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The insurance industry in the UK is the third largest in the world and is the driving force behind British business. It manages investments amounting to 26% of the UK’s net worth, contributes £10.4 billion in taxes to the UK government and creates 290,000 jobs annually. It is undoubted that in 21st century society, insurance providers are crucial in determining our economic outlook.

In line with this, insurance and insurance underwriting is crucial to the success of your business as it minimises your level of risk and ensures that all of your business products are insured. Here’s an introductory guide to how the insurance industry and their insurance underwriters can help make your business a success and minimise risks no matter where your business is located.

Businesses contain a number of ‘risks’ and each of these pose a threat to the insurance provider. For this reason, insurers employ trained underwriters to analyse and minimise these risks, thus ensuring that they are fully aware of the level of risk involved in insuring your business and so that you are covered for any damages caused. For this reason, we can consider underwriting to be the process of minimising the risk for both the underwriter and the underwritten (you).

Due to this, insurance underwriters decide:

  • How much coverage a client should receive
  • How much they should pay for this coverage and
  • Whether to take the risk and insure them

Determining risk exposure is an essential part of the underwriting process as this is the main factor in determining the premium charged for the insurance. The function of the insurance underwriter is twofold: to protect the books of the business and to issue insurance policies and premiums that accurately reflect the level of risk involved.

The risk evaluation process is dependent on the type of coverage that the underwritten requires. For example, if your business has a fleet of vehicles then driving records and past personal insurance details will be crucial in understanding risk. Likewise, if you required health insurance, any pre-existing conditions would have to be noted. Underwritten insurance isn’t exclusive to businesses and it has a number of different facets.

If an underwriter decides that your business carries a significant level of risk then premiums may be loaded or there may be certain exclusions to the policy. However, knowing these exclusions is vital to you and your business as it may be that you have to seek other, specialist insurance.

Your business assets are vitally important to the success of your business you need to ensure that all of these are insured. For this reason, it is vitally important that you apply for specialist underwritten insurance so that you know if any specific items are excluded from your policy and how you can minimise your risks.

If your business deals multi-nationally then you’ll need a company such as Catlin Insurance US who operate globally. As well as this, if your business is expanding then you should consider a provider who operates across a variety of fields as these will fully understand the needs of your business.

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