Builders Insurance Costs: 4 Easy Steps that Could Improve Your Rate

By: Brian Robertson, CIC, CRIS

Brian Robertson specializes in advising commercial and residential developers, home builders, remodeling contractors, trade contractors, and landscaping contractors.

Builders insurance costs (premiums) are dependent on a variety of factors. And when it comes to one key rating factor, the fate of your rate is largely in your own hands. It’s called your online presence (i.e. your website, social media accounts, and client reviews). More than ever, optimizing this factor could play a role in curbing insurance costs and avoiding a significant premium hike at renewal. Here’s why:

According to the Insurance Journal, a recent boom in construction has allowed underwriters to refine their appetites, and take a more selective approach—focusing only on the most profitable accounts. “Insurance carriers are paying more attention to underwriting, and handpicking the accounts they want to do business with,” confirms one construction risk management expert.  In other words, carriers are ranking companies like yours with a much more discerning eye.

So how can you put your best foot forward under this new, heightened scrutiny? What should you be doing to ensure your company is at its most marketable? Which steps can potentially lower your builders insurance cost? Here are four relatively easy ones:

  1. 1. Create an Online Presence

If you don’t already have a company website, you’re not just missing out on business opportunities. You may be costing yourself more in insurance premium. Like it or not, underwriters are suspicious of any company that can’t be found online. If you don’t have the budget for a standalone website, at least consider claiming your Facebook page and/or LinkedIn company page, which are free to maintain and relatively easy to spruce up with important business details.

According to our underwriting partners, a good online presence should include:

A clear list of regular services offered

Offering too broad a “Services” menu may disqualify you from a favorable insurance program.  Underwriters like to know that you focus on a relatively narrow scope of services. If trades like roofing, framing, and insulation–to name a few–are subcontracted out, they should be left off the Services section of your website.

Background about the business

Be sure to include how many years your company has been in operation; underwriters may have the ability to issue credits for companies that have been around for many years

Background about the owners (and key employees)

Underwriters want to know owners have experience in their trade.  So don’t be shy about publishing your professional biography. Trade school credentials, certifications, association memberships, continued training: these are vital stats that can help set an underwriter’s mind at ease. If they see you are qualified to do the work properly, they will be more confident in your ability to avoid claims.

Photo galleries showing completed projects

Photos of completed projects offer another testament to your work. Sometimes underwriters enjoy looking at the quality of craftsmanship.  If they see high standards and attention to detail on display, they might be more willing to write your insurance.

Photos of your office location

Make sure the building’s exterior, the office, and any shop space are clean. All required and recommended safety precautions should be on display (e.g. guards on table saws, electrical panels that are clean and closed, central dust collection in place, etc.).

  1. 2. Replace Stock Photography with Real-Life Images

Stock images (generic, royalty-free photographs) are not vetted for any form of industry compliance. The images are often staged by photographers (sometimes from other countries) without any knowledge of OSHA guidelines for safety equipment, fall protection, etc. By selecting a generic, noncompliant image to represent your company, you are tacitly endorsing whatever violation is on display (the lack of proper PPE, for example). Carriers who visit your website to corroborate your application—and increasingly, they do visit—may be inclined to judge your safety program on the basis of these photos.

By the way, stock images are also bad for lead generation. Most prospective customers can tell that the photo on display is not actually you or your workers on the job. As a result, webpages that use stock images have significantly lower conversion rates than those featuring real-life people in action.

  1. 3. Review Your Service Descriptions with Your Agent

When it comes to insuring your company, today’s underwriters look at every bit of publicly available information. What they find can sway a carrier’s willingness to work with you—and at what cost. So, it’s important to be completely honest with your agent when outlining your operations and exposures—including all types of jobs and service areas.

One major example: don’t omit “Snow & Ice Management” from your online Services menu, and then post a photo of your new plow on Instagram. In minor cases, you may not be aware of potential inconsistencies. Ask your agent to conduct a thorough audit of your website, photo galleries, Houzz profile, etc. This is the best way to ensure your insurance application and outward appearance are fully aligned.

  1. 4. Monitor and Address All Online Customer Reviews

Even though customer reviews aren’t always fair or accurate, underwriters consider them when evaluating your business risk. Consistently positive reviews are a decent indicator of the kinds of employees you hire and the standards you set for them; they make underwriters more confident. Conversely, negative comments about substandard workmanship or careless practices will send up red flags. You might not be able to control what people say about your business on Google, Facebook, Yelp, etc., but you can certainly take the time to monitor all feedback and reply with your side of the story, as needed.

If keeping up your online appearance sounds like a lot of work, don’t worry. Our Massachusetts business insurance agents will help you get it done. At C&S, our commercial department is always willing to advise on online presence issues—along with a host of other rating factors that can influence builders insurance costs. Give me a call (Brian Robertson, CIC, CRIS) if you want to discuss yours: 508. 339. 2952.

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