Commercial General Liability Insurance

Commercial General Liability Insurance

WHAT DOES IT COVER :

At a high level commercial general liability insurance is designed to transfer risk from both public liability obligations imposed on your corporate entity as well as certain contractual obligations you agreed to within your contract for service with your clients or government entities.

WHAT TO LOOK OUT FOR :

The mistake most purchasers of commercial general liability make is that they believe all policies are written the same; THEY ARE NOT. Simply because (2) quotes both offer $ 1million dollars per occurrence / $ 2 million dollars aggregate doe NOT make them equal. It’s all about whether that particular policy issued by that carrier will “TRIGGER” in the event of a claim.

Many commercial general liability policies have a great many exclusions attached to them that make them worth less than the paper they are written on. Commercial general liability insurance is a complex financial instrument that must be properly evaluated by an experienced , licensed insurance broker or a Risk Advisor who is conversant in your industry and business model. Getting this evaluation wrong can wipe out years of hard work, leading to bankruptcy.

SMART QUESTIONS TO ASK :

Endorsement are the key to evaluating the policy. Most commercial general liability policies start with a very basic contract. Then they either give coverage or take coverage away by endorsement.
Ask them to specifically go over the exclusions section of the quotation. If there was NOT a forms and endorsement section included in the quote, shut it down right there as the broker is NOT being forth right . How can you evaluate the purchase without a complete list of what your actually buying?
Understand how the policy is priced. This is called “basis”. How do they understand how much to charge your company versus a billion dollar company in the same business? The answer is “basis”. Commercial general liability insurance carriers will build a “rate” around the volume of business you are doing.

Examples of Ratable Basis :

- Gross Sales
- Units
- Head Count
- Square Feet
- Payroll
Is the carrier “Licensed & Admitted “ within the State you are doing business in (home state) ? This is critical if the carrier becomes “insolvent” and can no longer pay claims. IF the insolvency occurs AND the insurance is provided by a carrier who IS licensed and Admitted in your home state , then any claims you have pending with that carrier may be picked up by your home state’s guarantee fund . The Guarantee fund is a pool of capital all licensed & admitted carriers pay into in the event (1) or more becomes insolvent. Think of it as a sort of FDIC protection for Insurance Companies.
Does the commercial liability insurance you are about to purchase conform with you EXISTING contracts with your customers? All your leverage for negotiating coverage occurs BEFORE you bind the commercial general liability insurance. If you need to amend the commercial general liability insurance AFTER you bound coverage, they can charge you whatever premium they see fit. Make your your insurance broker or your risk advisor has vetted your current contracts to make sure they adhere to your contractual obligations or your education is about to become very expensive.

Still Have Questions ?

Give us a call at (914) 357-8444.

Most Insurance Agencies:

Re-Active NOT Pro-Active
Simply transact the purchase of insurance.
Report claims ; don’t assist in managing your claims which is the largest cost driver.
Provide “quotations” days before the renewals.
Provide little to no resources to help drive down your costs.

Most Brokers have no plan or strategy on your account!
They fling applications to the carriers with NO story or narrative explaining why the insurance company should give your account the best terms.
Show up at the last minute; asking you to make a 6 figure purchasing decision within 48 hours, with no alternatives!

Contact A Risk Advisor

The Metropolitan Risk Difference:

We analyze your claims history using our proprietary trend analysis software and review your company’s financials to determine what your true cost of risk is.
We will pinpoint several areas within your organization where opportunity exists to recapture lost dollars. We can also lower future expense costs letting you allocate those dollars in a more productive capacity, ultimately leading to a positive net return. Our focus here is to identify Net Income Loss and your Total Cost of Risk.
Develop a strategic, SIMPLE plan to improve the performance of the account by applying our unique profit tools. This will alleviate the friction points in your organization that are causing you a Net Income Loss, High TOTAL COST OF RISK expense, and ultimately degrading the performance of your account.
Share our strategy with select insurance carriers that Metropolitan Risk has partnered with that understand and trust our firm to improve the performance of these accounts.
Return with insurance quotations, a strategy, and deployment schedule going forward along with account goals. We then set the expectation for account performance.
Upon the next renewal term, we should have a great story to tell the insurance marketplace, resulting in lower insurance costs and more importantly, lower total cost of risk.