Business Insurance Inspection
When you have a Business Insurance policy it's not uncommon to have the insurance company conduct an inspection. It's actually written into the policy conditions that they have the right to conduct an inspection, and if the insured (business) does not comply, they (insurance company) can cancel the policy. These inspections are important in determining the insurability of the property and operations. I get asked about Business Insurance Inspections sometimes, so I thought it would make sense to write about it. The main question I get is, why are they doing an inspection?
It might seem annoying, or unnecessary, but it can be a good procedure to verify what you told the agent or broker is what was told to the insurance company. Think of it as the verification process for your insurance. This way everyone is on the same page from a risk perspective.
In addition to verifying information, they will also look for any safety concerns that your business might have. From a risk management perspective, it's another set of eyes looking at safety issues. However, the policy language clearly states that the carrier cannot be held liable for safety statements. Meaning, if they miss something, you cannot go back and sue them. This disclaimer has been included in the policy to protect the insurance company against such suits.
Also note that some insurance companies outsource inspections, especially if the insurance company does not have an office in that city. The inspector might not even come out and do a physical inspection. They might just do an interview over the phone to verify information on the application and ask some other questions. I've had some clients request that I come out when the inspector is there, especially if the inspector doesn't work directly with the insurance company and is an outsourced contractor doing the inspection. If this would make you feel more comfortable, be sure to request it of your agent.
The insurance company may inform you of recommendations or requirements that should be made, but please note, they are not required. If they do have such requirements, they must be completed within a certain time frame otherwise they might cancel the policy. If you have any questions about the inspection process or anything else related to Business Insurance please feel free to contact me.
Commercial Insurance Agent