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What Should a Business Owner Consider in Choosing a Business Insurance Agent? And What Insurance Coverage Does a Business Need?

What should a Business Owner Consider in Choosing a Business Insurance Agent? Very similar to when you choose any other Professional (Doctor, Lawyer, CPA etc). If you shop for price only, expect to get burned.

  1. Licenses
  2. Call the Department of Insurance to get a status on how many complaints the agent has had
  3. Determine what form of distribution system will be used
    • Direct Writer
    • Independent Insurance Agent
    • 1-800 number
    • Internet
  4. Years of Experience in selling Business Insurance
  5. Ask the agent when the last time they went to a certified education course in the field of business insurance. Arizona is the only state in the United States that does not require an agent to have continuing education to maintain their license.
  6. Designations: Certified Insurance Counselor (CIC), Certified Property Casualty Underwriter (CPCU), Certified Risk Manager (CRM), and Certified
    Life Underwriter (CLU)
  7. Consider their education background the field of business
  8. Reputation in the Business Insurance Field

This presentation is meant to serve only as a guide to assist business owners and those advising for SCORE. For a thorough Analysis of Coverage a Professional Agent needs to be consulted

What Insurance Coverage Does a Business Need?

With all policies all be mindful of exclusions, limitations, and endorsements. Have the insurance agent explain them before a loss not after a loss.


  1. General Liability (Bodily Injury and Property Damage)
    • Premises and Operations
    • Products and Completed Operations
    • Personal Injury and Advertising
    • Fire Legal Liability (This has to do with property in the care, custody and control of the insured. Be sure your agent reads the lease if applicable to determine who is responsible and if there is a waiver of subrogation)
    • Medical
    • Optional Non-Owned Auto (Could as an alternative be put on
    • Optional Hired Auto (Could as an alternative be put on Commercial Auto Policy)
  2. Liquor Liability
  3. Cyber-Liability
  4. Pollution Liability
  5. Professional Liability
  6. Directors and Officers Liability
  7. Employment Practice Liability
  8. Employee Benefits Liability
  9. Garage Liability
  10. Garage Keepers Liability
  11. Environmental Liability


  1. Building Be mindful of:
    • Value (Be careful with co-insurance, so there is not a penalty at the time of loss)
    • Deductibles
    • Actual Cash Value, Agreed Amount , or Replacement Cost (for both building and Business Personal Property)
    • Ordinance or Law
  2. Business Personal Property
    • Value (Be careful with co-insurance)
    • Deductibles
    • Actual Cash Value, Agreed Amount, or Replacement Cost
  3. Business Income (Lack of adequate business insurance is the Leading Cause of Bankruptcy for an insured property loss) Can be written:
  4. Actual Loss Sustained up to 12 months
  5. Monthly Indemnity
  6. With a co-insurance
  7. Flood Insurance
  8. Earthquake Insurance
  9. Environmental Coverage
  10. Dealers Blanket (For those engaged in the business of buying and selling autos, boats, recreational vehicles and perhaps garage exposures

Inland Marine

  • Items that need to be scheduled to prevent disagreements at the time of a loss (Fine Arts Antiques, etc)
  • Jewelers Block
  • Tools and equipment (if they leave the premises)
  • Electronic Data Processing (EDP)
  • Motor Truck Cargo
  • Installation Floaters

Business Auto

  • Liability (Often times the greatest exposure to a business, but with the least amount of liability coverage)
  • Med Pay
  • Uninsured Motorist
  • Underinsured Motorist
  • Comprehensive (Various Deductibles)
  • Collision Various (Deductibles)
  • Optional Common Endorsements: Drive Other Car (DOC), Non-Owned Auto, and Hired Auto

Keep in mind the Liability for Trailers only extends if under 2,000 GVW. If more than 2,000 pounds the trailer must be listed for there to be liability coverage. Physical Damage for trailers must always be listed

  • Keep in mind there is no coverage for add on equipment unless scheduled
  • Keep in mind there is no coverage for cargo under the Business Auto
  • Keep in mind there is no coverage for tools and equipment
  • Keep in mind add on equipment need to be figured in the value of the truck and it is best stated.
  • Keep in mind under a Business Auto Policy there is no coverage that automatically extends to vehicles you rent
    Workers Compensation

Workers Compensation is sold by the State of Arizona and Private Insurance Carriers. It is wise to compare when shopping for Workers Compensation.
It is the law that any employer with one or more employees must carry Workers Compensation

Three Parts to Workers Compensation

  • Indemnification 66 and 2/3 of wages with a monthly maximum in Arizona of $3,600.
  • Medical (No limit)
  • Liability (Minimum is $100,000/per accident bodily injury; $100,00 for any one disease with a maximum of $500,000 per policy. To raise this coverage to $1,000,000 it is only 2% more of the annual premium)

Keep in mind that if any employee does any work in another state the Insurance Carrier or agent should be notified immediately as it may be necessary to endorse the policy to prevent any gaps in coverage.

Other Business Insurance to Consider:

  1. Life Insurance
    • Group Life
    • Key Man Insurance
    • Funding for Buy-Sell Agreement
  2. Group Health Insurance
  3. Group Disability
    • Short Term
    • Long Term
  4. Group Long Term Care
  5. Group Dental Insurance