A lot of business owners are understandably price conscious when it comes to their business insurance policies. Often, business owners will shop their business insurance and hop from insurance company to insurance company in the hopes of finding the most affordable policy.

The problem with this strategy is that if a claim occurs it may be difficult to determine which insurance company coverage applies. For example, a plaintiff may allege that a claim occurred during the fall of 2010 but no date is specified in the petition. What if your business changed to a different insurance company on October 15, 2010? Which policy applies? Could this give the insurance company reason to deny coverage and defense of your claim?  

Compare this to the strategy of remaining loyal to a single insurance company. In that circumstance you’d only go to one company to determine coverage. It could even pay off to have that coverage despite a slightly higher premium price.

Neither strategy is necessarily wrong. I understand the need to keep costs low. I just bring it to your attention that if you hop from insurance company to insurance company you’ll need to make sure that policy start and end dates should be carefully recorded and kept even for years (if not permanently) to give yourself the best opportunity to determine which policy applies to a particular claim. Insurance companies may find reasons to deny coverage if specific dates of claims are not alleged by a plaintiff.

My advice is to carefully consider switching from insurance company to insurance company for business insurance. Find an agent and insurance you trust and stick with them provided the costs are reasonable and within your budget.