How to Choose a Commercial Insurance Provider: What You Need to Know


The composite rate for US business insurance rose in the fourth quarter of 2022 by 5.1%. This additional expense might seem like too much for your fledgling or struggling business to bear.

But you will be glad you have the policy in place when the need for it arises, for example when you are sued by a customer or when your employee is in an accident.

It’s easy to choose a commercial insurance provider if you keep some tips in mind. Keep reading to learn more.

1. What Kind of Insurance Do You Need?

When you are searching for home insurance, it’s easy because there’s just usually just one or two kinds to parse through. But a commercial insurance policy is much more complicated, with lots of different kinds and types to choose from.

For example, if you deal with a lot of outside companies like suppliers, vendors, etc., then you will want to get general contractor insurance.

If you have equipment units or vehicles that are quite valuable and you wish to protect them from intruders, theft, or damage, then you will want to buy property or vehicle insurance. Intellectual property will require a different kind of commercial insurance policy on it, which includes trademarks and patents.

Insurance for farms is quite dissimilar to insurance for tech startups.

As you can see, you will need to do your research before buying commercial insurance. If you aren’t sure about what kind of insurance to get, then a commercial insurance provider should be able to help you out with that decision.

Also, when you are choosing a commercial insurance provider, pick one that will have the type of insurance you are searching for. There’s no point otherwise.

Another point to keep in mind – you don’t need to overinsure your business. Some providers might advocate for this, but it’s not necessary. Get just enough insurance to give you peace of mind and protect your business – that’s all.

2. What Qualifications and Certifications Does the Provider Have?

Don’t pick the first commercial insurance provider that shows up on your Google search. There are many insurance companies out there, so you will want to cull through them. One criterion you can use is what qualifications, certifications, and other awards the company has.

This might be evident by visiting their website or when you browse through their sales brochure. They might even boast about awards received in the past year when you have a conversation with them.

Don’t discount companies that don’t have awards, but do discount those without the right qualifications and certifications.

3. Reading Online Reviews Is a Must

You are not the first one who is purchasing a commercial insurance policy, so there’s no need to reinvent the wheel. Why not look through online review sites like Google and Yelp to see what previous and current customers say about the various insurance providers on your shortlist?

This will give you an idea of what the insurance terms and conditions are like for certain providers, if it’s easy or difficult to put in claims through them, and other pros and cons of doing business with them.

If a certain provider has too many negative reviews, then it might be best to stay away from them. On the other hand, if a provider has only positive reviews and no negative ones, then they might have paid for these positive ones, and it would be good to be wary of them as well.

Remember not to rely solely upon the reviews the insurance provider has on their website since they are biased and not necessarily based on reality. An independent review agency is the best way to go.

4. Don’t Be Afraid To Negotiate

Remember that you are the one in control here, not the insurance provider. So if you feel like the policy is too expensive, or if the insurance terms and conditions aren’t favorable enough, then feel free to negotiate with them.

They want your business, and they will do what they can to ensure you are happy. Take advantage of this by asking for a better price or better terms.

Don’t let them get the upper hand. If the insurance provider refuses to negotiate with you, then don’t feel pressured to sign the contract. Take a step back and take your time making the decision.

Also, don’t let the insurance provider exaggerate any factors like value, age, level of hazard, and reputation. You are a discerning business owner, and you got this far, relying upon your know-how and knowledge. Use these critical thinking skills to gauge if the insurance provider is being far-fetched or not.

Remember it’s their job to make profits. Yes, they want to sell you an insurance policy but at what cost to you? You have to protect your business interests since they won’t do this for you.

There’s no need to be ridiculous when negotiating, but a bit of haggling on your insurance premiums should be acceptable.

5. Ask About Scaling Up Your Insurance

When it comes to purchasing a personal insurance policy, signing a long-term contract is fine because circumstances don’t change that much over time.

But commercial insurance policies are different. Six months or a year is far too long since things can change quite a bit in that time.

Your business might do quite well and hire hundreds of new workers. Or it might do poorly and have to let go of a bunch of employees.

That’s why you want the ability to purchase an insurance policy that’s scalable up or down. If your circumstances change, your insurance policy should be flexible enough to change with you. Make sure to speak to your insurance provider about this and add these stipulations to your insurance policy before signing anything.

If they seem unwilling or uninterested in providing a scalable commercial insurance policy to you, then walk away and find some other provider to work with.

6. Independent Brokers or Not?

Many new commercial insurance providers are popping up due to the viability and lucrative nature of this business. You might imagine that it’s best to deal with insurance providers that have been in the business for decades.

But that’s not always the case. If you are a newly minted business or startup and your budget for insurance isn’t as high, then you might want to go for an independent insurance broker. This is because independent insurance brokers are more eager to get your business and might end up giving you a better deal on your insurance policy.

They might be more willing to negotiate on insurance terms and conditions as well, which will work out in your favor. Finally, they don’t have any affiliations with a particular insurance company or brand, so they can give you advice on which policy to purchase without any bias.

They don’t get paid on a commission basis, so they don’t have any interest in selling you a particular insurance policy. All they want to do is sell you the best insurance policy for your specific needs.

7. Shop Around for the Best Deal

Comparing insurance costs is mandatory when it comes to purchasing commercial insurance. This is because commercial insurance policies are much more expensive than personal ones.

If you are going to spend thousands on purchasing an insurance policy for your business, you want to ensure that you negotiate hard and shop around for the best deal out there. Even saving a few hundred dollars on your premium annually is a huge deal for a business where every penny counts.

Don’t let an insurance provider pressure you into purchasing a policy with them. There’s no need to rush through this decision. Take your time, cull through all your options, and then pick the best one based on all your criterion.

Even if the first insurance provider you came across seems like the best fit, it’s still a good idea to shop around a bit before settling for your first choice. This will give you peace of mind that you picked the perfect insurance provider for your business.

Choose a Commercial Insurance Provider That’s Best for You

It’s a good idea to get recommendations from friends, family, or other business owners when you are looking for a commercial insurance provider. But remember that every business will have its specific needs when it comes to insurance coverage, and their needs might not fit with your business requirements.

That’s why it’s paramount to do your research. This way, you can choose a commercial insurance provider that’s ideal for your business, whatever it might be.

If you found this article interesting, browse through related blog posts on our website and keep learning.

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