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If you’ve been shopping for business insurance lately, you’ve likely seen or heard reference to A-rated insurance companies. Heck, even we make sure to let you know that Talage only works with A-rated insurance companies. But what does it all mean? And does it even matter?

What Does an A-rated Insurance Company Mean?

A-rated insurance companies are generally considered the top performing in the insurance industry in terms of financial performance and credit-worthiness. This means these companies pay creditors and pay claims. Pretty straightforward - it’s kind of a business dependability rating.

So an A-rating is Important?

Short answer: yes. The element you really should care about is that A-rated companies have the financial stability to reliably pay their claims - if you or your employees need to be paid for a claim, will they do it? A small business simply has faith that if they have business insurance their claims will be paid out. That’s not the case with every cut-rate insurance company out there. Sure, you got a great deal, but if the company can’t afford to pay its claims, what’s the point? With an A-rated insurance company, you can feel confident in knowing that you’re truly covered. After all, that’s the whole point of having business insurance anyway, right? You want to get an insurance policy from a top-rated insurance company.

Who Decides if an Insurance Company is A-rated?

Like many industries, there are credit rating organizations that determine these rankings - in insurance, you have A.M. Best, Moody’s, Fitch, and Standard & Poor’s. Each of these agencies actually has its own rating scale and, you guessed it, they don’t really correspond with each other. For example, A.M. Best’s highest rating is A++, Fitch and Standard & Poor’s highest rating is AAA, and to make things more complicated, Moody’s has ratings such as Aaa, Aa2, A2, etc. Meanwhile, Fitch’s fifth-best rating is an A+.

Thoroughly confused now? Rightfully so. Just know that if you find out an insurance company’s rating, make sure you look at it a little closer. Generally, an A-rating is going to be excellent and trustworthy. At Talage, we go with the A.M. Best ratings and only provide you quotes from the top-rated (A-rated or above) insurance providers.

How do I Find a Top-rated Insurance Company?

When shopping for business insurance, you can request to know a company's rating. Whether you’re working with an agent or through an insurance provider directly, they should be able to easily provide you this information. Once you have the rating, make sure you feel comfortable with it. Creditworthiness is one very telling measure of an insurance company, but you may also place value on ease of access, customer service, or other personally important factors. Of course, you can also just make things easy on yourself and shop for your insurance via Talage, and be certain that any insurance quotes you see on your screen are from top-rated insurance companies.