Your Liability insurance premiums are based on two fundamental factors: First, the types of operations you perform (carpentry, electrical, etc.); and second, the amount of payroll and/or revenue assigned to, or arising from, those services. Although your business and insurance programs might use other methods and variables, these are the two key factors in nearly all Liability ratings. Therefore, it’s important to calculate your payroll and revenue numbers as accurately as possible.
One possible area of confusion arises from the fact that insurance rating rules don’t calculate these numbers in the same way that your tax advisor or bookkeeper would for general business purposes. This is to your advantage, because most of the insurance rules dictate what you don’t have to count in determining payroll and revenues used to rate Liability premiums. For example, special rating rules minimize the amount of any overtime pay you must include in the total used in calculating premiums.
We can help show your accountant or bookkeeper the rating rules that will help track these numbers to give the most accurate premium. Be sure to advise us of any significant changes in your operations that might require revising the classification of your business for liability rating purposes. Having the right numbers assigned to the correct classifications can make obtaining an accurate premium audit quick, clean, and hassle free.
If it affects your insurance, it affects us. Let’s work together to keep your insurance program a great value for your investment.