Business Insurance Methodology

Below we detail our process for rating all business insurance providers we studied:

We covered the following factors in our analysis of business insurance providers:

We developed rating systems for two areas: overall aggregate across all core coverage types and coverage type specific levels. Our overall aggregate rating system weighs all core coverage types equally across states, industries and employee counts studied based on these metrics:

• Affordability: We compared provider rates across all four major coverage types against other national carriers to find the most cost-effective options for small businesses. In addition, we assessed discounts and programs offered to help small businesses save.
• Customer experience: We analyzed J.D. Power scores, complaint records and customer feedback to assess buying, policy management and claims experiences.
• Coverage options: We reviewed insurance offerings, including policy types and customization options, to determine coverage flexibility.

Scoring weights vary at the coverage level and not all industries are included for every coverage type due to varying needs. So below, we've broken down our coverage type level methodologies for transparency and clear referencing.

Click the links below to jump to each:

• General Liability
• Workers' Comp
• Professional Liability (E&O)
• Commercial Auto
• Commercial Property
• Cyber Insurance

Small business owners across all 408 of our industries studied, all 50 states and all employee count ranges were studied for general liability insurance. The scoring categories and their details are as follows:

• Affordability (50% of score): Pricing for a standard $1 million per occurrence and $2 million aggregate policy across all metrics of industry and state and employee count band (assumed 1 to 4 employees for overall ratings) were analyzed. Discounts related to bundling were also taken into account for this rating and how negotiable pricing is over time with longer relationships with an insurer.
• Customer experience (30% of score): We dove deep into customer experiences related to actual GL buying, policy management and claims experiences where possible.
  • Buying (30% of CX Score): Here we measured quote accessibility and speed underwriting transparency, pricing accuracy vs. the final premium received, coverage term clarity and sales support both from agents and digital sources.
  • Policy Management (20% of CX Score): This includes endorsement processing speed, COI handling, billing and payment flexibility, customer support responsiveness and digital account/tools usability.
  • Claims (50% of CX Score): Claims initiation & assignment speed, communication quality & transparency, resolution timeliness, settlement fairness and dispute/appeals handling was assessed here.
• Coverage options (20% of score): We broke out our analysis into four core areas.
  • Coverage completeness (35% of Coverage Score): Assesses core terms and conditions of general liability coverage at base for items covered and inclusions.
  • Coverage Limits & Flexibility (20% of Coverage Score): We looked at payment terms and actual selections you can make for core coverages to determine value here.
  • Endorsements & Optional Enhancements (25% of Coverage Score): We looked at all add-ons and their usefulness to small businesses as a whole and in comparison, to competition.
  • Policy Terms, Conditions & Exclusions (20% of Coverage Score): This includes assessment of the fine print of how coverage applies in practice, any exclusions that may restrict generalized coverage and payment/reimbursement flexibility.

Workers' comp ratings were conducted similarly to general liability insurance, but more weight was placed on affordability and customer experience due to the lack of much variability in coverage (due to lack of many endorsement and state law setting amounts). All states and industries studied in our analysis are included and only those with employees were analyzed.

Our rating system for the coverage type is as follows:

• Affordability (55% of score): This score category was determined based on average payroll for the most common employee code within each industry and state classification system as a baseline. State mandated coverage was assumed and pricing was judged on a per employee basis for accuracy and a 1 to 4 employee business was our base business size.
• Customer experience (35% of score): We dove deep into customer experiences related to actual GL buying, policy management and claims experiences where possible.
  • Buying (20% of CX Score): We looked at quote accessibility and speed, class code and payroll intake accuracy, pricing accuracy vs. the final premium received, coverage term clarity and sales support both from agents and digital sources.
  • Policy Management (30% of CX Score): This includes payroll reporting experiences, audit process quality, endorsement handling, billing and payment flexibility, customer support responsiveness and safety/loss control support access.
  • Claims (50% of CX Score): FNOL (first notice of loss) & triage speed, adjuster support, medical network accessibility and guidance, wage replacement timeliness and accuracy, claim closure effectiveness and disputes/appeals handling was assessed.
• Coverage options (10% of score): We broke out our analysis into four core areas.
  • Coverage completeness (35% of Coverage Score): Assesses core terms and conditions of workers' comp coverage at base for items covered and inclusions. This includes items like employers' liability coverage limit, parts A & B, breadth of wage replacement and medical cost reimbursement along with amounts reimbursed for healthcare expenses.
  • Policy Flexibility & Endorsements (25% of Coverage Score): This part is basic and looks at endorsements offered and flexibiltiy of coverage choices for base items.
  • Elligibility, State & Industry Breadth (20% of Coverage Score): We looked at who companies will cover to assess the appetite of insurers from an industry, business size and state standpoint.
  • Policy Terms, Limits & Structure (20% of Coverage Score): We look at fine print terms for exclusions, inclusions, special situations and audit procedures to effectively assess fringe case situations and quality of coverage.

