Choose an Insurer and Insurance Professional. - This seems obvious. But, in today's world of online quotes and Internet advertising, many business owners pick the first insurer to pop up in a search. In my opinion, online quotes and Internet advertising should supplement research into the best insurer for your business needs and not take the place of comparison shopping. A good insurance professional will have asked your basic information and done some of this comparison based on your business needs.
Set a face-to-face appointment to review and sign the application. - This step is, admittedly, a best case scenario and not always possible. But, it is better to meet with the insurance professional who will forward your application to the insurer. Many insurance applications ask for an explanation of prior claims (and to attach an extra page if needed) and this is where a face-to-face meeting can be invaluable. The insurance professional can help you present past claims in the best light. If feasible, a meeting at the place of business to sign the application is best.
Request and review the application in advance. - Insurance professionals and insurers will provide the application upon request. It is a good idea to review the application in advance and not to "fill in the blanks" and sign in one sitting. Review the application. Is the application for the insurer you have selected and for the coverage you have selected? Are there specialized questions that will require a specific employee to answer? Reviewing the application in advance will allow you to prepare in advance and to assemble your information.
Assemble real estate and location information. - All business insurance applications are going to want your business address. You will also need the physical addresses of all of your business locations, warehouses, retail outlets, rentals and similar locations. Keep in mind that for larger businesses a mailing address may differ from the physical location. Make sure the physical address is used or specified. Property insurance applications are going to need square footage, year constructed, sprinkler or fire suppression information, number of floors, and type of construction.
Assemble employee and officers information. - Many types of business insurance require employee and officers information and some require more information than others. Some may require information that will take time to acquire such as background checks, proof of a driver's or professional license, driver's record, credit, and other personal information. Plan in advance and set a deadline for employee and officer compliance well before any initial application is due.
Assemble property information. - Real property is an interest or ownership in land. "Property" are those physical objects and "things" owned by the business. Certain applications and insurance types may require specific information about the business property. A restaurant may need the make, model, and type of fire suppression in place for a grill or stove. Some electronics may need to be "scheduled" and listed in order to have coverage. Valuable or irreplaceable things may need professional appraisals.
Assemble an accurate history of prior claims. - No one likes this part. But it is a necessity. Prior claims must be revealed in accordance with the application and must be reported honestly. Failing to do so risks voiding the policy. Insurers frequently investigate prior claims after a new claim -- and, insurers share claim data. Keep all claims information: case or administrative numbers, parties, resolution, type of injury or damage. Often prior claims may need an explanation and resolution provided. Think about this in advance and prepare short summaries.
Assemble automobile information. - This is similar to gathering property information. Commercial auto policies may require automobiles to be listed on a schedule. The schedule will typically require make, model and VIN number.
Assemble third-party and interested party information. - Many interactions in business require one or more parties to be insured as a matter of contract. For example, most landlords will require the tenant to have property and fire insurance that names the landlord as an additional insured. Other contracts may require additional insured endorsements. Mortgage holders often require insurance. All of the information for these third-party or interested parties such as, address, proper name, physical location, should be assembled in advance so the proper endorsements can be prepared.
Prepare an unsigned draft application to discuss. - When meeting with your insurance professional or before submitting the application, create a "first draft" where you have filled in all of the required information. Review this draft with those familiar with particular information. An actual example, a warehouse owner reviewed a draft and noticed the number of trailers on a schedule did not look right. It seems the person in charge of the warehouse fleet did not think it was necessary to list the trailers that were broken and currently in the shop! Prepare and review a draft.
Prepare and sign the final application and send to the insurer. - Once you have a final application sign it and make sure it is forwarded to the insurer for review. Some insurers and some coverages may require an initial percentage of estimated premium to be paid with the application. Always ask if your business is covered between the time from application and acceptance as this may vary depending on coverage.
Insurance applications should always be prepared by the applicant or the applicant's appointed agent or officer. Never sign an application without reviewing and making sure your information is properly reflected. Some unscrupulous agents and/or brokers may report information inaccurately in order to achieve a premium level satisfactory to their client. This does not help the business and can risk coverage.
I always read the specific policy I am buying. I recommend business owners do the same, but this is not always practical and most policy language is standard. However, you will want to understand the definition of who is the "insured" under the policy. Does it include spouses? What about visitors to property? The "who is an 'insured'" clause should be read or explained.
What You Need
- Information about your business as noted.