An insurance broker (or bank or other agent selling insurance) is essentially the buffer between you – the business owner – and the insurance companies during the policy-purchasing stage
You should take as much care in selecting them as you would any resource that can make or break your small business. I’ve found that the best way to find a reliable broker is by personal recommendation – talk to fellow business owners.
After earmarking potential candidates, meet with them to discuss your insurance needs. Based on their input and responses to your questions, select the one in whose hands you are most comfortable placing the responsibility for your insurance coverage. Keep in mind that with financial institutions and agents, you’ll probably forego the advantage of comparative shopping that independent brokers offer.
Usually the broker’s service doesn’t cost you a penny – they are remunerated by the insurance company with whom your business is placed. But therein lies a potential conflict of interest, and further reason to select carefully.
Before meeting with your broker, it pays to do some homework to determine the various forms of coverage your small business should have. List all the insurable losses your business could possibly incur. Not only will this assist your broker in the event that they have overlooked any potential insurable losses, but it will also raise your awareness and deepen your understanding of the risks attached to your business.
Once you’ve purchased your policy, prepare for a possible claim by keeping a record (photographic or otherwise) of all the possessions in your business. An insurance claim often follows a traumatic event such as a fire or flood. Recollecting events and details of items lost can be difficult in a stressed state of mind.
Review your policies annually as a matter of routine. A business’s circumstances can change over time and insurance coverage can be found wanting when disaster strikes.
When preparing a claim, prepare it properly. Prepare it so completely and in so much detail that it leaves very little room for questioning or criticism. Your aim should be to minimise the usual to-and-fro claims process and effect timely settlement. Be completely honest about the circumstances of the event and the extent of the damage and losses.
Neglecting your business insurance either through a poor choice of broker or failure to ensure your coverage is current could break your business. It’s not worth the risk.
Michael Best is a print industry veteran, accountant and author of Characters Who Can Make Or Break Your Small Business. Through 39 characters, Michael covers all aspects most small business owners can expect to encounter in the life of a business from inception to disposition. It is available from Amazon and www.smallbusinesscharacters.com