Often times, when a business is starting up, the policyholder simply chooses an online carrier that offers a quick quote just so they can obtain a Certificate of Insurance (COI). The policyholder answers a series of questions, checks off the coverages they feel they need, and that’s that – they’re covered. Not exactly.
The policyholder would always benefit from working with an insurance broker who specializes in their industry and is capable of representing multiple insurance carriers for their industry sector. A good independent insurance agent can help guide the business with proper coverages when they first get the business started, and eventually through business growth and expansion.
We have come across businesses who have their Workers Comp insurance with a non A.M. Best rated insurance carrier, this could lead to the carrier defaulting (basically their liabilities exceed their premiums). In other cases, we’ve seen certain exclusions of coverage for specific operations which might be paramount to the insured’s business. For example, some Professional Liability Home Care carriers exclude Pediatric services, Live-in care, tracheotomy care, and other such skilled nursing services. In other cases, we’ve seen an insurance carrier limited to writing insurance in select states, and if the policyholder has serious plans of expanding their business, they may want to match up with the right carrier now so they are not scrambling for coverage at the very last minute.
At the end, you want to work with a knowledgeable insurance agent, they add real value to your business. At the end of the day, if you don’t have proper guidance, you may think you have cheap insurance, but really, it’s just a very expensive piece of paper that won’t protect you in the event of a claim.