Commercial Insurance: Tips on Choosing the Right Company and Policy

“Commercial insurance” essentially refers to insurance that protects businesses and professionals from any unforeseen circumstance that could affect the business / professionals financially. It’s always a good idea to have some sort of coverage for your business, even if you work from home. A general liability policy at the very least is recommended as it covers businesses for cases like a customer getting injured on the property, someone trying to sue you for medical costs, if your products cause injury, if copyright infringement, and so forth.

General liability insurance is offered by some contractors as a stand-alone coverage through some insurance companies, although it is often combined with property insurance in Business Owner Policies, or BOPs.

Here are a few tips for choosing commercial insurance:

• The best insurance for your business won’t be the same for every business, because each company is unique. It’s best to go through a company that offers tailored solutions, so you won’t have to worry about paying for coverage that you don’t even need.

• Learn about the laws in your area. Where your business is located plays a role in how much money you’ll have to pay. The risks are greater in some areas. What is the minimum requirement for companies in your city and state? How big is your commercial property?

More Tips for Finding Good Commercial Insurance

• One thing to look for is a company that will offer ways to reduce the cost of commercial insurance to ensure that you are getting a competitive price. Some providers actually offer discounts for home-based businesses. You might also be rewarded if you employ good risk management, such a keeping the commercial property clean and hazard-free.

• Keep the terms “named perils” and “open perils” in mind. Open perils coverage refers to protection against nearly every potential loss, except for losses specifically excluded in the commercial insurance policy. Named perils policy, on the other hand, only provides coverage for losses that are specifically INCLUDED in the policy, such as theft, wind, fire, vandalism, etc…

• If you are looking for an insurance broker, make sure that individual knows your industry. The more knowledgeable they are about your specific needs and requirements, the better able they will be to help you get the best possible coverage at a reasonable price. Also, look into a broker’s geographical licensing and operations. Do they align with the regions or states your company operates in?

A good place to begin your search for a good commercial insurance policy is the Hiscox Business Insurance Group. Hiscox Inc is financially strong and offers affordable, tailored coverage in all 50 states.

Understanding the Relationship of Commercial Insurance Clients With Brokers

Multiple types of insurances are available in the market and numerous brokers are in the field today trying to induce prospective commercial insurance clients to go for one of the plans offered by them. However, the relationship between such clients and the broker is something special in nature.

Insurance Coverage Types

As the best possible solution for any financial exigencies, there are multiple types of packages on offer for the prospective clients. Basic insurance policies would offer coverage on life, person, and property of the client. They will cover damages sustained by the policy holder, his or her property, and even others covered under the terms and conditions of the plan adopted. Each of the plans would be different and so would be the coverage offered.

Insurance Claims

One of the basic requirements for any of the clients including those opting for landlord’s insurance is that their claims are quickly addressed. Normally the insurance company will offer cash compensation for the insured in case of any damages sustained physically or property wise. For instance; the insurance offered to the landlords could include the legal as well as repair costs of the property in question and much more.

Online Insurance Brokers

Internet has become an integral part of modern life. Most people wish to conclude all transactions including the insurance deals online. In result a host of insurance brokers are now working online as well providing insurance deals for the prospective clients. While there are multiple types of insurance plans available in the market and the broker deals also vary widely, they take special interest in selling some of the plans that gives maximum profits like the life insurances and automobile insurances. That does not mean they will shrink away from offering landlord or other commercial insurances since every bit of profit earned can add to their wealth.

Low Profit on Business Insurance

Relationship of commercial clients with the brokers may not be as smooth as in case of the life insured or vehicle insurers. The reason is that commissions and profits are not as lucrative in these cases like the other two. However with rapid industrialization all over the chances of making more profits with more number of deals are increasing. This has inspired many brokers to go in a big way for the clients that are commercial in nature and that include landlord insurance packages.

Boosting Brokerage with Commercial Leads

All said and done, in the commercialized environment today, commercial clients of them offer a huge prospect for the insurance brokers. Even though the profits and commissions are smaller in comparison to individual life insurance and automobile insurance, together the profits and commissions earned could be substantial due to numerical strength of such clients.

Commercial Insurance Distribution Channels on the Internet

If you worked for a UK Insurance company just twenty years ago or anywhere else in the world for that matter, you would not have heard the term Internet distribution channel, except perhaps in the idle chat of the IT department boffins and analysts in the company cafeteria.

