How To Better Serve Small Business Insurance Needs

Small businesses are the backbone of our economy, employing millions of people and driving innovation and growth. However, they often face a unique set of challenges, particularly when it comes to securing the right insurance coverage. During Small Business Month, Bold Penguin will highlight SMBs’ unique coverage needs as well as provide tips to agents on how to better serve SMBs.

Recently, we sat down with Tatiana DeJongh, Vice President of Partnership Management at Hiscox Insurance, one of America’s leading small business insurers, and one of our valued carrier partners. Tatiana sheds valuable guidance, insight, and resources on how to find the right coverage for customers, how the small commercial insurance landscape has evolved, and tips for agents to grow their business.

Check Out These Tips To Serve Small Business Insurance Needs

Bold Penguin: There is a large percentage of small business owners that are underinsured or have no insurance at all.  Why should SMBs consider purchasing insurance?

Tatiana: There are three main reasons a business does not have insurance (or not enough insurance). They either 1. think they don’t need it 2.  don’t understand it, or 3. are trying to cut costs.

For those who think they don’t need it or are trying to cut costs, the cost benefit analysis is pretty straightforward. Any business can be sued, and for almost any reason. Even if they haven’t made a mistake, they can find themselves on the wrong end of a lawsuit, and even if they prevail, they will still incur costs to defend themselves. Insurance helps to protect the business owner against the risks they can’t see coming.

For those who find it confusing, let the agent be the expert. The agent can help determine what coverage is needed, and what limits and deductibles are appropriate.  

Bold Penguin: What advice would you give a small commercial agent just starting out in today’s insurance landscape? Or advice to an established agent with personal insurance lines experience but who is not experienced with small commercial?

Tatiana: For new agents, it’s best to start with smaller businesses which tend to have more straightforward insurance needs. That allows the agent to get their feet wet as they gain confidence with what they are selling. Carriers offer fantastic tools as well. Hiscox, for example, hosts webinars to learn the basics about its products and how to market effectively, and also offers marketing collateral to help agents sell. We specialize in small business and keeping things simple! Overall, an agent is a small business owner too, so putting that "hat” on will help them get into the mindset of potential customers.

There are plenty of synergies between personal and commercial insurance. For a small business owner, their business is just as important as their home.

Protecting it draws on the same emotions, so many of the conversations really carry a similar theme that the agent would be familiar with. I also find that one of the best ways to start in commercial is to draw on the agent’s personal lines customer base. A large number of homeowners, for example, are small business owners. The individual already trusts their agent with their personal insurance and would likely be receptive or appreciative of a broader discussion.

Bold Penguin: Hiscox has roots dating back to 1901 and has witnessed the industry change. How do you feel the small commercial insurance industry has adapted to the evolving needs of the SMB’s?

Tatiana: The insurance industry has changed just as the business landscape has changed. Two of the major changes we’ve seen are in professional liability (E&O) and cyber security. Due to the litigation climate in the US, E&O insurance is becoming available for to a greater variety of different professions. Business owners realize they can be sued for anything, even if they haven’t made a mistake, so they understand the importance of purchasing insurance to protect against the financial implications of a lawsuit.

Needless to say, when Hiscox began, there was no such thing as cyber security insurance. Even twenty years ago, it wasn’t on most people’s radar. But now we know that any business is vulnerable to a cyber incident, and that the ramifications can be costly.

Bold Penguin: What do you think are the most common mistakes that SMB’s might make when looking for coverage and what’s the best way to avoid them?

Tatiana: The most common mistake is not purchasing the type and amount of coverage they need. When it comes to property and casualty insurance, most consumers’ experience is with their home and auto coverage. They know they need both of these – their mortgage lender requires that they have homeowners insurance, and their auto lender or state requires auto coverage. So that’s easy.

But a business has options. There are a lot of moving parts. An agent can help them figure out what they need, as well as help them determine what their limits should be.

An agent can also help with another common mistake, which is not leveraging the right tools to compare like coverage and features when determining which policy to buy. Price is important, but it’s also important for SMBs to know what they’re buying. And whichever carrier they choose, make sure they have a good record for claims. Because when you buy an insurance policy, that’s a key component of what you’re buying – the claims service.

Bold Penguin: As we celebrate Small Business Month, what resources should SMB’s be taking advantage of in order to protect and grow their business?

Tatiana: There’s so much information out there about how to start, grow and protect a business – a business owner could spend all day reading up on it and never get any business done! So finding a good resource or two that you can trust is important. Personally, I like the Hiscox blog which offers  great, actionable information for business owners, but I’ll admit I may be a little biased.

The U.S. Small Business Administration (SBA) has great resources as well, as does America’s Small Business Development Centers (SBDC). The SBDCs also offer low- and no-cost advice and education for small business owners, no matter what stage they’re at.

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