Ensure Pricing Accuracy and Validity of Insurance Coverage

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

As the insurance market for nonprofit and human service agencies continues to harden, with fewer and fewer insurance companies willing to insure valuable community programs, careful completion and review of the insurance applications will ensure proper pricing and coverage following an insurance claim.

Failure to ensure an application’s accuracy can lead to voided coverage, insufficient coverage, or overpaying of insurance premiums.

A best practice approach is to avoid all of the above by reviewing areas of concern that commonly lead to underwriter confusion and mistakes on insurance policies.

Statement of Values

Carefully review the broker’s Statement of Values (SOV), which lists each location and its underwriting characteristics. Each characteristic aids the underwriter in pricing and rating for the exposure to risk. The SOV will include:

• Location usage - is the location used for office space, a resale shop, a residential recovery center, or all three?

• Square footage - this is easy to overlook, but impacts property and general liability insurance premium.

• Building construction – what is the building date, construction type, and safeguards like non-sprinklered wood frame or sprinklered steel/concrete construction? Inquiring underwriters (and their supervisors) want to know.

• Are all non-owned locations listed? Leased space is often omitted. List the addresses of all operations to ensure coverage.

Vehicle Values

Is the list of vehicles accurate and does the replacement cost of each vehicle include modifications such as wheelchair lifts? Non-standard vehicles are often underinsured if the agent assumes it is just a standard Dodge Caravan without modifications.

Complete the Full Insurance Application

Renewal applications often do not contain space to update existing program details. So, share the details of new programs or ask about recent incidents that could result in a claim. Worse yet, a competing underwriter may offer a quote without firm and bindable terms, meaning the work product is incomplete and does not consider all exposures.

List Employed and Contracted Professionals

Professional liability is often rated on the number of employed professionals. A review of this section will ensure pricing accuracy and highlight professions requiring separate coverage, such as medical malpractice insurance.

Business Interruption Worksheet

Rancho Mesa clients understand the importance of business interruption coverage, so a thorough review of the worksheet’s definitions, the information contained therein, and hypothetical claim scenarios will help leadership make informed decisions. Without the proper limit, a seemingly insignificant property claim can result in critical lost revenue and extra expense. 

Right-sized Deductibles

Why pay for a smaller deductible if the organization only reports claims of financial significance? To ensure insurance premiums match leadership’s risk tolerance, the policyholder and broker should carefully review auto, property, and liability deductibles. Organizations accepting risk in the form of a higher deductible will realize premium savings.

In 2025’s hardening market, insurance underwriters need accurate and updated information to provide competitive and comprehensive quotes. Fortunately, it is easy to avoid a potentially uninsured claim or inaccurate insurance premium with a well planned and executed pre-renewal insurance review with an experienced insurance broker. Use these items detailed above to ensure the organization, its mission, and their employees are protected.

To ensure your nonprofit or human service agency has accurate coverage, contact me at (619) 937-175 sbrown@ranchomesa.com.