Business insurance is essential for all businesses, but certain companies and independent professionals should seek the services of an insurance broker. Brokers evaluate businesses to determine what types of insurance are needed and how much, and they recommend specific liability insurance as it applies to the professional classification or sector. They also regularly review their clients’ insurance strategy to ensure adequate coverage is in place in response to business growth or change.
Every business model must include provisions for business insurance. The insurance needs of many small businesses can sometimes be met satisfactorily by an insurance agent in terms of administrative performance. However, certain companies and independent professionals should seek the services of an insurance broker. This is due to the fact that business insurance brokers generally have more knowledge of the insurance industry, are licensed and adhere to higher standards, and their responsibilities go far beyond pushing paperwork between the client and the insurance company. Indeed, business insurance brokers carefully evaluate businesses or independent professionals in order to determine what types of insurance are needed and how much.
The first thing most brokers do is conduct a thorough appraisal interview with the professional or representative of the organization being insured. In addition to examining the nature of the services provided, commercial insurance brokers are also concerned with potential liability risk factors that may be associated with these services. At a minimum, most business insurance brokers recommend professional indemnity insurance, which benefits both the business and its customers. For example, if a liability claim arises for injury or damage, this type of insurance ensures that the client will be adequately compensated while protecting the professional or business owner’s personal assets. Likewise, if the business involves selling products, most insurance agents will suggest product liability insurance.
Business insurance brokers also look at the number of people employed by the company, as well as the number of vehicles being driven or pieces of equipment operated by those employees. While these are central factors in determining the amount of liability coverage you need, they become significantly more important when different employees consistently operate different vehicles or machines on site or on external customer property. Expanded vehicle insurance is also an important consideration when an independent professional or home-based business owner routinely uses his or her own vehicle for business purposes.
A particular specialty of commercial insurance brokers is recommending specific liability insurance as it applies to the professional classification or sector. For example, customers involved in providing medical or other health-related services are generally advised to obtain malpractice insurance. Those providing services on third party property may need completed operations insurance. Additionally, most brokers strongly encourage independent professionals, including anyone conducting a home based business of any kind, to purchase disability and business interruption insurance in the event that trading activity ceases due to personal injury, illness, fire, flood or other natural disaster.
Of course, there are several advantages to consulting a broker over an agent when it comes to obtaining commercial insurance. Depending on the type of business or service provided, this could be as true for small businesses as it is for larger companies. A final bonus is that brokers regularly review their clients’ insurance strategy to ensure adequate coverage is in place in response to business growth or change.
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