Is Your Company's Insurance Policy Meeting Your Needs? A 4-Step Process to Achieve Success

If you run a small business, chances are high that you don’t have an in-house insurance policy specialist to help you keep your organization insured. Even with the best of intentions, often we end up paying premium rates for services that don’t meet our insurance needs as well as reduce costs through mechanisms like insurance aggregation or group insurance. As a small business owner, you probably do not have the time or resources to find and vet all the different insurance options available to you. That is why it is important to hire a third party broker to assist you with finding and negotiating the right policies on your behalf. So how do you go about hiring the right broker? Let us take an overview of some key considerations before approaching any potential candidates:

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What is an insurance broker?

An insurance broker is a person or company that helps businesses get all types of insurance. Insurance brokers can help you with any type of insurance, including healthcare, life, property, auto, workers compensation, and more. If you need insurance coverage for your business, a broker can help you find the right policy at the right cost. Some brokers work exclusively with insurance companies and some work with both insurance companies and brokers. Some insurance brokers work exclusively with employers, while others provide services to both employers and individuals. Some insurance brokers specialize in a type of insurance, while others are more generalists. The best brokers know their industry and can find you a policy that fits your needs. Some brokers are full service and subcontract with insurance companies, while others provide only administrative services. Make sure you find a broker that fits your needs and budget.

Know what you want before you start looking for a broker

Even though hiring an insurance broker may seem like a simple task, it is important to know what you are looking for. The first step is to define which types of insurance you need for your business. Get a clear understanding of what you want your insurance policy to cover. You may be surprised to find that your ideal policy does not exist in the market. While insurance brokers are generally helpful, each type of coverage is typically underwritten by a handful of companies, each competing fiercely for your business. Understand what types of risks you face as a small business owner. There are many types of risks that a business can face. Before you start searching for a broker, make sure to define which types of insurance you need for your business. Most brokers are flexible, and will work with you to create a custom policy that meets your needs.

Why is insurance an important topic for small business owners?

If you own a small business, you are undoubtedly familiar with the challenges that come with operating a successful enterprise. From hiring to retaining employees to keeping up with day-to-day operations and finance, these are all very real challenges faced by every business owner. It is no wonder that so many owners have turned to insurance brokerage as a solution to these issues. Yet many of them don’t truly understand the benefits of insurance brokerage. From a financial standpoint, insurance brokerage provides several benefits that many business owners fail to recognize. If you are one of these owners, you stand to benefit greatly from hiring an insurance broker. First, insurance brokerage helps you get the right coverage at the right price. Many small businesses assume that they can’t afford certain types of coverage, or that their existing coverage is sufficient. In reality, the way a business is structured can have a dramatic effect on the cost of coverage. A large, highly-insured company can often provide the same coverage that a small business owner can afford.

What do insurance brokers do?

There are many things that an insurance broker does for their clients, but here are some of the most common. - Defining coverage - Before an insurance broker can begin negotiating a policy, he or she will work closely with their clients to understand exactly what is required to meet their coverage needs. - Underwriting - After the broker has defined the coverage, they will review the application and determine whether or not the client is eligible to receive the coverage they are requesting. - Contract Negotiation - After the broker determines what the client is eligible to receive and what the client’s policy limits should be, they will begin negotiating the terms of the contract with the insurance company. - Service Continuation - Once the contract is signed, the broker will make sure that the client experiences excellent service from the insurance company. - Contract Termination - If the broker has done a good job, the client may decide to terminate the policy at any point. This is important to remember, especially for business owners who are planning to close their operation at the end of a given period of time.

Key questions to ask when hiring an insurance broker

The best insurance brokers will be able to tailor their services to your specific needs, so it is important to ask about the types of services that are important to you. Some good questions to ask when hiring an insurance broker include: What services will you provide? What type of coverage do you offer? What is your service availability? What is the fee for each of those services?

Conclusion

The insurance industry can be complicated, and brokers may not be able to offer you a comprehensive overview. But with careful research and a bit of legwork, you can find an insurance broker that can help you meet your insurance needs. At the end of the day, your business is at risk of many different types of events, and you need to be covered for these events. To get the best deal on insurance, you should hire an insurance broker who has experience working with small businesses.

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