Presenting a Risk to an Underwriter

A quick guide to help Brokers get cover for their clients

Here at Berkley Insurance Australia, information is everything. That’s why we trust you, our Brokers, to give us as much information as possible when presenting us with any new risks or renewals.

However, self-explanatory as the process of submitting a risk may seem, our Underwriters regularly return proposal forms back to our brokers because they lack necessary details or contain inaccurate information. The broker must then go back to their client to ask for further information or clarify certain details.

To help avoid frustration, here are some helpful tips to make the process of submitting a risk as simple as possible for both you and your client.

Proposal Form

Our proposal forms have been worded in such a way that many of the questions only require yes or no answers. If you need to provide further information, such as a detailed description of your client’s duties, then you may complete an addendum and attach this to the slip or proposal form.

When renewing risks, please submit a new renewal declaration containing all the current information. We cannot accept renewal declarations that state “As per last year’s proposal form” or “Refer to last year’s slip”. Please make sure that a renewal form or, if requested, a full proposal form, is filled in at each renewal even if there have been no significant changes to your client’s business during the past year.

Who is the Insured?

This may seem like an obvious question, but the answer is not always so simple. In many cases the insured consists of just one legal entity. However, insureds can also be a group of multiple entities.

If there are numerous entities requiring cover, then the names of each will need to be clearly listed on the slip or proposal form.

Most occupations require a degree of explanation. Even standard occupations like plumbing require details of their work areas (domestic, new buildings, high-rise buildings, power stations, or mine sites). By providing those work areas you help us to decrease the time it takes to respond to a new proposal or renewal and in turn, save yourself and the client time in the process.  

Similarly, many professions need specific explanations. A Management Consultant can be anything from low-risk “change management for internal procedures” to “Corporate Advisor”. A Project Manager is one of the widest descriptions of a profession and could be anything from project managing a building site to project managing an IT implementation. We recommend you supply a full list of the activities being undertaken.

To help avoid disappointment for your client when they submit a claim, it’s best to have the completed information about their business right from the start.  

If your client is using a trust structure, it is important to keep in mind that the trust itself is not a legal entity and is not capable of entering into contracts. A trust will either have an individual or corporate trustee that must be named as the insured on the policy.

The correct way of specifying an insured name with a corporate trustee would be as follows:

Pty Ltd Company Name As Trustee For The XXX Trust Trading As XXXX e.g. ABC Engineering Pty Ltd As Trustee For ABC Engineering Trust T/As ABC Engineering. 

Find out more about Legal Entity Names.

Experience – What do they do?

Whenever we are presented with a new risk, we like to receive background information about the proposed insured, with a history of their most recent roles, prior to launching their business. A client’s work history can give us the opportunity to assess the exposure presented by the risk.

While we certainly do provide cover for start-ups and proposed insureds that are new to their industries, being less experienced may attract a higher level of risk.   

It’s no secret that many industries have more inherent risks than others. If the nature of your client’s work makes them more vulnerable to litigation, then usually a higher premium will apply to account for the greater level of risk.

Turnover / Fee Income

Including the turnover and/or fee income information is very important when presenting a risk to our Underwriting Team. Many of our policies are rated on this information, so it’s always necessary to provide both the estimated and actual turnover of your client’s business.

It’s essential for us to know whether your client has been undergoing a growth period, with rising profits, or whether their business is experiencing a decline in financial activity. Both an increase and a decrease in the profitability of a business can be a tell-tale sign of increased exposure. Therefore, we always need to know how your client’s business has been performing when assessing their risk.

Previous Claims

If your client has a history of claiming under any other policies, we naturally need to know the particulars of each claim. Please provide summaries of what each claim was about including the settlement amounts, breakdowns of all claim expenses including legal fees, as well as the full details of any judgments.

Hopefully, your client has taken steps to minimise the likelihood of any similar risks impacting their business in such a way again. If an Insured can demonstrate that they’ve taken measures to prevent any further claims from being triggered, then this may lower their level of risk. Claim mitigation steps can help to reduce claims loading that may otherwise be applied, so we encourage you to provide us with this information.

Get faster cover for your clients by giving us the correct information

It’s not that we mean to be excessively pedantic or labour the point, but by getting the information right the first time around, we can respond to the new proposal or renewal and make a decision about whether to provide cover to your client sooner. You also enjoy a better relationship with your clients, as you don’t have to repeatedly follow them up for information. Furthermore, there is less likely to be any dramas, should they ever need to lodge a claim.  

At Berkley Insurance Australia, our Underwriters are always happy to take calls from brokers whenever they have any questions about our policies or getting cover for a client. Want more information about presenting a risk? Just give us a call today.

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