When you’re running a business, insurance is one of those things that you know you have to have, but you don’t want to think about too much. There are so many different types of policies, state regulations and industry requirements that trying to determine what you need can be overwhelming, and that doesn’t even include trying to get the best rates once you settle on a policy.
Fortunately, insurance brokers will manage all of that for you. But to do so, they need to know a lot about your business. While you may not want to know all the details and intricacies of securing the various business insurance policies that you need, you want to be sure the insurance broker handling things for you can get you comprehensive coverage at the best possible rates.
What You Want to Hear
The primary thing you want to hear from your broker is a lot of questions. The more details the broker has about the way your business is structured, the sorts of policies and procedures you have in place and the types of risks and exposures your workers encounter, the better able he is to find you the best policy matches.
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Of course, the kinds of questions the broker asks matters, too. Some of the basics may seem obvious, like how many worker’s compensation claims you’ve had in the past and what types of safety programs you have in place. Some other important questions might not seem relevant right away, however.
Some examples of these include:
- What are your hiring and HR practices?
- What types of clients do you typically serve?
- Exactly what kinds of lifting activities do your employees perform and how frequently?
- Do you have a program in place to aid injured employees in returning to work?
- How long have you been in business?
- Do your employees ever have to work at great height or underground, and for how long?
- What type of experience does your management team have?
- Is your work seasonal?
- What is your current loss control policy?
Not all of these questions may be necessary depending on the type of coverage you’re seeking, but in general, the more your broker asks about your business, the better.
Why It Matters
While it may be tedious at times, it’s important to provide your broker with as many details as possible in response to any questions asked. That’s because the methods for calculating coverages and premiums take into account a wide range of data that insurance companies use to determine your risk for various types of claims. Your broker will use the details about your company to develop a profile of your business, and then use that when comparing rates and options available through various insurers.
Finding the best fit for you, and generally the lowest rates, is your broker’s goal, and to accomplish it, the broker needs all information that could potentially affect those rates, both positively and negatively. To ultimately determine your premiums, this information will be combined with data on accident frequency in your industry, state regulations and guidelines and experience modifiers, and the more you can give, the better the chance that your rate will be fair and appropriate for your risk.
What You Can Do
There are two main things you can do to ensure you get the proper business insurance coverage at the best rates for your company. The first one is to choose a knowledgeable and experienced broker that you have confidence in. You may want to speak to a few before settling on one, and a lot of what you should evaluate them on is the type of questions they ask about your business.
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You should also take the time to gather as much detailed information as possible in answer to those questions. The broker's job is to represent you to the insurance companies in the best possible light, and only you can provide the tools needed to do that.