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How to Choose an Insurance Company

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Owners of small businesses will find themselves in need of insurance services to cover them against risks.  As a business owner, you may be wondering how to choose an insurance company.  Before settling on one service provider, it would be prudent to compare what is on offer. There are several factors you can consider as you compare one vendor to another.

  1. Financial Stability
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You are probably wondering how or where to start doing this.  You do not have to be a financial guru to establish the financial status of any insurance company.  This is because the work has already been done for you by the rating companies such as Moody’s and Fitch.  They apply different parameters in their ratings.  You will, therefore, find that one insurance firm will be rated differently depending on who is doing the rating. For this reason, you should, therefore, consider multiple ratings as you evaluate an insurer.  Insurers are subject to regulations from insurance departments in each state.  The insurance department monitors the financial status of those licensed to offer insurance in their state.

  1. State License
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You will also need to find out if the insurer you want to use is licensed in your state to offer the type of policy you want.  You can access this information from the insurance department website.  You can also get it from the National Association of Insurance Commissioners (NAIC) website. Ensure that the insurer has a license for every type of coverage they offer.

  1. Service
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The quality of service you will get is key as it can break or make your business.  Some of the things you will consider in this area will be on issues of timeliness, courtesy and accuracy. You will find that the quality of service offered differs from one firm to another.  Choose the one that suits you. Find out how these qualities are displayed when the firm is responding to your requests.  Do not compromise on any of these! During the initial contact you may not be able to get a complete picture, but you can play it safe by asking for recommendations from other business owners. Professional organizations, trade associations as well as business groups may be a good source of information on insurers.

  1. Claim Handling
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Before you settle on any insurer, there is one more critical thing you will need to verify – how do they handle the claims filed by clients? This is simple as all you will need to do is to check for complaints filed against the insurer.  Also check any enforcement actions taken against them in the insurance department website. When it comes to payment of claims filed, some insurers may take time to honor their obligations.  Ensure you do your due diligence on this before committing. You can get information from an independent agent on the how the insurer handles claims.

  1. Coverages
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What type of cover are you thinking of? The type and size of business you have will determine the cover you will get.  A business which is highly specialized will need an insurer who is well versed in the industry.  If your company is involved in the manufacture of beauty products you will need an insurer who understands the dynamics of this industry. You should get insurance agents and brokers who understand your area of business to help you get a good insurer who meets your needs.

Now that you know how to choose an insurance company, you can always get in touch with an insurance broker Calgary to work with you through the process.



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