The underwriter is the person at the insurance company who evaluates risks and decides whether to provide coverage and at what price based on questions about a business's operations, financial stability, safety measures, loss history, management, and more in order to understand the risk being transferred. Prior to binding coverage, underwriters will review documentation like loss runs, conduct inspections, and check claims databases to validate information provided by the business owner, as their honesty and interaction during underwriting can determine whether a carrier accepts or rejects the risk. Understanding the underwriter's role and perspective helps business owners present themselves as a qualified risk for insurance.

1. What Is Your Underwriter
Looking For?

2. To long-term risk managers, your
insurance underwriter is almost
a member of the team, but
many small business owners
remain confused about the role of an
underwriter. And long-term managers please
note: Even you may need a refresher course in
today’s underwriter and how he or she impacts
your organization

3. Here’s a primer on the important role this valuable
person plays.
Underwriters hold the key to insuring your business
or organization. The underwriter is the person at
the insurance company who makes the decision to
accept a certain risk and at what price, as all
insurance companies are in the business of
transferring risk for a fee. All the questions they ask
about you or your company help them make that
decision.

4. Here are some questions they may
ask:

5. • How long has your business been in operation?
Underwriters like to see three full years of
operation. If your business is new, it will be
harder for the carrier to insure your business at
the best rate.
• Is your business financially sound? For example, if
you own investment properties and you are
“upside down” on several of them, underwriters
may decline your account. Prior cancellations for
nonpayment of premiums will hurt your risk
profile as well.

6. • If you have a vehicle fleet or commercial
buildings, are they in good condition, clean
and outfitted with adequate safety measures?
Are your vehicles in a secure location when
not in use?
• Where is your business located? The safety of
neighborhoods is a prime concern, not just for
you but for your insurance carrier.

7. • What is your loss history in the past three to five
years? Most underwriters anticipate a better-
than-average loss history. You can explain some
outliers, but standard insurance carriers will
hesitate if your business has an unfavorable loss
history.
• Do you, as owner of the business, actively
manage the operation on a daily basis? If so, you
are demonstrating that you have control of the
operations of the company.

8. • What loss prevention programs are in place? Do
you have a safety manual, and do you conduct
frequent safety meetings? For workers’
compensation insurance, many underwriters
require a return-to-work program that brings
injured workers back to work temporarily after an
injury.
• Does your organization have a drug and alcohol
policy? Is it enforced? Do you prescreen
employees for criminal and driving records?

9. • Are vehicles available for personal use? How
many drivers do you have under the age of
25?
• Is your insurance application filled out
completely and neatly? A sloppy application
may indicate a lack of attention to detail.
Especially when purchasing professional
liability coverage, this can immediately sour
the underwriter.

10. Prior to binding coverage,
underwriters will review your loss
runs, request inspections and
check insurance claims
databases. Most insurers validate and cross-check
information on your application. Your honesty and
how you interact with the carrier in the initial
stages of the underwriting process can mean the
difference between that carrier accepting or
rejecting your business.

11. Randy Bett
www.BetterGroupRealEstate.ca