This guide from Gallagher Small Business, released for National Financial Literacy Month, helps small business owners understand essential insurance steps — from selecting the right broker and reading a policy to filing a claim — to ensure they make informed decisions to protect their business.
As a small business owner, understanding how to safeguard your venture is vital. Insurance is a key element in protecting your business from unforeseen risks, but navigating the world of insurance can be complex. In recognition of National Financial Literacy Month, here's a practical guide from Gallagher Small Business to help you make informed insurance decisions, from choosing the right insurance broker, to reading a policy, and filing a claim.
How to pick the right insurance broker
Choosing an insurance broker is an important decision. A broker serves as your partner, ensuring your business is properly insured and that you receive the best coverage for your needs. Here are some key factors to consider:
- Industry expertise: Look for brokers with experience in your industry. They'll be better equipped to identify specific risks that your business might face and to tailor coverage accordingly.
- Reputation and credentials: Check the broker's credentials and certifications. Reputable brokers should have licenses and be members of industry associations such as the Insurance Brokers Association of Canada (IBAC).
- Client testimonials: Reviews and testimonials from other small business owners can offer valuable insight into the broker's reliability and level of customer service.
- Customization: Every small business is unique. Ensure the broker is willing to customize insurance packages based on your specific operations and risk profile, rather than offering a one-size-fits-all solution.
- Claims support: A good broker will help you with the claims process. Ask how they handle claims and what level of support you can expect.
How to read your insurance policy
Insurance policies can be lengthy and packed with jargon. Understanding the basics will help you ensure your business is covered for the right risks. Here's how to approach your policy:
- Declarations page: This is the first section of your policy and contains the key information like policyholder name, coverage limits and policy term. Check that all details are correct.
- Coverage sections: These sections outline the types of coverage you're purchasing, such as general liability, property or cyber insurance. Understand what each type covers and ensure it aligns with your business needs.
- Exclusions: It's crucial to know what's not covered. Exclusions are listed in a separate section and may vary by policy. For example, some general liability policies may exclude professional services or cyber risks.
- Deductibles and limits: These specify how much you pay out-of-pocket in the event of a claim and the maximum amount the insurer pays. Make sure your deductibles are manageable, and your coverage limits are adequate for potential risks.
- Endorsements: These optional add-ons modify your policy. Depending on your business, you may want to add endorsements for things like business interruption or equipment breakdown.
Filing a claim: What you need to know
When something goes wrong, filing an insurance claim can feel overwhelming. Understanding the claims process ahead of time will reduce stress if you ever need to use your insurance. Follow these steps:
- Report the incident promptly. Notify your broker and insurer as soon as possible after an incident. Many policies have specific time limits for reporting claims, and delays could affect your payout.
- Document everything. Take photos, gather witness statements and document all relevant information related to the incident. This evidence will be vital during the claims process.
- Complete the claims form. Your broker will provide a claims form to complete. Be thorough and accurate, providing all requested details.
- Work with your broker. A reliable broker will guide you through the claims process, acting as an advocate on your behalf. They'll communicate with the insurer to ensure a smooth and timely resolution.
- Follow up. Stay in touch with your broker and insurer throughout the process and be sure to keep copies of all correspondence.
Why insurance literacy matters
Insurance is more than just a safety net — it's a vital financial tool for your business. Understanding the basics of choosing a broker, reading your policy and filing a claim can prevent costly mistakes and help you make better decisions for your business. By equipping yourself with this knowledge, you can safeguard your business's future, allowing you to focus on growth and success.
At Gallagher Small Business, we're committed to supporting small business owners with comprehensive insurance solutions. This National Financial Literacy Month, take the time to ensure you're making informed decisions for the long-term health of your business. If you have questions about your coverage or want to explore better insurance options, contact us today for a consultation.
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