I bet you never thought that your website could cause your insurance rates to go up. Well, you'd be surprised.

The fundamental principle of insurance is the underwriting process. Insurance companies use the underwriting process to understand the risk and find mechanisms to price it properly. Pricing it properly is the key. Too expensive and nobody will buy it; too cheap and claims could ruin you.

The basic principles of underwriting have remained unchanged since forever. The idea is to gather as much information on the risk of the business requesting insurance. The more data that's collected, the more accurate the insurance pricing will be. Things like operations and revenue are easy and make sense. It gives the insurance companies an idea how big and how dangerous your business is. They’ll also want to know what your employees’ duties are and what you pay them. Higher paid office employees are statistically less likely to have a claim than minimum wage construction workers.
Fun Fact: The word “underwriting” comes from the birthplace of insurance: Lloyd's Coffee Shop in London. When a ship bound for the new land needed to be insured, people would write their name under the name of the ship.
Insurance companies gather information many different ways. The primary way is just asking. Insurance is a contract and a certain degree of trust is required, so if they want to know something, they just ask. Insurance is getting smarter and more efficient, though, and things like 3rd party data sets and public information are used more and more when evaluating a risk.

Your Website Betrays You

One element many businesses forget about is their website. Your website is the public window into your business. The good news is you control what's on your site. If you don’t do something, don’t say you do it.

If you are a janitorial business that cleans offices, don’t show pictures of someone on a crane washing windows 20 stories up because it was a convenient stock photo. If you are a landscaper that doesn’t really clear snow, don’t say you do in hopes up picking up some extra business. It will hurt you in finding insurance right now because some of these activities may disqualify you from coverage or increase your costs. One issue we see a lot is a restaurant or bar that has pictures of live entertainment, but doesn’t have a stage. While it may make your restaurant super fun on Saturday nights, this throws the insurance underwriting process off every time.

So, What Do You Do?

We think honesty is the best policy (Mom was right). Keep it simple - if you do something, say you do. But if you don’t do it, or are trying to look bigger than you are, please don’t. You are potentially hurting yourself and you don’t want to pay more, or make it harder to find coverage for your business because you added a picture to your website that isn’t really representative of what you do.