Questions to Ask Your Business Insurance Agent

In today’s day and age, scandals such as securities fraud, manipulation of funds, and seedy practices by business insurance agents are all too common. This being so, it is of the essence for today’s consumer to make sure that their interests – both business and personal – are fully protected.

When it comes to buying personal or business insurance, you want to be sure you are dealing with a licensed, reputable agent. The top ten questions you should ask a business insurance agent before giving him or her any business are as follows:

  1. Is your business insurance firm currently licensed in my state for insurance and securities? Also ask how long the firm has had their license. All states require that an insurance agent be licensed in the state for which he or she sells insurance and/or securities. In turn, the business insurance agent must be appointed to sell products by the licensed insurance company.
  2. All states have a Department of Insurance that is regulated by the government. To find out for yourself if an agent is licensed, go to your local state government web site.
  3. Is your business located in the United States, and do you reside in the United States? Most states require that a personal or business insurance agent reside in the U.S., and have a legitimate business address there as well. Be sure to verify the agent’s business address, which will also help to indicate whether or not the agent maintains a full-time business.
  4. Are you a full time business insurance agent? Nowadays, insurance agent commissions are being reduced and expenses are rising. As a result, it is becoming more and more difficult for agents to maintain a business office and overhead expenses. Some agents are selling insurance as their second job. In other words, this is not their full time job. To ensure the agent you are working with is not just after a quick sale, it may be best to work only with the ones who sell insurance as their full time job.
  5. Have you ever been convicted of a felony or misdemeanor? This question is likely to come up on your business insurance application – so why not turn the tables and find out the same information about your agent?
  6. How many business insurance companies do you represent, and what companies are they? An “exclusive” business insurance agent represents one and only one company. He or she is required to sell products solely offered by the company they represent. A “non-exclusive” or “independent” insurance agent may represent a number of different companies and may offer a variety of products. Because personal and business insurance needs differ from person to person (or business to business), an independent insurance agent is able to offer many different products and services specifically tailored to one’s needs.
  7. Will you provide me with financial information for all of the business insurance companies you recommend? All business insurance companies are rated by several different rating services, including A.M. Best, Standard & Poor’s, and Moody’s. The insurance companies are rated based on their financial stability, performance, diversification of funds, claims paid, and many other important factors. Note that the ratings are updated regularly, so you should ask for the most recent rating.
  8. Do you hold any professional designations? Agents in the business insurance industry are required to complete a certain number of continuing education courses in order to keep their license active. There are some business insurance agents who choose to go beyond the basic requirements and complete a set core curriculum in order to become a top notch specialist within the insurance industry. Professional designations to look for within the business insurance industry include the Chartered Life Underwriter (CLU), Chartered Financial Consultant (CFC), Certified Senior Advisor (CSA), Registered Health Underwriter (RHA), Life Underwriter Training Council Fellow (LUTCF), Certified in Long-Term Care (CLTC), and Certified Financial Planner (CFP).
  9. Do you have errors and omission business insurance? Business insurance agents that are reputable will carry errors and omission insurance, which will help protect them and the client in the event of a wrongful act or misrepresentation by the agent.
  10. What kind of insurance coverage do you have for yourself? Find out what types of coverage the business insurance agent him or herself has, as this may give you some insight into how dedicated this agent is to the insurance industry, and how well he or she personally knows the value of insurance.
  11. What area of business insurance is your specialty? Other than standard business liability insurance, there are several products a business insurance agent can offer. Some of these products include property insurance, disability insurance, surety bonds, and more. Talk with the agent at length to make sure you fully understand all the different business insurance products and how they relate to your needs.

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