How do I compare business insurance quotes properly?
Compare the classification first, the exclusions second, the limits third and the price last. Two quotes at different prices are usually two different policies, and the cheaper one is often cheaper because it is rated for a narrower version of your business than the one you actually run — which is discovered at audit, or at claim.
Tell us the situation.
A licensed human replies the same business day — not an auto-responder, and not five producers calling at once. We shop it across our carriers and tell you if the policy you already have is the right one.
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The detail
Commercial general liability and workers compensation premiums are developed from classification codes applied to an exposure basis such as payroll or receipts, and are adjusted at audit against actual figures for the policy period.
Standard commercial lines rating practice
What this means for you
- CHECK THE CLASS CODE ON EACH QUOTE. If they differ, you are not comparing like with like, and one of them is wrong. This is the single most common reason a cheap quote becomes an expensive year.
- READ THE EXCLUSIONS BEFORE THE PRICE. Height, subcontractors, professional advice, damage to property in your care, and prior work are the ones that most often differ between two otherwise similar quotes.
- CHECK THE EXPOSURE BASIS. A quote built on an understated payroll or receipts figure is not cheaper, it is deferred — the audit at the end of the policy period settles it either way.
- MATCH LIMITS TO YOUR CONTRACTS, not to a round number. If a subcontract requires a per-project aggregate or a specific umbrella limit, a quote without them has not answered the question.
- ASK WHETHER ADDITIONAL INSURED IS BLANKET OR SCHEDULED. A blanket endorsement granting the status wherever a written contract requires it is worth real money to a business that signs contracts regularly.
- FIND OUT WHO IS BEHIND THE PAPER and how the carrier is rated, particularly on excess and surplus placements where the protections of the admitted market do not apply.
Related questions
- Why do quotes for the same business vary so much?
- Because carriers have different appetites, and appetite moves price more than efficiency does. A carrier that wants your class prices it to win; one that does not want it prices it to lose without formally declining. A large spread between quotes usually means you have found both, and it is a signal about fit rather than about value.
- Is the cheapest quote ever the right one?
- Frequently, yes — when the classification matches, the exclusions are the same and the limits meet your contracts. The point of comparing properly is not to talk yourself into paying more, it is to make sure that when you take the cheapest, you are taking it for the right reason.
- What is an audit and why does it change my price?
- Most commercial policies are rated on an estimate — of payroll, of receipts, of vehicles — and reconciled after the period ends against what actually happened. If you grew, you owe more; if you shrank, you may be owed a return. The unpleasant surprises come from uninsured subcontractors whose payroll gets added to yours, which is why collecting their certificates is the cheapest premium control available.
- How often should I remarket?
- Every year is usually counterproductive; every two or three, or whenever something material changes, is sensible. Carriers reward continuity, and an account that moves annually looks like one that will move again, which is not the profile that gets the best terms. Material change — a new operation, a new state, a large contract, a claim — is the real trigger, not the calendar.
Need this handled?
We do the filings, and we place the accounts other brokers decline — lapsed authority, claims history, new ventures. Tell us the situation and a licensed human replies the same business day.