The confidence that comes from knowing you have the right insurance in place for your business can be, well, downright transformational. It can give you the space to make money moves (as the kids say), by taking on smart risks that can grow your business.

Conversely, finding out you have the wrong insurance coverage can be an unpleasant surprise, to put it mildly. Often, when organizations receive notice from their carrier that a claim won’t be paid or that they have to pay a deductible that’s through the roof is when they find out they have the wrong insurance. But this doesn’t have to be your experience. 

In this article, I’ve listed five insurance tips. As you read through them, think about your existing coverage, and consider how it could be better. The point is: Make your insurance work for you.

1. Make sure you’re covered. (Just thinking you are isn’t enough.) 

I hate to be the bearer of bad news, I really do. But just because you have insurance doesn’t mean you have the right coverage. 

Has your business grown since you last evaluated your insurance? Changes in your business can affect coverage needs. If your company has grown and is still with a small business underwriter, your premiums and coverage may be completely wrong for your organization. Make annual insurance reviews a part of your business procedures, so you can update your coverage as your business evolves. 


Do you know what isn’t covered in your policies? Hidden risk factors can lurk behind the coverage terms and limits of your policies. Carriers can write inclusionary policies, which only cover what is explicitly stated, and everything that’s not stated is not covered. You may not realize what coverage you need (and don’t have) until you file a claim. For example, a flood is not necessarily covered on property insurance. Is it in yours?


If you have an umbrella policy, does it cover what it should? Be careful with umbrella insurance policies: They must specifically be in excess of each liability policy. Also, if you have a deductible on your umbrella policy, make sure you know what it is. Auditors conduct their audits in various ways depending on the size of the risk, the history they have with the particular client, as well as results from prior audits. The main three types of audits are mail audits, phone audits, and field audits. There are other types such as interim audits, and preliminary audits, but these are less common. Audits are typically conducted within 60 days of policy expiration for the previous term of the insurance. The insurers retain the right to audit such policies up to three years after expiration, but this is not as common as the 60-day audit time period.

When it comes to insurance, rarely are two policies the same. Also, keep in mind that most policies are not all-inclusive. So don’t just check the box and get any policy. Talk with your insurance broker and select a policy that’s tailored to the specific needs of your industry and business. 

Additionally, legal jargon can be confusing. Insurance policies are full of legal descriptions that can limit the coverage you think you have. Fifty-six percent of business owners believe they have the coverage they don’t actually have. It’s essential to have policies reviewed by a professional to make sure you get what you think you're paying for.

3. Explore your options as market conditions change.

About change: Embrace it. If you’ve had the same broker or policy for more than a few years, schedule a policy review to make sure everything is up to date with today’s market. When markets soften, you can get more coverage for your money and lower deductibles if your policies are properly negotiated. 

Change can feel like a lot of work, but errors—like duplicate and missing coverage—are identified in more than 65 percent of policy reviews. Reworking your program can uncover errors, pricing inflation, and deductible hikes. The bottom line is that renegotiating existing contracts can save you money. 

4. Use all the resources your broker provides. 

Commercial insurance is complex. Having a broker by your side means more than connecting you with the right coverage. Larger brokers usually have the same fee structure as smaller brokers but can provide access to more resources. Many of these resources are free and can cut long-term costs. 

For example, in-house claims advocacy can save you 8 to 12 percent on a claim, and brokerage service teams with expertise specific to your industry can be extraordinarily helpful. Other free services can include property management, certificate management, fleet management, and loss control. 

Insurance is a key business tool that protects your operation from multiple threats. If you’re only talking with your broker at renewal time, you could be missing out. Be sure to ask yourself these two key questions: 

Do I have regular check-ins with my broker? 
Semiannual, quarterly, and monthly check-ins can help you stay in front of new risks as your company and the marketplace change. Only seeing your broker at renewal time can indicate that the renewal may not have been aggressively marketed and negotiated. 

Does my underwriter know my business? 
When an underwriter knows you and your business, they won’t underwrite you like an average company. Rather, they’ll focus on your actual risks, operations, and on you as a person, which can translate into better coverage with more value. If you haven’t met, or at least had a phone conversation, with your underwriter, you may be leaving premium dollars on the table. 

When companies and their brokers get too comfortable with the status quo, they can end up with premiums that are too high and policies with coverage gaps. If it’s been a while since you last evaluated your insurance program, the right time may be now. 

An airtight insurance program can mean more money in your pocket and the foundation to make smart moves that transform the future of your company. Ready to take the next step? Let’s talk. 

In this blog, I’ve listed five neatly categorized insurance tips. As you read through them, think about your existing coverage, and consider how it could be better. The point is: Make your insurance work for you.

Five Tips to Ensure Your Coverage Works for Your Business 

A workers’ compensation audit can be inconvenient, costly, and generally unpleasant. Since most states mandate this type of audit, avoiding it altogether is not an option. However, the right combination of planning and consultation can help you avoid a large and unexpected bill and move you further down the road to long-term profitability.

Workers’ compensation audits occur for a simple reason–for the insurer to confirm that premiums paid for workers’ compensation insurance are accurate. Auditors generally evaluate the accuracy of the risk, classification code, experience modifier, and payroll amount. In the case of a discrepancy, the auditor will demand an adjustment, typically making the premiums due in a very short window of time following the audit.

This may look like you stand at a disadvantage. However, there are a wide range of strategies and tactics you can take to put yourself in a winning position. And just like in any competition, it all begins with preparation.

