6 Questions to Ask When Choosing a New Business Insurance Policy

Your business insurance policy is a key part of protecting your business and finances in the event of damage or an emergency. Taking the time to choose the right policy, not just the cheapest one, can save you significant money and hassle in the long run should problems occur and you need to file a claim.

Here are the questions you need to ask when choosing a new business insurance policy:

1. What coverages are included? What are the limits?

Business insurance needs to go beyond liability insurance and coverage for your physical space. Understanding everything that’s included in your policy is one of the most important steps when choosing a new insurance plan for your business. This will ensure you’re not missing any important coverages and avoid surprises when you do need to make a claim. 

Surprises can be fun…but not with insurance!

Beyond just the coverages, you also need to know the limits in place on them. Whether it’s the maximum amount your insurance company will cover or what may cause a claim not to be covered, it’s critical to understand and cover your bases before it’s too late.

2. How much is the deductible?

An insurance deductible is an amount you must pay before your insurance coverage kicks in. For example, if you file a claim for $5,000 worth of damage but your deductible is $1,000, you are responsible for paying $1,000 and your insurance company will cover the other $4,000.

Understanding the deductible you’re responsible for can help with building an appropriate emergency fund and managing your finances in the event of a claim. 

You should also work with your insurance agent to determine the right deductible based on your finances, risk assessment and business operations. A higher deductible can help lower your premium, but means you’ll have to pay more in the event you do need to file a claim. 

Like so many aspects of insurance, there’s not necessarily a right or wrong answer, only what’s best for your unique business.

3. Are all the unique aspects of my business protected?

No two business insurance plans are alike because no two businesses are the same! 

When choosing a new commercial insurance policy, you should have an in-depth conversation with your agent about all aspects of how you run your business to ensure nothing goes uncovered. The more information you provide your insurance agent, the better advice and coverage they will be able to provide.

Examples of areas that could go overlooked include business contents coverage if you run a home-based business, bailee insurance to protect customers’ possessions while in your care and innkeepers liability bed and breakfast owners.

4. Are there any ways I can reduce my premium?

On one hand, insurance is one of the areas of running a business where cutting costs can come back to haunt you later. On the other hand, it’s still smart to explore ways to lower your premium without reducing necessary coverage or putting your business at risk.

By working with your agent, you may be able to uncover immediate savings such as discounts from combining policies as well as longer-term ones such as a discount after a period with no claims. 

For existing policies, you should also periodically review your policy with your agent. You may be able to save money by removing coverages that are no longer necessary or adjusting coverage amounts to what’s most appropriate for your business at the time.

Fun Fact: Did you know that with a mutual insurance plan, you may actually receive a refund on your policy? That’s right, in the event your mutual insurance company has a surplus of funds they can opt to return that surplus directly to policyholders.

5. What kind of customer service can I expect?

Will you work with a dedicated agent or are claims or inquiries simply assigned to whoever’s available? What are their business hours and how do they handle after-hours inquiries?

Do they rely on phone communication or do you have other options such as live chat? Can you view your policy and claim information online or in an app?

There’s not necessarily a right or wrong answer to this question. Think about the level of support you need and make your decision based on whether or not the insurance company’s communications methods will work for you.

6. How do I file a claim?

Filing an insurance claim for your business can be enough of a hassle so the last thing you need is to have a complicated claims process to deal with. 

You should always inquire as to the company’s process for filing a claim; can you file a claim online or does it need to be done on paper? Can you begin a claim after-hours or can it only be done during business hours? If their office is further away, will they travel to see you or is it your responsibility to visit their office?

Similar to customer service, there’s no one best approach to take here. Think about what’s most convenient for your business’ needs and proceed accordingly. 

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Asking the right questions before purchasing a business insurance policy can go a long way in protecting your business’ future. Use this list to evaluate any potential commercial insurance policy and get the coverage and support you need to help your business succeed.

When it’s time to choose a new commercial insurance policy for your business, give Cayuga Mutual Insurance a call. Our agents will answer the above questions and more to find the right coverages for your unique business needs.