One question we get from small business owners all the time is:
Why do insurance agents ask so many questions!?
We understand their discomfort with this process. Small business owners have to deal with a lot of nosy people. They get invasive questions – usually with presupposed assumptions baked in – all the time about how much money they make, their sales, what their inventory is worth, what they pay their employees, etc. It’s very strange how normally polite people feel so empowered to ask for private details of someone’s life.
When insurance agents ask all those questions, it’s actually for a very important reason. Weunderstand that our questions might get an owner’s defenses up. Whether they think we’re in the nosy crowd, or that we’re trying to sell them the highest priced insurance products, they don’t always enjoy the quote process. Our agents have been doing this long enough to start our quote conversations by explaining why we’re about to ask so many questions.
Insurance Only Protects What It Actually Covers
It’s not surprising that business owners want to keep their insurance premiums as low as possible. In their quest for affordability, however, they could be setting themselves up for a much bigger expense if they ever need to file a claim.
Commercial insurance policies are written and priced based on the value of the business, property, and inventory. They also take the type of business, location, and other risk factors into account. If an agent simply offers the option with the lowest premium, the business probably does not have enough coverage for an actual loss. Not only would the owner end up paying out of pocket to repair their property or deal with legal and medical expenses, but they might also be fined by the insurance company itself for not having the right limits in their policy.
The purpose of asking way too many questions is so that we can make sure the policy we deliver is one that provides real financial coverage for the business. Once we have a clear picture of everything the business owns, how it interacts with customers, and how it operates, we can present a range of options for the owner to review. Only then does the business owner really have enough information to choose their policy. They can still go for the lowest realistic premium, but they’ll do that with an understanding of what they can expect to pay out of pocket in a claim.
Uncovering Discount Eligibility
The insurance industry offers a variety of discounts and incentives to businesses that proactively lower their risks. These discounts might be based on specific employee training, on-site safety or security equipment, or building features.
It’s very difficult to discover all these discounts unless the owner is working with an experienced agent who knows what to ask. Insurance agents who work with a lot of small businesses, especially locally, are particularly good at finding all of the available discounts. It helps to work with someone who has covered similar businesses in the same area for many years.
During the course of conversation, an insurance agent might make some recommendations that will help the business qualify for discounts on their renewal. By keeping an open line of communication with their agent, business owners can save a lot of money on insurance over the years. Of course, when they do have a claim, their agent already knows their business well enough to help them figure out the next steps.
Changes in Business Mean Changes in Insurance
The initial questions phase is always the most detailed when starting with a new insurance agent. But it’s not the end of all the questions. Business owners need to review their commercial policies with their agent every year.
In these annual reviews, the agent will ask about building changes or upgrades, new equipment, removed equipment, increases or decreases in inventory, or changes to the actual products and services. All of this information is important for the same reasons we’ve already addressed. An insurance policy only works if it is written for how the business actually operates. While agents will typically reach out once a year, owners should reach out anytime there is a big change in the business.
If you are a shopping for insurance for your small business for the first time, or this article has made you realize you might not be fully covered, contact us for an initial quote. Smyrl Insurance has been supporting small businesses in Montgomery and Bucks Counties for over 65 years. Chances are, we know a lot about your industry already, and we can help you identify and understand your insurance needs. Our goal is to educate, nurture, and empower small business owners through insurance so that they can grow with confidence that their hard work is being protected. We are proud to provide commercial insurance to owners of hair and nail salons, mobile repair services, bake shops, retail stores, manufacturing shops, and trade providers throughout the region.
