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Online insurance quotes are a great tool for consumers. Insurers encourage online insurance purchases direct from the insurer because it eliminates the middle-person: the agent or broker. Quotes online offer convenience, anonymity (after all who really wants to talk about traffic infractions with another person), and immediacy.
Such online quotes are adequate for personal insurance such as life, home or auto policies. But what about business insurance?
INSURANCE QUOTES AVAILABLE FOR BUSINESS INSURANCE
When looking online for insurance for your business you will want to stay with the sites offered by the insurers. With the exception of Ehealthinsurance.com and perhaps one or two other online sources that are not direct insurer sites, you run the risk of dealing with an intermediary that does not possess the ability to serve your business beyond applying for the insurance with the insurer. Insurers generally do not provide direct purchase options for business insurance online. This is because insurers understand that business insurance is a bit more complex than personal insurance and good insurers will encourage you to seek out a local agent or broker. The insurer may offer a quote based on some input you provide, but the final purchase will only be made either through an agent or through a company representative.
There are three types of website categories for online business insurance quotes:
- Insurer Direct. The insurer's website offers a quote on its website and additional information. The company then contacts you to finalize the purchase.
- Insurer to Agent. The insurer's website offers a quote on its website and additional information. The website then directs you to an agent search feature for you to find a local agent to finalize the purchase.
- Third Party. The website is a third-party consolidator where your information results in a number of quote choices. There are legitimate websites. But, there are also unscrupulous or small market players that create a website to make the sale with little regard for the business needs of the customer and may not be licensed to sell insurance in your state.
Before using an online source consider whether your business is appropriate for an online quote or purchase of business insurance.
SIZE OF THE BUSINESS
The first consideration should be the size of your business insurance and risk management program.
Online insurance quotes and online insurance purchases are better for small businesses in a clearly defined business model:
- Small Restaurants
- Retail Shops
- Small Professional Offices
- Local Service Businesses (Drycleaners, Printer, etc.)
Online insurance purchases are generally not appropriate for large companies, those with specialized risk, or those with an unusual business model:
- Fleet Operations
- Manufacturers
- Large Contractors and Construction Businesses
- Larger Restaurants and Bars With Potential Liquor Liability
The larger the operation and the greater the number of employees the less likely it will be that an online quote will be the best way to purchase liability, commercial auto, or health insurance for your business.
FINANCIAL STATUS OF THE BUSINESS
If your business is in particularly good financial condition, than your business may be able to establish a portion of its insurance as self-insured. Such a set up is not conducive to getting an effective online quote.
Similarly, if your business is on a tight budget, higher deductibles, health savings accounts, and other creative options may stretch the insurance dollar farther. Online quote systems may not reflect these possible options.
CONSIDER THE VALUE OF TIME
Investigating insurance options online is essentially a do-it-yourself operation. Consider whether the person assigned to make the purchase online will have the time to properly investigate the options and follow up on all of the quotes. It may be more efficient to retain a local agent to do the footwork for the business. Online insurance may be a bit cheaper, but consider the value of time. A doctor searching for insurance online is not making money or seeing patients.
CONCLUSION
Online insurance purchases for businesses are best made by small businesses with ordinary business models and no unusual risks. And, to do it right, the owner or a key employee will be spending time researching the insurance, making the purchase and following up. Consider using the services of an insurance professional in addition to online research.
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