How to Avoid Being Turned Down for a Business Insurance

Concept photo about business insurance showing a hand holding a rubber stamp

Getting insured is an important part of setting up a business. Insurance helps you cover hefty costs when the unexpected happens. Whether your enterprise has been hit with a natural disaster, burglary or injuries to your personnel, you can get by without having to cough up serious money if you’ve got a good policy protecting you.

Most insurance firms will be happy to do business with you regardless of your company’s size. After all, each business insured is a paying customer that adds to their profitability. However, insurers do reserve the right to deny applicants insurance when they perceive great risk in doing business with a particular organization. They want to make sure that the chances of a business filing a claim is within the bounds of what’s considered normal and acceptable.

To make sure your business isn’t turned down for an insurance application of any type, keep the following things in mind:

1. Fill Up the Application Form Accurately – The insurer needs as much factual information about your business as possible. At the end of the process, review it again and have another trusted member of your organization perform a counter-check.

Leave the form unsigned for now and show it to the insurer to make sure it has everything they need. After they give you confirmation, you can sign and submit the form. When in doubt, always ask questions. The information you provide will be used to assess the validity of future claims.

2. Make Sure Your Business Registration Documents are Complete – The insurer will need to verify that your business is properly registered and licensed to perform its trade in the city and state where you operate. Get a list of documents that they require and prepare them.

As much as possible, do not provide the original copies of your business registration documents. Most of the time, you can get by with copies of these papers.

Having incomplete supporting documents is one of the most common causes of insurance application refusals. Make sure you have everything that’s mandated by local and federal laws. File them in a secure place where only you and the most senior members of your business can access them.

3. Have a Clear Idea of What You Want to Insure – There are many types of insurance policies that can apply to businesses. There’s everything from simple fire and burglary packages to more comprehensive business interruption policies. Make sure you know which among their policies your business requires and stick with them.

If you’re having a hard time figuring out which ones you want because of the jargon, ask the insurer to differentiate each policy in plain English. Most insurers will be happy to help you out. If you can’t make up your mind, you may have to talk to a business development consultant.

4. Protect Your Brand and Reputation – Associating yourself with shady people is generally not a good idea. In the business world, the very same principle applies. Insurance companies tend to scrutinize businesses with bad reputations when they come over asking for insurance. In some cases, a company’s reputation can play a major role in whether or not an insurance policy is granted.

Preserve your business reputation by operating ethically and following the law to the letter. Treat investors, employees and clients as well as you possibly can. Do community outreach work and participate in good causes related to your industry. When people perceive your company to be a trustworthy and credible one, insurers will have no problems working with you.

5. Maintain a Good Credit Standing – Insurance firms, like other financial institutions, have access to the credit scores of the people and companies that they work with. Your credit score is a reflection of how well you honor your commitments to pay. If your company’s credit score is really bad, it can discourage insurers from working with you.

Make sure to make timely payments on a regular basis to keep your credit looking good. This not only helps you get insured, it also helps you get favourable deals from suppliers, banks and other institutions that you’ll inevitably work with at some point.

Bottom line: if you’ve been a responsible, law-abiding business owner, you should have no issues getting insured. Keep practicing business ethically and you will have access to just about every service your enterprise needs.