The right insurance agent can help
you find the right coverage for your company
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
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
"It's a tried and true way of finding a good insurance
agent, especially one who's familiar with your type of business,"
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
- 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
"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
"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
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,"
"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
"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,
"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