Insurance is a major expense for most businesses, especially small businesses, and all of my clients want this expense reduced as much as possible. Here is what we do for our clients in order to reduce their insurance obligation.
In ISNetworld they have an insurance "pre-questionnaire." The number of questions in this pre-questionnaire can range from 3-12 depending on the client in your ISNetworld account.
It is vitally important that you answer these questions correctly because your insurance requirements are directly based on your answers.
One question that always tricks our clients that don't have any employees is, "Are you a sole proprietor?" If you mistake this question to mean "Are you a sole-proprietorship?" which is a business classification and your company is an LLC and you answer "No" you will be required to have Workman's Compensation insurance. But an owner of a company, that has no employees, is not required to carry workman's compensation insurance. So even if your business is an LLC, you can be a sole proprietor, meaning single owner with no employees.
Answering this question correctly will eliminate the Workman's Compensation requirement in ISNetworld.
Another way to reduce your insurance requirements in ISNetworld is to use the Variance tool. An insurance variance in ISNetworld is simply a request for lower insurance coverage.
Once you complete the insurance pre-questionnaire in ISNetworld, you will see your insurance requirements. At this point you are expected to upload an insurance certificate that meets these requirements (you can get your insurance certificate from your insurance agent.)
Unfortunately a lot of companies in ISNetworld require more insurance coverage than most of our clients originally purchase. For example, your insurance requirements in ISNetworld for General Liability may be $4,000,000 and you currently only have $1,000,000 in coverage.
You have two options at this point. You can call you insurance agent and purchase more insurance or you can upload a certificate of insurance, without purchasing any additional insurance, and let the certificate get rejected by the ISNetworld's review staff. Once your insurance certificate is rejected, you can file for a Variance.
ISNetworld will list all of the reasons your insurance certificate was rejected. If you look to the right of the reasons you will see a little checkbox. This is your Variance checkbox. Click this box next to each and every item that was rejected and scroll to the bottom of the page and you will see a "Submit Variance" button. Click this button. You will need to input your contact information and a brief explanation on why you would like lower insurance requirements.
Here is a list of reasons that you may want to use for your Variance request.
1. You run a small company that simply can't afford the additional insurance coverage.
2. Your company performs non-lethal work or you work in a very safe industry.
3. You perform limited work for this client that simply can't justify the additional insurance cost.
4. Your company has a long history of zero insurance claims.
You can type anything you like in this Variance request. We have had a lot of success with simply being honest about the situation. If you simply feel the insurance requirements are too high, state that.
Submitting an insurance Variance is free and it can take weeks before your client in ISNetworld makes a decision on your request. ISNetworld does not make the final decision on variance requests and we have had requests that remained in "Pending" status for months. So keep this in mind if you have a big project coming up and you need to be in compliance in ISNetworld to work for them.
To increase your chances of your insurance Variance being accepted, we recommend that you speak with your contact of your client and let them know about your insurance variance request and ask if they will email the person in charge of making these decisions on your behalf. We have had a very good success rate when this was done.
So make sure you use the insurance variance tool in ISNetworld. We have had clients save over $5,000 per year in insurance because we took the time to file a Variance for them.
If you need help filing a Variance, call ISNetworld's help line. We call them all of the time and they have excellent support staff that will eagerly help you. Here is ISNetworld's phone number 1-800-976-1303.
Take care and I hope this information can save your company money.