In terms of professional liability insurance, we limited down to 151 industries that actually need coverage, but otherwise studied all of the same providers, states and employee counts.

Our rating system for the coverage type is as follows:

• Affordability (50% of score): This score category was determined based on average payroll for the most common employee code within each industry and state classification system as a baseline. A 1-to-4-person business with a $1 million per claim and aggregate policy was assumed for base overall ratings. Discounts for bundling were taking into account as a small portion of this score.
• Customer experience (30% of score): We dove deep into customer experiences related to actual GL buying, policy management and claims experiences where possible.
  • Buying (25% of CX Score): This score looks at fairness and accuracy of the buying process through judging quote speed/accessibility, underwriting transparency, retroactive date & prior acts explanations, coverage language clarity and sales support.
  • Policy Management (20% of CX Score): Endorsements, COI handling, risk management resources, payment/billing experience and policy management support quality was assessed.
  • Claims (55% of CX Score): We did a deep dive into professional liability claims experiences regarding assignment/reporting speed, defense quality & industry expertise, support/communication effectiveness, consent to settle handling, resolution speed & timeliness along with appeals/dispute handling.
• Coverage options (10% of score): We broke out our analysis into four core areas.
  • Coverage Options & Breadth (40% of Coverage Score): This looks at cyber liability add-ons/availability, core coverage inclusions, additional coverage extensions and bundling options.
  • Policy Terms and Conditions (30% of Coverage Score): Forms of coverage available, defense costs handling/coverage, exclusions/limitations and tail coverage terms were analyzed to get this score.
  • Limits and Deductible (20% of Coverage Score): The score area for this looks at your actual selections available for core coverage limits and terms.
  • Industry Specific Coverage (10% of Coverage Score): If packages are specifically available, we assessed the quality of these industry specific coverages, how many offerings they have for common industries and how they stack up against the provider average for options.

Due to the vastly different coverage structures associated with commercial auto insurance, we created a more personalized rating system, removed employee count as a metric and added vehicle types as a factor along with coverage level. In order to judge this commercial insurance type properly, we only studied the vehicles for each industry in line with their operations, separated commercial auto (traditional vehicles most businesses use) and commercial truck (semis, tankers, flatbeds, box trucks, ext), and applied minimum coverage metrics specific to vehicle type, use and state.

All state level assumptions are the same as our general business insurance study.

Our commercial auto rating system is as follows:

• Affordability (50% of Score): We judged all providers based on a minimum coverage policy across five major providers where rates were directly able to be gathered and assessed.
• Customer Experience (30% of Score): Where possible, we looked at commercial auto customer experiences for businesses specific to industry, state and vehicle types along three core metrics.
  • Buying (20% of CX Score): Quote accessibility & speed, underwriting transparency, agent/broker experience & service quality, coverage customization and pricing transparency were all taken into account to calculate this score.
  • Policy Management (30% of CX Score): Speed of processing endorsements, COI handling, digital self-service tools, payment/billing experiences and customer support were assessed.
  • Claims Experience (40% of CX Score): FNOL (first notice of loss) processing, claims communication, speed of resolving claims, fairness of settlements and downtime/rental handling make up this score.
• Coverage (20% of Score): We took into account commercial auto insurance coverage specific factors including the following.
  • Core Liability Protection (30% of Coverage Score): This score area looks at core coverage selections and availability of CSL, Hired/Nonowner coverage and MCS-90 filing support.
  • Physical Damage & Vehicle Protection (25% of Coverage Score): Collision and comprehensive protection options were assessed here, including endorsements for after damage coverages, options for reimbursement of damages and gap insurance limits available.
  • Commercial Specific Enhancements (25% of Coverage Score): Particularly for passenger carriers and cargo carriers, endorsements to cover multiple drivers, actual property carried, equipment held inside of vehicles and broad form coverage options were taken into account when developing this score.
  • Flexibility & Limit Strength (15% of Coverage Score): This looks at how high or low you can set limits, deductibles and other selections for all coverage types available. We also investigated how exactly these options change as fleet sizes grow, types of work are expanded and industry specific limitations that could be present to gauge coverage appetite and flexibility.

