Suscripción y tarificación

The written plan for how your business keeps operating through a disruption — and the document your insurer and largest clients increasingly ask to see.

A business continuity plan documents how an organization will maintain or quickly resume critical operations after a disruption: what the critical functions are, who does what, where people work, how systems are recovered, and how customers and staff are told.

Por qué importa: Insurance replaces money; a continuity plan replaces time. Property and business interruption coverage pay for the rebuild and the lost income, but neither shortens the outage. The plan is what determines whether you are closed for three weeks or three months — and business interruption limits are set against that duration.

The classification number that describes what your business does — and the single biggest driver of your premium.

A class code is a numerical classification assigned to a business or to specific payroll, describing its operations for rating purposes. Workers’ compensation uses NCCI or state bureau codes; general liability uses ISO codes.

Por qué importa: The class code sets the rate. A clerical workers’ comp code might rate under $0.40 per $100 of payroll while a roofing code rates above $15 — a nearly fortyfold difference on identical payroll. Getting the code right is worth more than shopping the market.

A multiplier on your workers’ comp premium based on your claim history versus peers. Below 1.0 is a discount; above is a surcharge.

The experience modification factor is a numerical multiplier applied to manual workers’ compensation premium, calculated from three years of the employer’s claim experience compared with the expected experience for its class codes and payroll. A mod of 1.00 is average.

Por qué importa: The mod compounds. A 1.25 mod on $60,000 of manual premium is a $15,000 annual surcharge, every year it stays there, and it also disqualifies you from many general contractor prequalification programs that require a mod at or below 1.0.

A condition that makes a loss more likely or more severe. It is what underwriters actually price.

A hazard is a condition or practice that increases the likelihood or potential severity of a loss — as distinguished from a peril, which is the cause of loss itself.

Por qué importa: Underwriters price hazards, not perils. Fire is a peril everyone faces; a fryer without automatic suppression, stored solvents, or a 25-year-old electrical panel are hazards that make fire more likely at your address specifically.

Your claims history report from a carrier. Every underwriter asks for it, and the details on it set your price.

A loss run is a report issued by an insurer listing claims made under a policy over a period — usually three to five years — with dates, descriptions, amounts paid, reserves and status.

Por qué importa: Loss runs are the primary underwriting document after the application. An account with clean loss runs gets standard market terms; the same account with two open claims and no explanation gets surplus lines pricing.

The portion of premium the carrier keeps no matter when you cancel. Read it before you plan to switch.

Minimum earned premium is the amount an insurer retains regardless of policy duration, expressed as a percentage of premium or a flat dollar figure, applied when a policy is cancelled before expiration.

Por qué importa: This is the clause that makes mid-term switching cost money. A 25% minimum earned premium on a $6,000 policy means the carrier keeps $1,500 even if you cancel in month two — so the cheaper quote you found may not be cheaper after the retained premium.

Comp premium calculated from each actual payroll run instead of an annual estimate — smoother cash flow and a smaller audit.

Pay-as-you-go workers’ compensation calculates and collects premium with each payroll cycle based on actual wages paid, rather than charging an estimated annual premium in instalments with a reconciliation at audit.

Por qué importa: It solves the two worst features of traditional comp billing: a large deposit up front, and an audit bill months later for growth you already funded from operations. Premium tracks payroll in both directions, so a seasonal drop reduces cost immediately.

What you pay for the policy — and a number built from class code, revenue, payroll, limits and loss history.

Premium is the amount charged for an insurance policy for a stated term, calculated from exposure basis (revenue, payroll, units), classification, limits, deductible, and loss history.

Por qué importa: Premium is not a quote you accept or reject — it is an output of inputs you partly control. Class code and exposure basis do most of the work; limits, deductible and documented risk controls adjust from there.

The post-policy reconciliation of estimated payroll or revenue against actual. It is where uninsured subcontractors become your bill.

A premium audit is a carrier review conducted after the policy period on auditable policies — most workers’ compensation and much general liability — comparing the estimated exposure basis used to set premium against actual payroll, revenue or receipts, and issuing an additional premium or a return.

Por qué importa: Audits are routine, not adversarial, but they produce two predictable surprises. The first is growth: revenue or payroll well above the estimate generates a large additional premium bill in one lump.

How an insurer decides whether to cover you and at what price. Knowing what it looks at is how you get a better quote.

Underwriting is the process by which an insurer evaluates a risk, decides whether to accept it, and sets the terms, conditions and premium — using class of business, revenue, payroll, claims history, and operational specifics.

Por qué importa: Underwriting is not a black box, and treating it like one costs money. Class code, revenue, payroll, prior claims and specific operational answers drive the price. Most premium surprises come from an answer given loosely on an application.

A filed election that removes an owner or officer from comp coverage. Cheaper, and it means you are not covered.

A workers’ compensation exemption is a state-recognized election, usually filed with the state or the carrier, that removes an owner, officer, member or partner from coverage under the policy and from the covered payroll used to calculate premium.

Por qué importa: Exemptions save premium because owner payroll is removed from the rating basis. They also mean no benefits: an exempt owner injured at work has no comp coverage, and health plans exclude work-related injury, so there is no coverage from any source.