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As a Commercial Lines Rater, it is a top priority to make sure that our business clients have peace of mind knowing that they are properly protected and insured. One of the most effective ways in doing so is making sure that each policy has the correct coverage for their exposure by evaluating data, class codes, and loss history to create fair, data-driven premiums.
Providing your Insurance Agent or Rater with the most accurate and up-to-date information regarding your business operations is a key factor in determining whether proper coverage is included in your business policy. It is important to not only to provide those initial details, but to also be transparent of any immediate or upcoming changes within your business. Have you recently hired new employees? Have you recently added pieces of equipment or vehicles? Have your annual sales increased or decreased significantly over the past year? What type of occupancy is within the buildings owned by our Insured? These are prime examples of information that may impact your premium.
Insurance class codes—both General Liability and Workers Compensation—are based on business operations. During the rating process, it is our job to take the initial business data provided by our clients to determine the proper exposures for their General Liability and Workers Compensation coverage.
For Example, if we are dealing with a business owner of a Hotel, there are multiple pieces of information from their initial business data that we would need to evaluate to determine the correct class code. Some of those items are noted below:
Given the information above, we can determine the General Liability class code may be based on “Hotel and Motels – With Pools or Beaches – Less Than Four Stories” or it could be a “Hotel and Motels – Without Pool or Beaches – More Than Four Stories”. Both class codes would be based on annual sales exposure. It is also important to determine if the hotel risk has a Restaurant or if there are other operations within the same building, as we would need to account for those additional exposures.
Once the General Liability class codes are determined, we can then move onto the Workers Compensation coverage. To continue with a hotel risk, we would need to evaluate how many employees the business owner has, and what their daily operations are. For example, we know that there would be Front Desk Clerks, Housekeeping/Janitorial Employees, and All Other Hotel Employees. If there is a restaurant within the hotel, we would also have to factor in any Restaurant Employees.
It is important to evaluate these exposures in the initial rating process to make sure that the commercial insurance policy is properly protecting the business. However, at the end of each policy period, an audit will be completed for both the General Liability and Workers Compensation policy to determine if these exposure estimates are accurate, and the policies would be updated accordingly based on those audited exposures.
It is important to be transparent with your prior loss history when finding new insurance coverage. If there have not been any claims within the last 3-5 years, many carriers will be able to provide better rates as they can determine that any risk for future claims is at a minimum. However, on the opposite spectrum, if there are multiple claims within the 3-5 year period, this puts the business at more risk for future claims, and therefore, higher rates would be applied. Based on the higher risk, this is where you would see a premium increase compared to a premium decrease. Once any prior claim is outside of the 3-5 year period, this is where you would start to see less of an increase on the renewal policy and potential decreases in premium.
Tropolis follows the everyday values of Integrity, Ownership, Leadership and Service. As your trusted Insurance Agent and Commercial Lines Rater, we use these company values to make sure that we provide the proper coverage for your business needs. With the use of the newest technology along with our invaluable knowledge and experience within the industry, we can provide accurate quotes and policies based on accurate data. It is our top priority to establish the best relationships with our clients while also ensuring they are properly protected.