Commercial Insurance

Putting together a commercial insurance package can be a bit tricky and sometimes overwhelming, but with a little knowledge and understanding under your belt, it does not have to be an inundating task. A reputable and knowledgeable insurance specialist or business advisor will help you sort out the pieces and understand what is involved.

Commercial insurance for businesses begins with the proper classification for your business. The classification process includes describing in great detail how the business operates, how the product is sold and ultimately used and the extent of the services provided. There are thousands of combinations that can be used in classifying a business for commercial insurance purposes and it is critical that the correct classification be used.

After the business has been properly classified, it is time to establish the rating for the business. The rating will determine the premiums for the commercial insurance and it is also critical that the proper rating be determined and used. There are four factors that help determine the rating of the business and they include the number of part time and full time employees, gross annual sales, gross annual payroll and the square footage of the office space.

The next step in determining the rates for your commercial insurance rates is to provide historical data including claim reports and the analysis of the events involved. Of course, if there are no events involved, the business will be considered clean. If there are claims, it is essential the data surrounding the claims is accurate, as that accuracy of data is key to determining commercial insurance rates.

The last step in the process to determine commercial insurance rates is a demonstration of how the business addresses the exposure to risk. Putting safety and loss prevention programs in place as well as mandating continuing education programs will help the rates a great deal. Programs that will focus on minimizing the frequency and severity of claims can provide up to 25% in credits when pricing the commercial insurance package.

Commercial insurance quotes can fluctuate as much as 50% below the standard to as high as 50 to 100% above the standard. Taking the time to be as detailed and thorough as possible when presenting the company frame work and all the supporting data will help in pinpointing the right cost for commercial insurance.

When choosing commercial insurance, it is critical that you deal with a commercial insurance specialist. If you present the company information to someone who is less than knowledgeable about your type of business, your data may not be translated correctly and the results are far below what they should be for your business.

When choosing an agent or broker for the purpose of putting together a commercial insurance plan, you need to find someone who has the educational background and the experience and expertise in your industry. Granted, the most expensive insurance representative will not always be the best and the cheapest will not always be the worst, but the most experienced will usually get the job done.