Comparing multiple quotes for general liability insurance, the inclination of the average shopper can be to quickly select the plan with the lowest rate. However, this strategy doesn’t always guarantee the business owner is getting the optimum coverage for the business’ assets. Hence, it is imperative to compare all of the quotes according to a few other criteria as well prior to making your decision to buy.
How to Compare General Liability Insurance Quotes
Just as it’s helpful to use a step-by-step checklist while getting quotes, it is strongly recommendedthat you additionally stick to a well-planned process while you review quotes from multiple insurance companies. This will guarantee that, in addition to choosing the rate that fits your budget, you will additionally get a policy that protects your business’ current and future needs.
Time - How is Coverage Defined in the Policy?
The initial thing you’ll have to compare in each of the plans you consider is the way coverage is defined in regards to time. Basically, will the insurance policy insure your liability when an incident happens (indicated on the insurance policy as coverage at “time of occurrence”), or at the time the claim is filed (coverage on a “claims-made” basis)? Each individual definition features its own good and bad points to keep in mind.
Time of occurrence coverage protects you against situations that took place within the time period while you were insured - no matter when the claim is ultimately filed. This is particularly beneficial when you run a business that might open you up to any sort of future legal liability (e.g., offering a product or service that could cause injuries, health issues, etc. at some time in the future). The drawback to this kind of coverage is that it fails to take into account inflation, so the limits on your old coverage may no longer be enough to pay for claims made in the future.
Claims-made coverage, however, protects you against claims made while in the coverage period. Because of this, it is much less difficult to manage for the insurance provider and bears no risk of inadequate limits caused by inflation. The drawback to this particular coverage is the fact that the majority of claims-made policies include restrictions on the time when the insured incident occurs, and therefore supplemental coverage is generally required.
Gaps and Overlaps
The second thing you must look for while comparing different quotes is the presence of any gaps or overlaps in coverage. This process consists of reviewing the kinds of coverage provided in each individual policy (e.g., product liability, professional liability, etc.), and determining if there exist any liabilities that your particular business may be exposed to that are not included. More over, it’s also advisable to identify overlaps (i.e., redundant coverage between policies that makes one kind of protection unnecessary).
As part of your review for gaps and overlaps, you need to also take into account any sort of industry, local, or national policies in your area.If there’s a particular kind of insurance coverage requested by regulators of your respective industry, make certain that it’s contained in every policy.
Policy Limits and Supplemental Options
Lastly, you’ll need to compare the policies’ limits for each type of coverage, and figure out if opportunities for supplemental options (i.e., umbrella coverage) are supplied. This can be, of course, critical as you will need to be certain that the total amount of protection delivered by each quote is the same prior to comparing the premiums against one another.
The Value of Accurate Comparisons
Unfortunately, comparing quotes for general liability insuranceis not as easy as going through the premiums alongside one another. The perception of what novice buyers may see as trivial differences in two insurance policies can, in truth, constitute the difference between a policy that offers adequate protection for your assets, and one which leaves you exposed to potentially-devastating liabilities. This reality makes an accurate comparison of policies possibly the most-important part in the process of selecting liability insurance for your business.
Next Up in This Series of Articles - Deciding on a GLI Policy…