8 tips to help you choose the best small business insurance

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8 tips to help you choose the best small business insurance

With so many options, researching small business insurance, companies and quotes can be daunting for busy small business owners. And NEXT has done the work to help you find affordable rates, comprehensive coverage and reliable service.

Keep reading to learn how to evaluate small business insurance companies and choose the best—and most cost-efficient—policies and coverage for your needs.

When selecting an insurance provider, this is what to look for to help you get the best coverage and support for your business:

1. Look for companies experienced with small businesses

Choose a provider with a proven track record serving small businesses.

Specialists in small business insurance tend to have straightforward underwriting, easier self-service tools (since you’re busy) and more affordable pricing to help you get the right coverage without waste.

Insurers focused on enterprise solutions may not offer the flexibility or personalized service a growing small business requires.

2. Seek out flexible and scalable policy options

Have you ever had a car salesperson try to sell you every feature under the sun? That’s what it can feel like to buy from some insurers. Their policies can force you to overpay for unnecessary protections you don’t need.

Look for a provider with customizable coverage to avoid wasted spending.

Also, work with a company that can grow with your insurance needs as your business expands with more employees, new locations or services.

3. Get always-on access and self-service tools

Small business owners don’t have time for the delays of traditional insurance, which often requires time on the phone or in an agent’s office.

Insurance companies have struggled to meet modern customer demands for speed, access and self-service. Agents constrained to office hours used to be a necessity to handle even the smallest tasks—which could take days or weeks to complete.

Look for an insurance provider that gives you tools to quickly find what you need, including:

• Simple web access and mobile apps for managing your policy 24/7.
• Instant quotes and online purchase options.
• Scalable coverage you can update as your business grows.
• Instant proof of insurance you can share in multiple formats for contracts and clients.
• Claim filing and tracking in real time.

4. How’s the customer service?

The best small business insurance companies provide responsive, knowledgeable support.

Evaluate an insurer based on how easy they are to reach. Can a chatbot solve your problem quickly? And if you need to elevate your request to customer service, can you get someone to respond with the right information?

Are policies, exclusions and details clearly explained? Or is their insurance information riddled with jargon? Does the provider offer resources with simple answers?

And lastly, what do other small business owners say about their services on review sites like the Better Business Bureau, Trustpilot and Google Reviews?

5. Look for fast and easy claims processing

Research how quickly and efficiently the insurance provider processes claims.

First, what kind of information does the company provide before you’re a customer? Do they tell you what the claims process looks like? Do they give clear, simple instructions for filing a claim when things go wrong?

Look for insurers with online claims tracking to reduce paperwork and speed up processing. They should also have transparent timelines through an online customer portal, mobile app or text messaging to keep you informed of your claim status.

6. Read insurance company customer reviews and ratings

Read reviews and industry rankings to learn how an insurer handles claims and disputes.

Industry rankings compare the best insurance for small businesses based on expert analysis. Unlike customer reviews, which may be subjective, these articles offer professional evaluations and data-driven comparisons.

7. Research the financial stability of your insurer

An insurer needs to have the resources to pay claims, especially during a large-scale disaster or economic downturn. If a company is financially weak, it may delay or deny claims, raise premiums or go out of business—leaving policyholders holding the bag.

Check financial stability ratings to help ensure your insurance company is reliable. If they’re a publicly traded company, their stock performance and earning reports will spell out their profitability and claim payout ratios.

8. Weigh out your small business insurance cost vs. value

For many business owners, the best small business insurance will always be the cheapest. But if you’re paying a low premium but not getting the protection you need—what’s the point?

Small business owners should weigh more than just cost against value because the cheapest policy isn’t always the best.

When evaluating which coverage to buy, some factors to compare include:

• Premiums
• Deductibles
• Coverage limits
• Exclusions
• Discounts for policy bunding and safer business practices
• Free and included services (such as proof of insurance)

The best affordable small business insurance should provide right-sized financial protection at a fair price. And it should cover essential risks without hidden gaps or excessive add-ons.

Bonus: The best small business insurance by industry

Choose a provider that understands the unique risks, challenges and regulations around your industry — and tailors their coverage accordingly.

The best business insurance for retail and online retail

The best retail insurance providers often offer bundled policies to cover liability as well as your inventory and business fixtures. Look for BOP Insurance (Business Owner’s Policy), which combines general liability insurance with commercial property insurance, often at a lower cost.

Other important coverage for retailers include:

• Business income insurance. This coverage can help protect against lost income if a covered event, such as a fire or a burst water pipe, forces your store to close temporarily.
• Product liability insurance. This type of coverage can help with legal allegations around defective or harmful products that you make or sell.

The best business insurance for restaurants and food service businesses

The best insurers for restaurants, catering and food businesses offer tailored policies and industry-specific risk management, including:

• Liquor liability insurance. Consider this policy if your business makes, serves or sells alcoholic beverages. It can help protect you if one of your intoxicated customers causes damage or bodily injury after being served at your business. 
• Food contamination and food spoilage insurance. This coverage can help cover some spoiled food loss. It could kick in after a power outage, equipment failure or a product recall.
• Product liability insurance. In the event of a claim around foodborne illnesses or allergic reactions caused by the food you’ve served or sold, this coverage could help. 

The best business insurance for cleaning and janitorial services

Cleaning businesses need protection for general liability if they cause damage to a client’s property or if a nonemployee gets hurt slipping on a wet floor.

In addition, they may also need:

• Workers’ compensation insurance. Workers’ comp is required in most states if your business has employees. And many clients prefer for their cleaning company to carry this coverage before they’ll work with them.
• Tools and equipment insurance. If you travel with expensive cleaning equipment like carpet extractors, pressure washers and floor buffers, this policy can help cover their repair or replacement after theft or damage up to your policy limits.
• Commercial auto insurance. If you’re racking up miles between jobs, this insurance could help cover company vehicles or employees using their own cars for work-related travel.
• Janitorial bond. A type of surety bond that can help protect you, employees and clients from allegations of theft, dishonesty or property damage.

The best small business insurance for offices and professionals

Professional service businesses—such as consultants, accountants, real estate agents, IT professionals, and legal professionals—face unique risks related to client disputes and data security.

On top of general liability insurance for basic coverage and commercial property insurance for your building and business gear, the following specialized coverage options could be an asset to your business:

• Professional liability insurance. Sometimes referred to as errors and omissions insurance (E&O insurance), this coverage can help with claims of negligence or mistakes in professional services that cause clients a financial loss.
• Cyber liability insurance. This protection for businesses handling sensitive data could help cover losses related to data breaches, cyber attacks and compromised IT infrastructure.

The best small business insurance for construction trades and contractors

Construction businesses face high-risk work environments and various legal and financial liabilities, making industry-specific coverage essential.

General liability (often required for licensing or starting your own business) and workers’ compensation insurance are just the beginning in this field. Other key policies include:

• Tools and equipment insurance. Learn more about this coverage for the repair or replacement of tools and gear that are lost, stolen or damaged.
• Commercial auto insurance. This can help cover injuries or damage from work-related vehicle accidents.
• Builders risk insurance. Consider this to help protect buildings under construction, including materials, fixtures and equipment onsite before project completion.
• Contractor license bonds. While not the same as insurance, bonds can help provide recourse to customers if a contractor fails to fulfill a contract for a job.

This story was produced by NEXT and reviewed and distributed by Stacker.