Managing Growing Insureds

By Jamie Lewis, Assistant Vice President

As the weather is getting warmer, plants are blooming, allergy sufferers are sneezing, and most people are ready to enjoy being outside. Homeowners are beginning to think about starting improvement projects and developers are anxious to break ground on newly purchased property. You may also find yourself on the phone with your contractors much more often to help with project bids or review newly acquired contracts, as well as talking to your broker about policy changes that need to be made. As you try to keep up with their growth, it may be a good time to review their accounts and prepare for what will hopefully be a long and profitable summer for them.

If your insured’s policy is about to come up for renewal, this is a great time to discuss upcoming jobs and manage renewal premium expectations. If the insured anticipates a larger revenue increase, they will want to budget for an increase in the renewal premium as well. Ask your insured to prepare a detailed project list of the past few completed jobs, work currently in progress, and planned future projects. The renewal underwriter will want to know exactly what type of operations they are performing that will increase from prior years. The insurance company may also want additional information about employees, supervisors and management, and health and safety procedures to ensure that your client is prepared to handle this anticipated growth in their business.

If this rapid increase in production is occurring in the middle of the policy term, now would be an ideal time to carefully review their coverage. Larger projects often require higher limits. If your insured is bidding on more contracts that require a higher policy limit, it may be time to consider an Excess policy. This can increase the insured’s policy limits for their GL, Contractors Pollution Liability, Professional Liability, Employers Liability, and/or Auto policies. Having coverage for Additional Insureds, Waiver of Subrogation, and 30 Day Notice of Cancellation on a blanket basis can prevent any last minute endorsement requests. Making sure that your client’s policy is with a company with an A rating or higher will also be important. Many contracts have specific rating specifications in the insurance requirement sections.

Even with a quality coverage form and carrier, your insured may have a project that will require a modification in their policy. Having a standard template or questionnaire for your insured to complete for each request can help all parties understand the information needed and help provide a much faster response time from the insurance company. Whether it’s a higher or dedicated limit request, additional insured endorsement request, or another condition that will require their current policy to be altered, underwriters will most always need to know the following: 1) Where will the project be performed? 2) Who is the contract with? 3) What exactly will the insured be doing? (specific operations) 4) How long will the job last? 5) What are the anticipated revenues for this project? 6) What are the exact insurance requirements in the project? (i.e., what changes need to be made) Having these questions fully answered when sending the request to your broker can make the process much more efficient for all parties involved.

Your insured will inevitably be very busy handling the additional workload and expansion of their business. As their insurance agent, it is important to make sure their insurance policies are just as prepared for the growth. Noticing the signs of an increase in productivity and being prepared to handle the additional servicing will remind your client that you are there to support them and their insurance needs.