Commercial property insurance, like commercial auto is a specialized coverage and many specialized considerations for BOP policies also had to be taken into account along with its common business interruption component. There are also different types within this coverage umbrella regarding equipment, buildings, personal property as well.

In order to account for these differences we developed the following ratings system:

• Affordability (50% of Score): We assumed proportionally determined personal property insurance numbers based on employee count ranges without building coverage (since most small buisnesses are renters). We assumed a 1-to-4-person business and $100,000 of BPP (business personal property coverage) for our overall ratings.
• Customer Experience (30% of Score): We analyzed customer experiences specific to business property insurance for our three core categories.
  • Buying (30% of CX Score): Four areas of quote accessibility & speed, coverage term clarity, underwriting and customization processes along with agent experiences made up our buying score.
  • Policy Management (30% of CX Score): Digital account experiences/tools available, endorsements and ease of making changes (specific to equipment, tools, ext), payment processes and how proactive agents are with communicating with businesses about their needs once they buy allowed us to comprehensively assess policy management.
  • Claims (40% of CX Score): Claims filing/accessibility of filing, adjuster responsiveness, transparency of support networks and resolution speed and fairness were taken into account.
• Coverage (20% of Score): Given the variation in structure of property coverages for most insurers we made sure to personalize our score to properly reflect the small details with the following subscores.
  • Covered Perils Depth (30% of Coverage Score): Items/perils covered, how you can choose to have your property valued, the scope of coverage and catastrophic endorsement availability & flexibility were used to determine this score.
  • Business Income & Expense Coverage (25% of Coverage Score): Given business interruption coverage is often included as a part of commercial property insurance we created a dedicated category to assess its coverage, selections, breadth and assistant networks.
  • Coverage Extensions & Endorsements (20% of Coverage Score): Tools and equipment endorsement availability/options, ordinance coverage and industry specific packages were evaluated here.
  • Policy Terms & Conditions (15% of Coverage Score): This is where we looked at the fine print of waiting period terms, coinsurance language and clauses related to vacancy and protective safeguards.
  • Limits, Sublimits & Deductible Flexibility (10% of Coverage Score): This looked at the flexibility of actual limit and basic coverage term selections.

Cyber insurance again is a specialized coverage but is similar to the other liability coverages on our list for general and professional liability. However, components address both third and first-party related issues, making it necessary to differentiate their value and ultimately the options small businesses have. Only three providers (Hiscox, Chubb and Coalition) for this relatively new to market coverage qualified for our scoring criteria and all our study's combos of state, industry and employee count were studied.

We developed the following rating system to account for these differences:

• Affordability (50% of Overall Score): Pricing and discounts were the primary components of determining affordability at the provider level. We assumed a 1-to-4-person business and $1 million in total per occurrence and aggregate per year coverage for base overall ratings.
• Customer Experience (30% of Overall Score): Where available, we studied our core areas of buying, policy management and claims as closely as possible.
  • Buying (35% of CX Score): We took into account quote, onboarding, binding processes in addition to agent communications in sales departments to get the most accurate score here.
  • Policy Management (30% of CX Score): Proactive agent/company rep outreach, online management tools, billing processes and responsiveness of support staff with making policy adjustments made up this score's criteria.
  • Claims (35% of CX Score): Speed and vendor coordination, during claim communications and clear timelines and coverage during this stress period were looked at to create this score.
• Coverage (20% of Overall Score): Our scoring structure for for coverage was made unique to cyber specific add-ons, services and core coverage.
  • First-Party Coverages (30% of Coverage Score): We looked at what coverages are available to protect from liabilities on the internal business end and how providers handle terms and exclusions.
  • Third-Party Coverages (25% of Coverage Score): This mirrors first-party coverages, instead looking at how cyber policy coverage handles risks coming from outside of the business from customers and clients.
  • Policy Strength & Modern Triggers (20% of Coverage Score): We analyzed sample policies to determine if they properly account for the evolution of cybercrime in the United States and any exclusions that may make them not up to date.
  • Cyber Crime (FTF Social Engineering) (15% of Score): We looked at how businesses are supported past just cyber coverage for security assessment technology, risk management and ultimately proactive claims management features and the vendors that work with insurers to offer them.
  • Coverage Clarity & Customization (10% of Coverage Score): This looks at how easy it is to understand terms in contracts simply and what choices are given to small businesses for core coverages and add-ons.

For any questions surrounding our business insurance content and methodology, please contact Connor Bolton (our business insurance editorial team lead) at connor@moneygeek.com.