Auditors conduct their audits in various ways depending on the size of the risk, the history they have with the particular client, as well as results from prior audits. The main three types of audits are mail audits, phone audits, and field audits. There are other types such as interim audits, and preliminary audits, but these are less common. Audits are typically conducted within 60 days of policy expiration for the previous term of the insurance. The insurers retain the right to audit such policies up to three years after expiration, but this is not as common as the 60-day audit time period.

When contacted by an auditor, it is imperative to respond promptly. A simple mail-in or phone audit can be very straightforward and show good faith in the eyes of the carrier if it is completed in a professional and timely manner. With a field audit, you have more time to prepare for the in-person visit. The best tip for a smooth audit is to be prepared with exactly what the auditor will want when they arrive. During the scheduling process, be sure to ask the question: “What exactly should I have prepared to help ensure a smooth and timely audit?” The carrier will gladly provide this information, as they want it to be as smooth and painless on their end and it will save you time on yours.

I have heard stories of auditors spending a full day in a client’s office. This tells me one thing: the client didn’t have the information the auditor needed, so they had to dig for it while on site. This shows a lack of organization and can work against the perception of the insured in the eyes of the auditor, which represents the carrier.

In order to avoid the pain of a large bill come audit time, it is important to stay on top of changes in payroll or employee classification throughout the year. Also, it is important to have a broker that knows how you are operating your company and how circumstances can change throughout the year. A major change in payroll, class codes, or even a project that is not known or disclosed at the beginning of the policy period can make for an unpleasant experience at your annual audit.

Here is the problem: While it’s impossible to see the future, an inaccurate projection of payroll could end up costing you dearly. For example, let’s say you project $5 million in payroll, but end up landing a big contract midyear. Fulfilling this contract requires you to bring your payroll up to $7 million. Great news, right? You’ve had a successful year, and your workers’ compensation insurance carrier can simply send you a bill for the difference.

On the $5 million in exposure, you will be placed at a higher rate than the $7 million. Why? Because the rating and exposure relationship exists on a sliding scale. When this happens, you’ll pay for the extra $2 million in exposure, but at a higher rate. An inaccurate projection can also burn you on the way down. For example, if you project $5 million in payroll, but only have $3 million, you won’t get the money back that you paid for that exposure in the majority of cases. We call this auditing up or auditing down. You will typically be audited up; being audited down and getting a refund is less common.

Another problem insureds face is the classification of payroll amounts. For example, if there is a clerical employee who is in the office 90 percent of the time but occasionally works in the warehouse moving items or sorting, the auditor may re-classify this individual at a higher rate due to the exposure in the warehouse. There are two ways to tackle this dilemma. (1) You could limit this employee to one job function, which is inefficient, or (2) You could have your broker step in and negotiate with the carrier. There are no guarantees that this negotiation will lead to a favorable outcome, but it's a necessary step.

The same goes for drivers who load or managers of a field operation. A review will occasionally find that classifications have been wrong for years, with the insured being over-charged for an extended amount of time.  The cost difference per-class code can be significant.

While it may be impossible to change your payroll or staff responsibilities ahead of time, a costly issue like this can be avoided with a relatively simple solution: an experienced insurance partner.

This individual will update payrolls and sales volume each quarter and analyze any potential issues with classifications; steps can mean the difference between having a profitable year or not based on the razor-thin margins we are currently seeing in the energy space. An expert opinion can also help to create efficiencies within your company, vendor base, and operations. When analyzing where to make cuts and how to streamline or enhance, a detailed conversation with your insurance broker may provide a formidable competitive advantage once we start seeing higher oil prices and the demand for work is higher. Managing the top line will become the most important at that point, but watching the bottom line won’t hurt!

The ideal scenario from the insured’s perspective is to be on a “proactive service calendar” with their broker. In my book Buying Insurance, I explain this concept in great detail, but here is the general idea. First, make sure you have a broker who understands your operations and your plan for the next 12+ months. This synergy will allow the broker to determine the best possible outcome regarding your frequency of contact. While companies that are growing fast may require monthly checkpoints as they bring on new locations, equipment, employees, etc., the majority will require quarterly checkpoints. A conference call is typically sufficient for this to work, but in-person meetings never hurt, granted the insured has the time for this.

Question: Do you see your broker once a year at renewal, then get a bill from them? If the answer is yes, then it’s time to move on. Insurance is now a much more strategic instrument—one that can play a significant role in strengthening your bottom line. But if left unattended, insurance can also be a silent killer. Consider this example:

Many companies in Houston and Florida did not have flood insurance. Why? In many cases, it was simply due to complacency. Their longtime broker was not thinking strategically and only showed up at renewal. This lack of preparedness came full circle following hurricanes Harvey and Irma, showing that a small annual investment could have circumvented catastrophic costs. The same is true with workers’ compensation audits. Working with your broker as a strategic partner can assist you in the audit process and provide significant savings. However, if your broker is not on top of things, you could be paying a sky-high rate that is both unexpected and completely avoidable.

In the workers’ compensation audit process, success hinges upon your ability to operate with foresight, accuracy, and precision. The way to win at the audit is to project just under or just over your projected payroll/sales depending on your risk tolerance. This requires a combination of deep expertise and finely-tuned analysis, something a broker with industry expertise can bring to the table.

How to Win a Workers' Compensation Audit 

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Five Tips to Ensure Your Coverage Works for Your Business

How to Win a Workers' Compensation Audit

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Articles from Billy Bray

.css-13o7eu2{display:block;}Five Tips to Ensure Your Coverage Works for Your Business

How to Win a Workers' Compensation Audit

Newfront for Businesses

Newfront for Employee Benefits

Newfront for Private Clients

Blog ‍

Connect ‍
with ‍
us. ‍

Five Tips to Ensure Your Coverage Works for Your Business