Small Business Guide To Commercial Insurance

21 The basic rating equation most often utilizes other modification factors, which can include experience modifications, schedule rating, or judg- ment rating. Because rating formulas can range from simple to com- plex, depending on the line of insurance, it is important to discuss how your policy is rated and how the policy premium is calculated with your broker-agent. What Do I Need to Know About Commercial Claims? Depending on the type of loss your business experiences, the duties and responsibilities required by you in a claim can be numerous. It is important to remember that your broker-agent can assist you throughout the claims process. In many cases your broker-agent will be your first point of contact when filing an insurance claim. Whether you contact your broker-agent or the insurance company directly when filing a claim, you are required under the insurance contract to report all claims in a timely manner. This allows the insurance company to process the claim and conduct their investigation as quickly as possible. Since commercial claims tend to be more complex, it is important for the company to assess the claim quickly in order to mitigate any situation that may have the potential for increased loss. This is especially crucial in liability claims, as there can be high dollar amounts at stake. When claims are not controlled early in the claims process, litigation from third parties can arise. Litigation can be expensive and often ends in a judgment much higher than if an experienced claim representative had handled the claim from the beginning. This is why it is necessary to turn all claims over to your broker-agent or insurance company as soon as you are made aware of the claim. Trying to handle the claim yourself violates your duties under the insurance contract and can be costly to you in the long run. Most business owners are aware that claims loss experience is reflected in the rating formula and directly affects premium costs. By following the duties outlined in your contract regarding claims, you are a partner with your insurance company in helping to keep claims costs to a mini- mum, which in turn helps keep your premium costs down.