The Key Questions You Should Be Asking Your Insurance Broker
Okay, you finally found a great insurance broker to help you purchase insurance for your business. So, what should you be asking to ensure you get the right insurance coverage for the best value?
Below are a few key questions that can help you communicate with your broker to ensure you get the correct insurance in place for your business.
1. Does the proposed insurance coverage satisfy the necessary state/industry/lender requirements?
Make sure to discuss the WHY! Communicate with your broker the reasons why you may be needing insurance. Do you need it to fulfill a state licensing or certification requirement? Maybe there are specific limits to meet? Are you taking on a new job/client/supplier that is requiring you to have certain insurance coverages? Maybe you need relevant endorsements and specific forms. Make sure your broker reviews your requirements with you and confirm the proposed insurance will satisfy your requirements before you commit to purchasing.
2. What am I paying in service fees aka broker fees?
As mentioned in this previous article, brokers can charge a fee that is added to the cost of your policy. It is always best to be direct and ask what that fee is to make sure it is a reasonable cost added to your policy. Keep in mind, these fees can be determined by the broker so if you do feel they are unreasonable, discuss them with your broker and see if they can be reduced.
3. Will the insurance company perform audits during the policy period?
When you have a commercial policy in place, you will most certainly be audited at some point during or after your policy term. Especially with policies such as Workers Compensation and General Liability. What this generally means is that the insurance carrier will contact you directly to verify information. This can affect your premium so it is important to understand which of your policies will audit and more importantly, how they audit. Is it done over the phone? Do they require documentation? Do they do a site visit? Understanding audit terms in the beginning of your policy is crucial.
4. What exclusions/restrictions does the policy have?
This can be important as most policies have embedded exclusions which outline what is not covered. People always hear about claims not being covered as considered an “Act of God” but there are more common exclusions such as roofing coverage being null and void if the roof is left open to rain. Or claims only being honored during the policy term and not after. Always ask your broker to go over the common restrictions the policy may have.
5. How does the policy renew?
Some policies will renew automatically and some will need to be renewed by you through your broker. This is important to understand as some policies will be automatically renewed for another 12-month term without your knowledge! Always ask your broker what the renewal process is and how early you will get notified when renewal is coming up.
If you can consider asking these key questions when working with your broker, we promise you’ll be glad you did as they can save you time and money!
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