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PROTECT YOUR BUSINESS

Your Ultimate Guide to Finding a Small Business Insurance Policy

5-minute read

Mariah Bliss

Mariah Bliss

25 August 2020

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Business insurance: It’s necessary, provides serious peace of mind, and can be a huge pain in the you-know-what to buy.

This might sound like a shocking confession, especially considering this article is hosted on a small business insurance site. But here’s the deal: If you’ve ever shopped for business insurance before, you know it can be an intimidating and, quite frankly, confusing process. How do you know what coverage to buy? Why are there so many different coverage levels? And why does it feel like business insurance is spoken in another language?

Don’t worry, I’m here to help. Check out my top 10 dos and don’t for buying a business insurance policy.

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Here’s How to Buy Small Business Insurance Without Tearing Your Hair Out

Talk to folks in your industry.

One of the best ways to find out what kind of business insurance you may need is to talk to other people who work in the same industry as you. Know a landscaper and you’re thinking of starting your own lawn care business? Awesome, talk to them and see what business insurance they recommend. Want to start an accounting business? Find some accountants in your area, give them a call, and ask what policies they have.

You may be surprised at how open people can be about what they use for business insurance!

When asking about what policies they hold, try to get a better feel for what their insurance experiences have been. For example, if a few people in your industry have had a TERRIBLE experience with one provider, you may want to avoid doing business with that insurance company.

See what small business insurance trade associations recommend.

This advice is pretty similar to the first step, except it can be used if you don’t really know anyone else who owns a business in your industry. Trade associations - whether on a national or state level - open up a network of people who will not only recommend business insurance products for you, but can also help you with other questions you might have about insurance when it comes to starting and running your business.

Want to join one? Check out this comprehensive list of national trade associations.

Do a risk assessment of your business.

I highly recommend doing a risk assessment of your business before searching for insurance. It sounds a lot more complicated than what it is, which is basically just figuring out the most common types of liability and risks you face in running your business.

For example, if you’re a plumber, there’s a good chance that accidentally flooding a client’s home is a pretty realistic risk. That means you’ll need insurance coverage that can help pay for property damages caused by this accidental flooding (general liability insurance can help here).

As another example, if you’re a tax preparer, a common risk may include making an error on your customer’s tax forms, resulting in their having to pay tax penalties. In that case, you should consider buying a small business insurance policy that protects you from customer accusations of negligence, like professional liability insurance.

Risks aside, if you have any employees (even if they’re part-time), your state may require you to have a workers compensation policy.

Set aside time to make your insurance purchase.

It’s easier than ever to buy small business insurance these days, but it’s still worth carving out an hour or two from your day when you’re ready to purchase your policy. When I bought a policy for my own business a few years back, I made a point to have all my business details around me, a list of a few providers I wanted to check out, and a set goal of how much I wanted my policy to be.

I definitely felt over-prepared, but having all my business details out in front of me really helped speed up the buying process (more on this in a bit).

Setting up dedicated time to buy insurance isn’t exactly going to be the most exciting thing in the world, but it ensures you won’t end up making any casual mistakes on your policy coverage.

Gather up your business details.

Okay, so you’re ready to start shopping around for business insurance. No matter where you decide to start, you’re going to be asked for the same basic details about your business. These include:

  • The number of employees you have
  • How much revenue you make each year (or an estimate if you haven’t started your business yet)
  • Your payroll (even if you’re just paying yourself)
  • Where your business is located
  • The specific services your business provides

Each insurance company asks different questions, but you can usually plan on needing to provide the above info to get a policy quote.

Get as many quotes as possible.

If you’re looking to find an affordable insurance policy that gives you the right coverage for your business, it’s important to get as many quotes as you can. Insurance companies want to compete for your business, so now’s your chance to figure out what they’re offering you.

It might be tempting to jump at the first quote you see, but gather up as many quotes as possible so you have a better idea of what’s out there.

Want to save some time jumping from insurance site to insurance site? Try out our cool quote comparison tool! Just enter a few details about your business and we’ll provide you with quotes from providers who can provide you with small business insurance coverage.

Resist jumping at the lowest-priced policy.

Ever wondered why the prices of business insurance policies vary so wildly? It has nothing to do with you, but everything to do with how business insurance companies work.

Basically, some insurance providers have different appetites for trades than other providers. This simply means that a policy provider is more comfortable covering certain businesses or just has more experience with them, so their policy prices will usually be cheaper than a provider who doesn’t usually cover those trades.

For example, if you run a landscaping company, you may find that some insurance companies may offer you more affordable policies because they’re super-experienced working with landscapers and lawn care services.

Still, before you jump at that affordable policy, make sure it gives you enough coverage. You don’t want to find out the hard way that you weren’t properly covered!

Verify that you’ve picked the right coverage.

Before you buy that policy, take a couple of minutes to verify that it’s really going to protect your business. Ask yourself these questions:

  • How much coverage does this policy give me?
  • Is this coverage appropriate for the work I do?
  • How long does my policy last for?
  • Am I sure that it covers all of the services I provide?

If you’re not sure if you have the right coverage, check out the next step...

Talk to an online or live insurance agent.

Most insurance agencies have some form of in-person support who can help you if you have any questions about your policy quote or purchase. Don’t hesitate to pick up the phone and call them!

Here at Simply Business, our Customer Solutions Center is made up of licensed insurance agents who know everything and anything about insurance policies. If you want to get quotes through us and have any questions, they’re here to help!

Don’t be afraid to shop around.

This applies to both new businesses and owners who already have a few years under their belts. Shopping around is still one of the best ways to save on business insurance, so don’t immediately jump on one policy provider out of convenience. Check around to see what prices and coverages you can get, as you never know what you might find.

Mariah Bliss

Written by

Mariah Bliss

I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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