“Just Do It”: Commercial Field Underwriting

via GPHY

Whether it’s filing taxes or unloading the dishwasher, there are some things in life that are necessary but a bit tedious. And sometimes, we need to be reminded to JUST DO IT.

Shia Labeouf is here to remind you to just do your field underwriting! Although it can be labor intense and may feel tedious, it is a critical part of being a quality insurance agent. (If you want to write commercial without having to field underwrite, skip this and watch our video about the Warm Lead program. But if you want to have maximum options with commercial insurance, read on!)

Field underwriting involves:

        (1) Gathering comprehensive rating information on a client, and

        (2) Fully and accurately communicating that information to the carrier.

It could also be called front-line underwriting or in-person underwriting.

No one at an insurance company should, could, or can know as much about a prospect as the agent or producer. The information field underwriters provide to carriers will determine whether or not an account is acceptable. In other words, these agents are filters for what does and does not qualify as eligible business, so it’s essential that the field underwriters communicate clearly and accurately.

There are more things to document and watch for when underwriting a prospect than we can list here. But the following points are crucial items to keep in mind when completing the task.

Field underwriting requires:

Photos of all sides of buildings

This can be accomplished with fewer shots by taking the photos at angles that show more sides of the building at one time. The client can email these pictures to the agent, and they must be received prior to binding coverage.

Interior photos

The importance of photos depends on the type of business and how much property is called for.  

If a building is over 25 years old, it is always good field underwriting practice to get pictures of the electrical panel, hot water heater, and furnace so you can know their condition.  

A contractor often does not need property coverage but will accept a nominal amount of it for those carriers who require property in order to offer a BOP/Package policy.  For example, a $5,000 contents limit in this instance would not warrant pictures. (Underwriting information, such as the type of construction and year of updates on roof, electricity, plumbing, and heating, would still be needed.)

A restaurant requires extensive pictures, particularly of the kitchen area. This includes the deep fat fryer (to show at least 19″ from an open flame), fire extinguisher locations, and pictures of the inspection tags for grease filters and hood cleaning.  

Checking guidelines

Once you’ve seen a property, you must ask yourself if it meets underwriting guidelines of the carrier you plan to write the policy with. If it doesn’t, do not issue the policy. Put it with a carrier that it does fit. Call us if you need help with risk placement.

Description of business activities

You must accurately describe the business activities of the prospect so that they are assigned the proper class code. Competing agents sometimes use class codes that are incorrect in order to get a lower premium. We don’t do this at Firefly. 

Correct payroll and gross sales information

These are two additional pieces of information that clients often under-report in order to generate a lower premium. Be careful of shrewd prospects who understand how insurance is rated—they may declare payroll and gross sales that are much lower than the true amount!

Information stored in a management system

You must save the underwriting information in the management system so it can be easily retrieved in the event of a large loss. You will want to show the carrier that the risk was a good one when the policy was written; it helps a great deal in relationship management.

If a large claim happens to you, your future self will thank you for well-guarded details!

It’s also vital to keep an application in the insured’s file, because the building information is captured there and is signed by both the agent and the insured. These are material representations, and if they are proven to be incorrect under duress, then the agent, the client, or both will be held accountable.

In short, good field underwriting protects your customer AND you at the time of a claim. When you JUST DO IT right, every time, you can have confidence and peace of mind about your commercial book of business.