Having the correct underwriting information makes the process of purchasing workers compensation insurance easier.
After you’ve done your due diligence in finding the right broker/agent for your business (if you didn’t, please read Questions to Ask before Buying a Workers Comp Policy) and are satisfied with their answers, its time for the next step. Now is the time to compile your underwriting information to help your broker obtain a competitive premium quotation.
Here’s a checklist of what you’ll need in order to solicit a workers compensation quote.
I. Full description of your business. Provide as much information as possible. If you have brochures, even better.
II. Your exposures such as:
- Locations: Full address of each location
- Estimated number of employees.
- Payroll: In order to property rate your policy, provide the payroll by state and by class code as follows:
- Class Code: If you have a prior workers compensation policy, you can use your existing class codes as a guide. If you are getting quotes for a new business and don’t have a prior workers compensation policy, provide a payroll break out by duties. If you are confused, speak with your broker. They will help you to determine which category the payroll belongs.
- In addition to providing the class code, the payroll should be broken down by location. I.e., if you have clerical office payroll in both New Jersey and Michigan, don’t lump them both together in one clerical category. Separate it by state.
- Loss information for the past 5 years. If you have not been in business for that long, provide the information you have. Make sure the loss runs are currently valued. Currently valued means that you’ve recently requested and received the loss information. The date the loss information was printed or ‘valued’ will appear on the loss runs. The loss runs you used last year to solicit your insurance will not do. Be prepared to explain losses. If there are many large losses, the insurance company is going to ask for details. Similarly if there are many small losses, be prepared to explain those also.
- Five years annual sales. Your sales trend gives the insurance company an indication as to the direction of your business. If sales are booming, it is assumed that your payroll may increase to accommodate the increase in work and visa versa. If you’re a new business and don’t have five years worth of sales figures, giving an estimate of projected sales will be adequate.
This basic information is enough for your broker/agent to get started. Depending on your business, they may ask for clarification and/or additional information.