The right insurance agent can help you find the right coverage for your company
Fourth in a five-part series: Building your team
By Sue Kovach • Bankrate.com

Buying business insurance is no longer as simple as signing up for theft, fire and liability.

A knowledgeable insurance agent is a vital part of any business owner's team. A good agent will help business owners navigate -- and try to understand -- a bewildering maze of complex insurance coverages.

How can you find a good insurance agent who will get you the right coverage for the right price, and help you for years to come as your business grows? Networking with other business owners is a good place to start, suggests Robert P. Hartwig, vice president and chief economist of the Insurance Information Institute.

"It's a tried and true way of finding a good insurance agent, especially one who's familiar with your type of business," he says.

Different agent search methods
More ways to find an agent include:

• State or national trade associations for businesses like yours. They often have referral lists or agents as members. These agents will know your type of business and its unique risks. Says Hartwig: "It's easier to work with someone who understands your business and can anticipate your future needs as you grow and expand."
• Try someone you already know -- your consumer insurance agent may handle business products, or refer you to the right person within their company. By staying with a company you already do business with, "You may save some money right off the bat. Plus, you already have the trust factor," says Kenneth Jillson, executive vice president of Insure One Commercial Insurers in Oak Brook, Ill.
• Local networking groups, such as your Rotary club or chamber of commerce, provide social opportunities for you to meet agents and determine if you can work with them. Says Hartwig: "You want to be comfortable that this person is going to treat you fairly, especially if you need to file a claim. You may want to get several proposals for coverage from different agents, then compare both the proposals AND your impressions of the agents."

Company reps vs. independent agents
Both company representatives and independent agents have advantages. Independents may be more familiar with placing unusual risks, such as covering skydiving operations. They also provide more company choices.

"Insurance companies aggressively seek certain types of businesses to insure, then within a few years, they raise rates and move on to other types of business," says Jillson. "A good independent agent will move you with a stable of good companies who for that period are aggressively seeking your kind of business."

Ideally, your insurance agent will be a key member of your business team for a long time. From the beginning, and as your business expands, the agent should be asking YOU the right questions.

"A qualified agent will review with you a list of coverages that, through their experience and education, they would feel you need or may need," Jillson says. "You would pick and choose from that list."

A good agent also keeps on top of your growing business needs.

As you add employees, stock more inventory or buy more equipment, you'll need more coverage. You may appreciate a call once a quarter from your agent to keep your coverage current. You'll also want to be kept informed regularly about new products, such as insurance against loss due to computer hackers -- a necessity for those doing e-commerce.

"Companies are now tying up less wealth in bricks and mortar and putting more in bits and bytes," says Hartwig. "This requires innovative new insurance coverages."

Know your specific insurance needs
From the start, you need to research your insurance needs and know what questions to ask, cautions business owner Elizabeth Mason of West Hollywood, Calif. Her experience with the wrong agent could have led to financial disaster for The Paper Bag Princess, her store specializing in high-end designer clothing, antiques and vintage clothing.

"I assumed I was fully covered for a retail operation," says Mason.

"But the agent, a referral from a friend, sold me a policy that did NOT include burglary or even glass breakage! During an expansion, I was burglarized." It was a $20,000 loss.

Mason says an agent should always check to see if your insurance needs have changed, particularly if you increase your inventory.

"This is very important," she says. "I started with $13,000 in inventory and now have well over 10 times that. I didn't know at first that I needed to increase my coverage regularly."

Mason is now happy with a new agent.

If you're not happy, take your business elsewhere, advises Hartwig.

"The agent business is very competitive. Audition a couple of agents," he suggests. "Tell them why you're not pleased with your current agent, what your business circumstances are and what you're really looking for in an agent. They'll be happy to look at you as a potential purchaser of insurance."

Sue Kovach is a freelance writer based in Florida.

-- Posted: Dec. 16, 1999