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Top Ten Mistakes commonly made when buying Commercial Insurance:



  1. Price only- spreadsheeting- does not take into consideration value added services, scope of coverages or exposure bases, professional expertise or relationships of broker.

  2. What services are provided and included- such as specialized Claims Reviews (past and future), or Loss Control and Risk Management.

  3. Start early. Don't diary your calendar for 30 or 60 days from expiration or you will end up making your decision at the last minute.

  4. Too many brokers- only muddies up the waters- pick one you have confidence can best handle your insurance portfolio and has good market representation- or pick two and assign markets based on an interview of relationships and capabilities.

  5. Withholding information- deceiving by omission. Give the broker ALL the info early.

  6. Does the broker really know your business and all it's nuances? Did he inspect all your facilities?

  7. Quoting apples to apples from last years quotes. Only perpetuates mistakes. An honest conversation with a broker who really knows your ( and his ) business can best evaluate your exposure to risk and how to best plan for it.

  8. Brochures or websites that leave an incorrectly bad impression on an underwriter. Saying you are much more ( and therefore a bigger exposure risk ) than you really are can dramatically affect your pricing and even insurability at all.

  9. Not considering other coverages like EPLI, Crime, Umbrella, Earthquake etc.

  10. Compare the carriers- rating, admitted v. non, forms, endorsements, value added coverages, claims attitude.

  11. Other mistakes made because the broker didn't know or take the effort to make sure of:
    • Return To Work (RTW) Credit
    • Review ex-mod worksheet
    • Recalculations for claims closed at less than 60%
    • Accuracy of Policy
    • Final Audits and Proper Classifications



Top Ways to Get Cheated by Insurance Brokers:

  1. Extra $ for required Additional Insureds, should be one charge included in annual premium

  2. Improper Liability or WC codes- intentionally or not- will get changed at audit resulting in higher premiums after the fact.

  3. Underestimating payrolls &/or receipts, or not including or excluding things such as officers payroll, returns or freight allowances, subcontracts, Owner Controlled Projects, Vendor's Endorsements.

  4. Minimum & Deposit (M&D) requirements and Minimum Premiums.

  5. Broker Fees- can actually save you money if used properly but should be fully disclosed.

  6. Excessive commission levels

  7. Audits- did you get your Return Premium (return commission)?

  8. Check policies to proposal- get a written proposal with limits, premiums and rates.

  9. Finance charges- what premium payment plans are available from the carrier? Finance charges are highly variable dependent on many factors that are for the benefit of the broker or carrier only, such as early check release. Brokers may want to finance so they get all their commission up front.

  10. Loss sensitive programs- fully understand the maximum downside or exposure, and what your alternatives are.

  11. Broker withholding important underwriting info that you are entitled to such as loss runs, ex-mod worksheets, unit stat filings etc.

 

Insurance Integrity and Personal Service
GOLDEN PACIFIC INSURANCE SERVICES, INC.
License# 0773850

181 West Huntington Dr., Suite 200, Monrovia, CA 91016
Mailing Address: P.O. Box 7045, Pasadena, CA 91109-7045
(626) 275-3000 voice, (626) 275-0130 fax

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