The right small business insurance coverage is a key investment to secure your financial future and protect your company from lawsuits.
When choosing an insurance company, there’s a lot of options out there. In today’s world, you can even get a policy without a single phone call or visit to an insurance office!
When researching the best insurance for your small business, a mutual insurance company absolutely needs to be on your list of candidates. Keep reading to learn how mutual insurance companies operate and why their focus on community and putting policyholders first makes them simply the best choice for small business owners.
How Does a Mutual Insurance Company Work?
First thing’s first, what makes a mutual insurance company different from the rest?
The goal of a mutual insurance company is not to generate the largest profit for shareholders. In fact, at a mutual insurance company, there are no shareholders. It’s the needs of our policyholders that come first, not profits.
The policyholders, not shareholders, of a mutual insurance company are the ones who elect the Board of Directors. The Board of Directors is in charge of governance and determining the company’s future. They also appoint the Officers of the Company who handle all of the day-to-day operations.
In exchange for agreeing to secure policyholders against insured losses, a mutual insurance company collects premiums. These premiums, as well as investment income, are used to pay for losses sustained by policyholders along with the expenses of running the company.
At the discretion of the Board of Directors, a surplus of funds will either remain in the company’s surplus account for future use or be returned directly to policyholders.
How Did Mutual Insurance Begin?
The history of mutual insurance in Ontario goes back to the mid-1800s. A group of 14 farmers agreed to come together and reimburse one another in the event of a barn fire because no insurance company would offer them coverage.
Today, Ontario Mutuals are a group of more than 40 independent insurance companies. Despite their local and rural focus, together they represent one of the strongest financial networks in the world.
While mutual insurance coverage now extends well beyond farms, they’ve stayed true to the concept of community, protected.
1. Buy Local, Insure Local
Consumers are often encouraged to shop at smaller, local businesses as a way of supporting the local economy. Why should it be any different for insurance?
When you get your insurance from a mutual insurance company, you’re practicing what you preach as a small business owner. Your hard-earned premiums aren’t creating jobs in an office miles away or funding the lavish lifestyle of a CEO who’s never even heard of your community.
Instead, your premiums employ your neighbours and community members and help build the local economy.
2. Your Premiums Support Your Local Community
Beyond creating local employment, mutual insurance companies take their role in the community seriously. They take pride in supporting the projects and causes that matter most to their policyholders.
From sponsoring community events and donating to local projects to hosting free events for policyholders and encouraging employees to volunteer in the community, supporting local is simply the mutual way.
3. More Personal Service
As a mutual insurance policyholder, you’re more than just a number. When you have a question about your policy or need to file a claim, an agent you know and trust will be there to help.
There are many demands on your time when running a business, so the last thing you need is to be put on hold forever waiting for the next available agent or playing phone tag trying to sort out a claim.
In fact, the person who picks up the phone isn’t someone in a faraway call centre. They’re a fellow community member who understands your unique insurance needs and the challenges of running your business.
As a small business owner, you take pride in offering quality customer service. When you’re insured by a mutual insurance company, you can expect that exact same level of care and respect.
4. You Might Even Get Some of Your Premium Back
As we’ve already mentioned, a mutual insurance company exists to serve its policyholders first as opposed to generating profits for its shareholders. This means that when there’s a surplus of funds at the end of the fiscal year, the Board of Directors will often decide to refund some of the premiums back to policyholders.
That’s right, you could get a refund back on what you’ve paid for insurance, even if you’ve had a claim.
Commercial insurance is a worthwhile and necessary investment. That being said, a little goes a long way as a small business owner. Getting some of your premium back is always a welcome addition to your revenue.
You can take that cheque and reinvest it in your business, or use it to support your own employees and family. Whatever you choose to do with it, premium refunds are simply another way that mutual insurance gives back to the community and helps small business owners make every dollar count.
A comprehensive and affordable commercial insurance policy is an important investment for every small business owner.
By supporting your local community, getting the same level of customer care as you give to your own customers and making the most of every hard-earned dollar your business generates, there is no better option for a small business owner than coverage from your local mutual insurance company.
Contact Cayuga Mutual Insurance today to find the right small business insurance plan for your needs and experience The Cayuga Mutual Difference for yourself.