So What Do You Think This Will Cost Me?

I've been flooded with a slue of submissions lately and some companies are start-ups or fairly new in business.  After my initial meeting with the insured and getting to know their company a bit, the ultimate question is posed: "So what do you think this will cost me?".  If only I had a magic wand!  I would wave that wand and poof, an accurate number would appear.

Bottom line is that every business has different exposures and risks to consider.  So not every company, even in the same industry, will be priced or reviewed the same.  If a company doesn't know what their estimated annual gross revenue will be or their estimated annual payroll, there is no way I can even give an accurate assumption of what the insurance program costs will be. 

However, the goods news is when you deal with an experienced broker they will be able to ask the important questions in your initial meeting and should be able to condense the back and forth Q&A.  Whenever I come upon a risk I have never insured, I think about it from an underwriter's perspective.  What would be their main concern with this risk?  Where does the insured's risk originate from?  Are they providing a product or service to the public?  Is the company advising their clients on financial needs or investments?  What safeguards or procedures does the company have in place?  Depending on the answers, it could prompt me to ask further questions.

It's always a good idea to poke around the insurance market before you get into a particular industry.  Sometimes what seems like a great business model, product or service could end up costing more then what the business budgeted for insurance costs.  What an average business owner thinks is a small risk could be a HUGE risk to an underwriter.  So don't be afraid to reach out to your insurance broker, ask questions and be prepared for those legit insurance costs down the line. 

You and your bottom line will thank you.