You may or may not already know this, but the insurance marketplace is 'hardening.' This is a natural cycle that follows economic and regulatory trends - which I won't elaborate on now.
In a 'soft' market, you have inherent leverage. Every carrier wants a piece of your business, and every broker with a cellphone and access to the internet is promising you >30% savings on every renewal.
In a 'hard' market, everything changes. Carriers become stricter, and coverage is harder to obtain. Premiums rise across the board, exclusions for certain risks become more common, and deductibles soar. This is where the market is now, and it's only going to get worse.
Hard markets create wary underwriters. It is not uncommon for them to dig through your Build Zoom, your Yelp Reviews, your website, and even your social media. For property coverage, underwriters will sometimes even look at your building from Google Maps street-view, or review satellite photos of your roof. If they find something they don't want to see, you can expect significant pricing increases or outright declinations (which are often unreversible).
I've seen this firsthand, time and time again - from photos containing outright OSHA violations (OSHA looks at your website too, by the way), to services advertised that are outside the scope of the carrier's appetite.
Let's say you're a plumber and often work with a subcontractor that does mold remediation. You never perform mold remediation yourself, but you like to have it on your website to appear as more of a one-stop shop, or to capture those few extra potential customers in need of that service. If an underwriter sees that - declined. No reversals. No second chances. They could have been the only carrier willing to offer you competitive terms - and now they are gone.
I cannot stress enough that I've seen this happen for nearly every class of business in construction - no general or artisan contractors are spared the heightened diligence that comes with the market's trend.
Some people approach the commercial insurance marketplace with a sense of entitlement. They've been paying high premiums for years! The carrier should earn their business - not the other way around!
Unfortunately, this mindset is going to kill you in the hard market. You need to sell your risk to underwriting, and that means you need to be coachable and proactive. Sleeping behind the wheel and sitting on renewal autopilot is going to blow up in your face - it's only a matter of time.
Here's a few suggestions on how you can make your business appear more appetizing to an underwriter, and navigate the hard market:
Have your broker include a cover-letter on submissions when you go to market. Tell your company's story, explain losses in detail (especially the steps you've taken to prevent similar losses in the future), and thoroughly explain all risk management and safety protocols you have in place. This will help you stand out.
Review your online presence and advertising. Is there anything that could be misconstrued or hurt your chances of obtaining coverage?
Start the renewal process early - you cannot afford to wait until the last minute.
Include a submission close-out email. If you choose not to go with a carrier, send them an email letting them know why, and thanking them for quoting your business. If you need to apply for a quote next year, this can protect your reputation with the underwriter at that carrier - they won't feel like they're being used for quotes. In fact, the submission close-out is so important, it may deserve its own article... more on that later.
In summary, the year is 2024. You have a website, and underwriters will find it. It's time to be cautious of the image you are presenting to the world - one innocent sentence or photo could cost you tens of thousands of dollars.
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