There were only two main distribution channels, or ways of moving insurance products to the market and the Internet as a serious sales and marketing contender would have to wait another ten years to appear.

At the time, the main channels were the direct channel, which meant producing insurance products that could be sold directly to the public from a call centre, thereby cutting out the costs and expense of managing a middleman, and the broker or intermediary channel.

The broker channel was further sub-divided into insurance brokers, agents, tied agents, consultants, sub-brokers, managing agents for Lloyds and the affinity corporate market.

Both channels offered different propositions for the same products dependent upon the way a policy was sold.

At the time only personal lines insurance products such as car and home insurance were available via the direct channel.

It was also considered that commercial insurance and business insurance were too complicated a product to sell direct over the phone, would take up too much time and would require a bank of approved underwriters with scripts to man the phone lines, as no commercial insurance autoquote systems existed. Consequently nearly all commercial insurance was sold via the intermediary channel.

This dual path situation for the sales, marketing and deliverance of insurance polices continued until Insurance finally became a product that could be bought and sold on the Internet. The earliest offerings around the turn of the Century were for personal lines insurance and there was barely a mention of Commercial insurance, save for the odd contact us button.

Ironically as personal lines insurance developed over the Noughties and became a much larger channel of distribution, the two previous direct and broker channels re-established themselves online, this time in much closer competition.

However both the insurance companies and the insurance intermediaries were caught napping as a new distribution channel emerged on the Internet; the aggregator or price comparison site, and in record time accounted for over 90% of online Internet insurance sales.

The public love to compare prices and the fact that most personal lines products could autoquote without the intervention of an underwriter, meant they could all be aggregated into an online insurance price comparison site, such as we see everywhere in the media today. This is a testament to the comparison sites success as a channel in its own right.

Commercial Insurance in the meantime was still in its infancy as a channel on the Internet, until very recently.

The inertia was mainly due to the reluctance of the large general insurance companies to standardise and autoquote for commercial products. They felt the risk was too high and underwriters resisted the change.

The change came about by market forces as the Broker channel started to sell commercial products using its own web-enabled back office systems.

This meant that online business insurance brokers could collect information about a businesses insurance requirements on a website form, and pass the data to its internal systems. These back office comparison systems are composed of a panel of insurers and providers that provided autoquotes.

Straight through processing to an insurance company could be carried out by the existing EDI or electronic data interchange mechanism.

The single broker business and commercial propositions soon became the target of the price aggregators and the large and now very rich comparison sites, who started to offer online insurance comparisons using broker panels in 2009, which rapidly became popular with small business.

The large composite commercial insurers were forced to respond and last year released a string of autoquote products into the Internet channel including packages for shops, offices, pubs, commercial let property, tradesman, professionals and commercial liability to name just a few.

The fact that it is nigh on impossible to watch television for more than an hour or two today, without seeing an advert for a builders public liability and tools policy from a dotcom is proof that the Internet has finally arrived as a commercial insurance distribution channel.

Commercial Insurance and Commercial Property Insurance

Every time we read the news, an article reporting on a lost property or business is usually found. One such example is the lost and destruction of many establishments in New Zealand due to the recent earthquake that happened to the country. Loss due to causes such as the one that happened in New Zealand can be helped and to a certain extent remedied through the help of a good and reliable commercial insurance policy.

Just by the name itself one may already get an idea on what a commercial insurance is all about. Commercial insurance by its usage is a guarantee given by the insurance carrier against certain damage or loss that a business establishment may experience or undergo due to reasons not their fault. There are actually two basic services offered by commercial insurance companies, these are; liability insurance coverage and the commercial property insurance coverage.

A liability coverage is useful to companies who foresee possibilities of suits or legal actions filed against them. Given the nature of business, those in the food and services sector are the most common clients of a liability insurance, since they the ones who are more prone to suits being filed against them. On the other hand, commercial property insurance offers any business safeguard, particularly in terms of their buildings and other properties in the event that they suffer from loss or damage due to fortuitous events.

As we all know no matter how careful we would like to be or want are employees to be, the hard fact is that accidents and calamities do happen not to mention the existence of people who will not think twice to cause damage to other’s property. Events like fire, vandalism, accidents and earthquakes like the case in New Zealand can really wipe out a whole business due to its possible damage to the building and other properties owned by the latter. These things though unfortunate are part of the things that any good businessman must take into consideration and as such makes the availment of a commercial insurance and in particular commercial property insurance empirical.