How do I know if my insurance agent is upselling me?
An agent is upselling you when a recommendation can't be tied to something your business actually does, with a number attached. A sound recommendation names the risk, what a claim from it would likely cost, and what the extra coverage pays; padding leans on fear, bundles or "most clients buy this." This page is about commercial policies (liability, property, auto and workers' comp), not personal insurance; five plain questions below show the difference.
- A legitimate recommendation points to a specific thing your business does and puts a dollar figure on what could go wrong.
- Most agents are paid a share of what you pay, so more coverage means more pay. That is a reason to ask questions, not to assume bad faith.
- Most small businesses are short on coverage rather than over-covered, so "buy more" is often right — when it is tied to a real risk.
What does an honest recommendation look like?
It names something your business does, what a claim from that could cost, and how the added coverage pays for it. If any of those three is missing, ask for it before you agree.
Picture an owner whose staff run errands in their own cars. An honest agent says: if an employee causes a crash on a work errand, the injured driver can sue your business, your car policy does not cover cars you don't own, and here is the price of adding that protection. The risk is real, specific and priced.
Padding sounds different: "you never know," "everyone in your line buys this," or a package that stays the same no matter what you tell the agent about your business. The National Association of Insurance Commissioners advises owners to make sure their agent knows the business well enough to advise on it with confidence. (Source: NAIC) An agent who hasn't asked how you operate isn't in a position to recommend anything.
How are insurance agents paid, and why does it matter?
Most agents are paid a commission — a percentage of the price you pay — by the insurance company. A bigger policy pays the agent more, which is a built-in pull toward selling more, and it is fair to ask about it.
Rates vary by product. One industry breakdown puts independent agents at around 15% of the first-year price on new home and auto policies, captive agents (who sell for one company) at 5% to 10%, and renewals at 2% to 5%. (Source: Insure.com) Business policies follow the same pattern, with their own rates. Some agents also charge a separate fee; if yours does, ask for it in writing.
The Small Business Administration makes the same point: because agents earn commissions, it matters to find a licensed agent who is interested in your needs. (Source: Small Business Administration) Commission doesn't make advice wrong. It means the advice should come with reasons you can check.
What does "insurance follows the business" mean?
Coverage should be sized to what you actually do — your sales, payroll, buildings, vehicles and contracts — not to whatever a product package happens to include. When the business changes, the coverage should change with it, in both directions.
Pricing already works this way. Liability premiums are typically tied to a business's sales and payroll estimates. (Source: NAIC) So the questions an agent asks are the clue: one who wants your payroll by job, your locations and your lease terms is sizing coverage to you. One who quotes from a single number is selling a product.
A bundled policy that combines liability and property for a small business — insurers call it a business owner's policyBusiness Owner's Policy (BOP) One bundled policy that combines liability and property coverage for a small business, usually for less than buying them separately. Insurers call it a business owner's policy. — is often good value, but only when its pieces match your risks. If you stop delivering, delivery coverage can go. If a new lease demands a higher liability amount, the limit should rise. Your quote preparation list is the same list a good agent sizes coverage from.
Which questions expose padding?
Ask these five about any add-on or higher amount. An agent with a real reason answers all five plainly; one who can't answer the first two is padding.
- What does my business do that this covers? The answer should name an activity, a building, a vehicle or a contract.
- What would a claim like that cost? Expect a dollar range, and where it comes from.
- What does this add to my yearly price? Ask for it as a separate line, not folded into a total.
- What happens if I skip it? Who pays, and how much, if that claim comes in.
- Does a lease, loan, contract or law require it? If yes, ask to see the clause.
Asking matters because many owners can't judge a policy alone: the 2025 Hiscox survey found 74% of owners could not correctly describe what basic liability coverage does. (Source: BestMoney, citing Hiscox) The questions to ask before you buy cover the rest of the relationship.
When is buying more actually the right call?
Buy more when a lease, loan, contract or law requires it; when your business has outgrown the figures the policy was built on; or when one plausible claim would cost more than your current limit.
Underinsurance is far more common than the reverse. The 2025 Hiscox report found 77% of small businesses underinsured, up from 75% in 2023. (Source: Risk & Insurance, citing Hiscox) Claim costs keep climbing too: The Hartford's average slip, fall and customer-injury claim rose from $20,000 in 2015 to $45,000 in 2025. (Source: The Hartford)
An extra layer of liability coverage on top of your other policies — an umbrella policy — is the usual answer when one bad lawsuit could outrun your limit. Whether your current amounts hold up is the subject of is this enough coverage.
Frequently asked questions about upselling
No. Spotting risks you didn't know you had is part of the job. The test is whether the suggestion is tied to something you actually do and comes with a price you can weigh.
Usually, yes. Many add-ons can be removed mid-term with a written change to the policy, though some policies keep a minimum charge or apply a fee for ending coverage early. Ask what you would get back before you decide.
If a recommendation doesn't pass the five questions, yes. Bring the quote and your current policy's summary page to another licensed agent and ask them to explain what each piece covers.
Want a second read on a quote?
Send us the quote you were given. We will tell you which pieces match your business and which ones don't.