Getting business insurance can be a lengthy process depending on the types of insurance needed and how large the business is. With all the necessary underwriting information readily available, the process of completing insurance applications can be much less time consuming. Here is a short checklist of some of the information that will be needed to apply for business insurance.
Business Details and Basic Information
- All the names the business operates under including dba’s, affiliated companies, and subsidiary companies
- The mailing address and contact phone number for the business
- The legal entity information including tax identification numbers
- Detailed descriptions of business activities and operations
Business Liability Insurance
- Current quarterly reports for sales and payrolls are helpful in making projections for the coming fiscal year. Liability rates are determined by either payroll or revenue, depending on the type of business.
- Have sales and payrolls separated by the type of operations if your business has more than one revenue source. For example, a home improvement store might also have an installation service. Revenues from each operation should be kept separate for accurate rating.
- The current net worth of the business is helpful in determining a sufficient amount of liability insurance. Standard policies cover up to one million of liability insurance. If the company net worth is higher, an umbrella policy may be needed for additional protection.
Commercial Property Insurance
- Does the business own any real property? Is the business named on the property deed as the sole owner of the property or is it jointly owned or owned by a holding company?
- What is the replacement cost estimation the buildings? How long ago was the estimation made and how was the estimation completed?
- Inventory reports for the business’ personal property are necessary to choose a limit for contents insurance. Values are needed for office furnishings, supplies, computers, equipment and machinery, raw materials, stock, and items held for sale. Values should be reported at replacement cost levels and not as depreciated, amortized,or retail values.
Business Income or Business Interruption Insurance
- Income statements from the last 24 months should be available to complete the business income worksheet.
- Expense Reports from the last 12 months are needed to determine which business expenses would continue and which would not if business operations were to be interrupted due to a covered loss.
- Payroll reports from the last 12 months are needed to estimate how much and for how long payrolls should be continued after a covered loss.
Workers’ Compensation Insurance
- If you don’t already know what Workers’ Compensation class codes apply to your business, have position descriptions handy to help the insurance company or broker determine the correct classifications.
- Workers’ Compensation discounts for safe workplace or drug free workplace are available in many states. Are the applications and supporting documents completed?
Commercial Auto Insurance
- Drivers license information and updated motor vehicle reports for any employees driving company vehicles will be needed, including owners and managers. Checking driving records of employees is not only good risk management but could help prevent problems with the commercial auto insurance application.
- Vehicle identification numbers for all vehicles are necessary.
- For trucks, the usage of the vehicle as well as the Gross Vehicle Weight (GVW) will be necessary. GVW can be found on the vehicle title.
Professional Liability/ Errors and Omissions
Professional liability insurance or Errors and Omissions insurance require lengthy applications and often take time to get a quote. Waiting until the last minute to work on this is not a good idea. Items usually needs are
- List of the largest jobs or projects
- Average receipts
- Copies of contracts and legal couments
- List of claims in the past five years or situations which might give rise to a claim
Being prepared for the business insurance application process not only saves you time and effort, but is greatly appreciated by underwriters. It demonstrates that the business takes the insurance program seriously and that the business management is organized. These are just the qualities insurance underwriters are looking for when approving business insurance applications.