Insureon Blog

Decoding Your Small Business Insurance Quotes

12. December 2014 07:47

man using a magnifying glass

As you may know, it’s pretty easy to apply for insurance quotes. But what about when you get the quotes? What do all those numbers mean? Never fear. You don’t need a Rosetta stone to decode your quotes – just some friendly tips so you know what you’re looking at. In this article, we’ll cover…

  1. The details your quotes include.
  2. How to compare prices.
  3. Payment options.
  4. Why it’s important to understand that quotes aren’t final.
  5. The various company names you’ll see on quotes.
  6. The benefits of starting coverage immediately.

1. Details in Your Quotes: Beyond Price

This is where you should spend the most time comparing policies. The policy with the lowest premium isn’t necessarily the best.

Each quote tells you what kind of policy you are looking at and what kind of coverage it offers. For instance, your Business Owner’s Policy quote may break down your coverages and their accompanying limits like this (minus the explanations):

Liability Coverage: Bodily Injury and Property Damage

Property Coverage: Your Property and Your Client's Property in Your Possession

If this particular policy costs $635 or so in annual premiums, you can see that you’re getting a lot of bang for your buck. You even get some Cyber Liability protection thrown into the mix – no small beans for a business operating in the time of data breaches galore.

Your quotes might also include concise explanations of whether the policy meets the requirements in your client contract (if applicable). For example, you might see something like, “Meets contract requirement for Commercial General Liability Insurance.”

Lastly, here are some key words you’ll need to understand when looking at policy limits and coverages:

2. How to Compare Quote Prices: Apples to Apples

If you’re shopping around for General Liability Insurance, you may receive quotes for both Business Owner’s Policies (which bundles GL, Property Insurance, and other policies together) and standalone GL policies. You’ll want to be sure to compare BOPs to BOPs and standalone GL policies to other standalone GL policies.

If you want to know the average premium for a policy in your industry, take a look at our page, "How Much Does Small Business Insurance Cost?" Here you'll find data we've gathered from the thousands of small businesses we've already insured. 

But even if you are comparing the same types of policies, don’t assume they all offer the same coverage. Coverage offerings vary drastically from provider to provider – read carefully so you know what you’re getting. Remember: the amount and kind of coverage you get should be the primary deciding factors in which offer you choose.


3. Payment Options: Now or Later

At the end of each quote, you will probably see some verbiage along the lines of, “Payment options available are single, 2, 4, or 10 payments.” If you’ve never bought small business insurance before, it may seem like a no-brainer to choose to spread out your payments over the year. But there are some pros and cons to each approach:

Ultimately, if you can comfortably pay your premium all at once, go for it. It’s one less bill to account for from month to month. But if you don’t have a lot of money on hand, the installments may be the better option.

To learn more about budgeting for your insurance needs, read, “How an Insurance Agent Can Help Small Business Cut Insurance Costs.”

4. Quotes Are Not Final (But They’re a Pretty Good Guess)

Your quotes are generated based on the information you include in your application. If you misunderstand a question (language from insurance carriers can sometimes be unclear) and put in inaccurate information, your quote may change when an agent helps you update your answers.

It’s rare for a quote to change dramatically, unless the information in your quotes was very inaccurate.

5. The Meaning of All Those Company Names

Don’t be surprised if you see other company names on your quotes even though you applied through insureon. Those other companies you see are the insurance providers – the companies that issue the actual policies. Insureon, on the other hand, is your insurance agency – the business that negotiates and works with the insurance company on your behalf.

You may see a “rating” under the provider’s name, something along the lines of, “The Hartford, AM Best Rating of A (Excellent).” That rating denotes the company’s financial solvency. In this example, the company received a very high rating, which means it’s very unlikely to default when you need to draw on your coverage to cover a pricey claim.

6. Benefits of Starting Coverage Immediately

The other nice thing about your small business insurance quotes? Most of them give you the option to get covered right away, even without first making a payment. Most major insurers send you an invoice after the coverage has started. For some providers, they may wait two to four weeks to bill you.

This is worth keeping in mind if you need coverage to land a big client contract. That way, you can get covered right away and worry about the financial end of it a little later (and by then, you may already have that new income rolling in!).

To learn more about comparing quotes, check out the post, “How to Compare Small Business Insurance Quotes to Get the Best Prices.”


Business Owner's Policy | Cyber Risk Insurance | Data Breach | General | General Liability Insurance | Insurance Terms Explained | Property Insurance | Small Business | Tips for All Small Businesses

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