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Before You Choose an Insurance Company

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Choosing an insurance company to provide your business insurance is an important part of your business insurance plan. Once you have chosen an insurance professional, you will need to choose among different policies and programs offered by different insurers.

Here are some things to consider in choosing an insurance company for your business insurance.

Price, Stability, and Service

Price, stability and service are three important considerations in choosing an insurance company.

  • Price: The cost of coverage can vary greatly from one insurer to the next without any difference in coverage. Have your insurance professional secure quotes from at least three insurers.
  • Stability: Insurance companies do fail and the results can be disastrous. Companies are rated for their stability by various rating services such as A.M. Best or Standard & Poor . Consider companies with a Best's Rating of B+ or better.
  • Service: You will want an insurance company with an excellent reputation for customer service.

Registered in Your State

You will want an insurance company with a physical location in your state. You will also want a company that is registered to sell insurance in your state.

Sometimes smaller insurers will sell policies through another company registered in the state. For your business, stay with a company registered and physically present in your state. You can search on your state insurance department website to determine if an insurer is registered in your state.

Choice of Counsel Provsion

Some insurance companies have a choice of counsel provision in their policy that allows the insured to pick their own attorney to defend them in case of a lawsuit. This can be a valuable option and is typically only available for higher premium packages.

Regardless, find out how an attorney is retained to defend you in case of a lawsuit. Some lower value insurers make use of house counsel attorneys that are actually employees of the insurance company. You want the ability to choose your own counsel or be promised that skilled representation from an independent lawfirm will be provided to you.

Pick a Market Leader

The insurance business is one of fluctuating highs and lows in each market. Some insurers will enter markets for a short period of time to determine profitability and leave the market (and their insureds) if it appears unprofitable.

Stay away from market floaters or companies offering a "deal' because they are new to the market. Instead, find the leaders in the market that have stayed in the market for at least ten years. They will not be the cheapest premium. But, such companies typically offer extra services that make up for the extra cost.

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