In business, people often say time is money. This becomes even more true as you climb the corporate ladder. It’s especially true for startups and new companies. In these roles, knowing when to ask for help is key. For example, if legal issues come up, you’ll need to call a legal expert. The same idea applies when your business insurance is up for renewal. But what can an “insurance expert” actually do for you?
When to Call in an Insurance Expert for Your Business
Traditionally, the determination of your insurance premium auditing was entirely done by your insurance company. It usually occurred annually, though it could be as well as 90 days after your policy expiration date. The overall objective of this audit was to find out how much a business’s insurance should’ve cost relative to how much they paid, and to rectify the difference. If your insurance estimate is less than the reality, you’ll need to pay an additional premium to address the discrepancy. If the reality is less than the estimate, you’ll be receiving a refund in the form of a policy credit or simply a check.
These discrepancies account for a significant portion of the commercial insurance market. It is estimated that the worker’s comp annualized premium ranges anywhere from $55 to $60 billion. Based on volume, 25-50% of businesses may have been overcharged during an audit and anywhere from 10-20% of premiums are lost to premium leakage. This can make as much as $12 billion is lost simply due to incorrect risk adjustments. So what kind of factors go into making an insurance premium estimate?
How Insurance Audits Work—and Why They Can Cost You
Firstly, the insurance’s estimate is based on the business’s financials. To measure your business’s liabilities, a couple different sources are considered. A business needs to provide a journal and summary of its payroll, which include individual earning records. Similarly, you need to provide cash disbursements to subcontractors, with more monthly totals. For infrequent or one-time expenses, you need to present cash receipts for things like service and repair, and a monthly total of these cash disbursements. Lastly, to prove a business’s revenue, you need to present state and federal tax records showing gross sales and corporate returns.
With so many documents, it’s easy to see how mistakes can be made. However, with the rise of AI, combing through all this data to identify mistakes is a bit easier. AI can predict trends and impacts and detect any abnormalities in the policy. By relying on a machine and not a person, you boost the data reliability and reduce the likelihood of inaccuracies or large bills during your audit. In order to better utilize AI in the insurance industry, companies like AdvoQates have emerged.
How AI and Experts Like AdvoQates Are Changing the Game
So how exactly do these companies save you money? They combine an expert team of policy auditors with modern AI technology to review your policy and communicate with your insurance company. Firstly, they establish themselves as the first resort with your insurance company’s auditor. By directing all communications their way, it ensures clearer responses, speeds up the response rate, and takes the burden off of you. After this, they help you to gather all the documents needed for the audit.
However, before submitting them to the company, they instead conduct an analysis themselves. With experienced auditors and modern AI technology, they identify any deductions or exemptions that your business is eligible for, as well as the proper insurance classifications for your business. After this step, they submit both the original records and their analysis to the auditor. By adding the analysis, they preemptively answer any questions the auditor may have. Finally, they communicate with the insurance company auditor to make sure his analysis matches their report, so that you’re getting the best rate possible.
Regardless of whether you’re a mom-and-pop shop or a multinational conglomerate, getting your business insurance should be easy. You want to make sure it’s handled with precision and care but still ensures fairness and best price possible. Whether your industry is healthcare, retail, or even sports team management, the best way to make sure your policy audit is seamless is with companies like AdvoQates.
