Should you buy insurance for your business online? For many small business owners, the answer is yes. In 2017, global professional services firm PwC asked 2,100 small businesses in 14 countries whether they preferred buying insurance online, face-to-face, or via the telephone. While less than a quarter of the respondents had bought digital insurance products in the past, 48% of those who planned to switch carriers within the next five years said they'd prefer to buy their coverage online.
Business owners who are shopping for insurance today have more web-based options than they would've had just five or six years ago. Several new digital platforms have entered the marketplace in recent years, including Mylo, CoverWallet, and Next Insurance.
Considerations When Buying Insurance Online
If you are considering buying commercial insurance policies online, there are a few things to think about before you take the plunge. One is your preferred method of communication. If you are comfortable doing business online and are used to communicating electronically, a web-based insurance platform may suit your needs.
A second thing to consider is your knowledge of commercial insurance coverages. If you have a good understanding of business insurance and know what coverages you need, you may have no trouble making selections and comparing quotes. However, if you are buying insurance for the first time or are unsure about what you need, you may be better off purchasing insurance through a traditional agent or broker.
A third consideration is your need for personalized service. Brick-and-mortar agents and brokers meet with their clients in person and provide one-on-one service. They can explain coverages you don't understand and help you fill out claim forms. You may not receive the same level of assistance from an online agent.
Pros and Cons of Buying Insurance Online
Buying insurance online has advantages and disadvantages.
|Convenience||No face-to-face interaction|
|Lower cost||Not suited to complex risks|
|Better transparency||Less personalized service|
|More control||Easier to make poor choices|
- Convenience: The main advantage of buying insurance online is convenience. Websites are available 24 hours a day, seven days a week. You can complete an application whenever you like. Some sites provide quotes immediately while others do so only during the operator's normal business hours.
- Lower cost: A second advantage is cost. Online insurance sellers have less overhead than their brick-and-mortar counterparts. Consequently, policies purchased online may be cheaper than those obtained from a traditional agency or brokerage.
- Better transparency: A third benefit of buying insurance online is increased transparency. Online insurance platforms enable buyers to easily compare policies and prices. Business owners can secure quotes, evaluate their options, and make a decision in one quick visit.
- More control: A fourth advantage is that business owners have more control over the purchasing process. They can choose coverages themselves rather than rely on an agent to complete an application and submit it to the insurer.
Most digital insurance platforms have licensed agents on hand to assist customers who need help selecting coverages.
- No face-to-face interactions: Buying online means there are no in-person interactions between buyers and sellers. Some buyers may find it difficult to establish a rapport with an agent via online communication.
- Not suited to complex risks: Secondly, online platforms are designed for business that meet a certain profile. They may not be well suited for businesses that have unusual or complex risks.
- Less personalized service: A third disadvantage is that buyers may receive less individualized service from an online platform than they would from an agent they met in person.
- Easier to make poor choices: Finally, some business owners may make poor choices when buying coverage on their own. For instance, they may buy the wrong coverage or purchase insufficient limits.
Online Business Insurance Resources
Some providers of digital insurance products are outlined below. All provide standard coverages like general liability and commercial property. Some also provide specialty coverages like errors and omissions. More information about these companies is available from their websites.
Online insurance platforms don't all use the same systems or technology. If you try one platform and aren't satisfied with the results, you can try another.
Insureon is an online insurance agency that caters to small businesses. The company is licensed in all 50 states and offers a broad range of products from well-known insurance companies. Customers can complete an online application and quickly compare quotes.
CoverWallet is an online insurance agency that aims to help businesses understand, buy, and manage insurance. It's owned by Aon, a large insurance broker. CoverWallet works with small and medium-sized businesses and startups to provide insurance coverage that is tailored, affordable, and right for their operation.
Next Insurance is an online insurance company that makes extensive use of insurance technology. It caters to small businesses and offers insurance policies designed for specific types of businesses, such as contractors, cleaning companies, and consultants.
Mylo is a digital insurance agency owed by Lockton, a large insurance brokerage. The company bills itself as a one-stop-shop, offering business insurance, small group employee benefits, and personal lines insurance coverage.
CoverHound is an online insurance agency that represents many well-known insurers like Chubb and Progressive. The company's website enables insurance buyers to choose the coverages they want and then compare policies and premiums. CoverHound is owned by insurance broker Brown & Brown, which also operates CyberPolicy. The latter is an online platform designed to help small businesses compare, quote, and buy cyber insurance.
Hiscox is an insurance company based in Bermuda. It is a specialty company that provides a wide variety of coverages. One of its specialties is small business insurance. Business owners can obtain a quote by filling out a form online or speaking with a licensed agent.
PwC. "Global Digital Small Business Insurance Survey: This time it's personal." Page 9. Accessed Jan. 7, 2021.