Your business insurance is coming up for renewal and you are interested in getting competitive bids for the renewal. Scott Hauge, President of CAL Insurance and Associates gives us some tips on how to start and what to do.
- Start the process about three months before your policy renews.
- Identify brokers beside the incumbent broker that understand your industry and can recommend an effective insurance program for you. Obviously price is important but the brokers you choose should also be able to make recommendations on coverage and risk management and must be able to provide you the services your company requires. Insurance is not a commodity.
- Manage the insurance brokers you select. Most business people do not understand that only one broker can get a quote from an insurance company. Therefore, ask each broker that is quoting on your insurance to identify the four companies they will be approaching. If you really want other brokers beside your current broker, do not allow your current broker to give you a list of more than four (4) companies.
- Be prepared to provide four (4) years of loss history for your company. You can get this from your current broker or brokers quoting on your insurance can help you obtain these. These loss runs must be less than 90 days old and you should start this process at least 90 days before your insurance comes up. If you are serious about getting an accurate quote on your insurance never ask a broker to quote without loss runs.
- Be prepared to provide your current insurance policies (the exception is workers compensation) to the brokers that are quoting on your insurance. Also be prepared to provide copies of certificates you will require. The companies quoting your insurance may not be able to provide what they need.
- Update your payrolls and gross receipts for the renewal. One common mistake businesses make is that they provide payrolls and gross receipts from the current policy. What you need to do is project these for the renewal period.
- Require all brokers quoting, including your incumbent broker, to provide you summary of coverages they are proposing and the payrolls and gross receipts they are basing the premium on. Also ask them to provide recommendations they think you should consider.
- Ask the brokers quoting on the services they provide. Many brokers not only provide insurance but can help you with Human Resources issues or perform other services that can help your company.
- Once you have selected your broker, put in place a service agreement. For example, do you want to be contacted every quarter or every six (6) months? Do you want a review of all claims every quarter or six months? Depending on your size you may want this every month.
- Be prepared to provide a list of all of the people that will require proof of insurance. For example your banks, customers, and landlord. Make sure on the certificates you provide to your customers that you indicate if they are to be named as additional insureds.
- The last point is that all brokers want to be the last one to provide you a quote. Set reasonable deadlines and hold all brokers to those deadlines.
Your insurance broker should be viewed as a trusted advisor like your accountant, attorney, and banker. Treat them as such. Tell all brokers quoting that you will not shop their quote and hold to it. Never allow your incumbent broker to take over a competitive broker’s quote on a broker of record. You should not shop your insurance more than once every three years or at the most every other year unless you are not satisfied with your broker.
Please visit http://www.cal-insure.com/ for more information or let us know if you have questions and we can connect you with Scott.
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