Most businesses could save money by properly shopping their insurance package
In 30 years dealing with small to medium size businesses, it is my experience that most businesses could save a significant amount of money by properly shopping around their business insurance packages. "Properly" is the key but know one tells you how to do it - until now.
Apples to Apples comparisonAn "apples to apples" comparison is essential when shopping your insurance package but most brokers and agents avoid providing an "apples to apples" comparison because it too easily reveals lack of pricing transparency. Instead what most brokers do is provide you "their proposal" which is loaded up with coverages you may not need so they can sell "value". But this leaves you wondering if you are getting a good price or just up-sold. Instead you should require any broker or agent to provide you a price based on your current coverage and ask them to provide you a side by side comparison of your present coverage and what they are offering, which should be the same, and then a cost for the coverage. By requiring competitors to quote your account on this basis, you will have a good starting point, which an "apples to apples" comparison. On this basis you can easily see what your current company is charging compared to what a competitor will charge for the same coverage.
Should I give out my policy coverages?Yes - but make sure you block out all references to price or rate. In fact you should always provide complete copies of your policies to a competing insurance carrier's agent or broker because you want the liability for the "apples to apples" quote to be on them, not you. Alternatively, if you write up a request for quote and list your coverages, you will likely miss important and subtle coverages providing the agent with an excuse, "that's what you told me you wanted". Therefore, always give a copy of your existing coverages and make it clear, you want an "apples to apples" comparison.
What about options or optional coverages?In addition to an "apples to apples" quote, make it clear you want the agent or broker to make recommendations as to what coverages they would either add or delete. By approaching the quote process in two steps, (1) an apples to appeals comparison and (2) options and recommendations, you will first know if the competitor really is giving you a better price then your existing company and you will also have the benefit of another insurance professional working to make smart recommendations on your insurance program.
Negotiation and renegotiationThe final stage in the process is negotiating and renegotiating your package with both your current insurance carrier and any prospective insurance carriers. Your current carrier can and will renegotiate your price if they wont to keep your business. Business insurance quoting is not an exact science or precise rate. There is generally some room to negotiate because each business has different risk factors and the rate reflects the insurance companies estimation of the risk they will incur with your business. Competition between insurance companies gives you an advantage and having the "apples to apples" comparison really gives you an advantage because you can simple say, "what will you charge me for these coverages".
Ask and you shall receiveSo what did you learn?
#1. First get an "apples to apples" quote.
#2. Give the agent or broker a redacted version of your policy so he knows what to quote.
#3. As the agent or broker to give you recommendations and options separately and with a price for each option.