Many small businesses need several small business insurance policies. In order to get each policy at the lowest possible price, business owners are sometimes tempted to purchase coverage from several different insurers. Doing this, however, has a few drawbacks -- one of which is that it rarely provides savings. If you own a small business in Massachusetts, here’s why purchasing policies from multiple carriers probably isn’t a good idea.
Is Purchasing Small Business Insurance Policies from Multiple Carriers a Good Idea for My Small Business in Massachusetts?
You Massachusetts Business is Unlikely to Save Much -- And May End Up Paying More
First, your business likely won’t save much by purchasing small business insurance policies from different carriers -- and there’s a good chance it will actually end up paying more for the coverages it needs.
While your business might save on individual small business liability insurance policies by purchasing policies from different insurers, it must forgo a potentially major discount to get these savings. If your business gets each policy from a different carrier, it won’t be able to get any multi-policy discounts. Even if your business does get two policies from one carrier, it’ll probably miss out on potential multi-policy discounts for any policies purchased through other carriers.
Multi-policy discounts are often among the larger discounts that carriers offer on small business policies, so it’s usually wise to take advantage of them as much as possible. In most cases, carriers’ multi-policy discounts will be much more than what your business can save by purchasing policies individually from different insurers.
There May Be Coverage Gaps Between Your Small Business Insurance Policies
Second, anytime you’re purchasing multiple insurance policies to cover a small business, it’s important to review each policy for coverage gaps. This is something you’ll likely want to do with your insurance agent regardless of whether you're getting policies from one or multiple carriers.
When purchasing policies from different carriers, the risk of coverage gaps is greater. For, when you get policies from more than one insurers:
The policies may use different language, which could make interpreting their coverages more challenging
The policies aren’t designed to go together, so the likelihood of them having gaps is increased
It may be more difficult to obtain riders or endorsements for any gaps the policies have
All of these problems can also arise when getting policies from a single carrier, but they’re less likely to because carriers often design their small business liability insurance policies to complement each other.
Claims May Be Delayed While Carriers Sort Out Coverages
Third, even if there aren’t any gaps between policies, claims can be delayed if more than one carrier is involved.
If your business files a claim and has policies through multiple carriers, you may have to wait while the insurers sort out which company is responsible for paying the claim. This could take days, weeks or, possibly, even longer.
When all policies are underwritten by the same Massachusetts carrier, it’s clear what company is paying for a valid claim. Your insurer may still need to determine which small business liability insurance policy covers a particular claim, but this process usually goes much faster when only one company is involved.
Independent Insurance Agents Make Comparing Multi-Policy Packages Easy
Finally, your Massachusetts small business can get help comparing multi-policy packages by contacting an independent insurance agent. An independent agent can help you determine what small business insurance policies are appropriate for your business, and they can request policies from several insurers at once. Once they receive quotes, they can help you compare the different packages to see what insurer offers the lowest rates, best multi-policy discounts and most comprehensive coverages for your business.