How to Read an Insurance Proposal
Every quote has the same few parts. Once you know what each one means, comparing options takes minutes, not days.
What Each Section Means.
General meanings, written for architects, engineers and consultants. Your own quote and policy control.
Premium, taxes and fees
The premium is the price of the policy for the term. Some quotes add state taxes, surplus lines taxes or carrier fees on top.
What to check: Compare the total payable, not just the premium line.
Per claim and aggregate limits
The per claim limit is the most the policy pays for one claim. The aggregate is the most it pays for all claims in the policy year.
What to check: Look for sublimits, which are smaller caps for certain kinds of loss.
Definition →Deductible
What your firm pays on a claim before the insurer pays. On professional liability it may apply to defense costs, damages or both.
What to check: Ask whether the deductible applies to defense costs. First dollar defense, where offered, keeps defense costs out of it.
Definition →Retroactive date
On claims made policies, work done before this date is usually not covered. Most A&E firms keep the same retro date for years.
What to check: Confirm the new quote keeps your current retro date.
Definition →Policy period
When coverage starts and ends. Firms often line up all their policies to renew on the same date.
What to check: Make sure there is no gap between the old policy and the new one.
Definition →Carrier, admitted status and rating
Who issues the policy, whether it is admitted in your state, and its AM Best rating. Many contracts require A- VII or better.
What to check: Compare the rating to what your contracts require.
Definition →Subjectivities
Items the carrier needs before or after binding, such as a signed application, loss runs or a driver list.
What to check: Get them done on time. A missed one can change the terms or lead to cancellation.
Definition →Payment plans
Some carriers bill in installments, often with a down payment and a small fee per installment. Others require payment in full.
What to check: Ask which policies are billed together and which are billed separately.
Auditable premium
Workers compensation is priced on estimated payroll. After the year ends, the carrier compares it with actual payroll.
What to check: Give realistic estimates. The audit can add premium or return some.
Definition →Endorsements and options
Endorsements add, remove or change coverage. Quotes may also list optional coverages that are not in the price.
What to check: Note which options are included in the total and which are not.
Definition →Before You Sign.
Is a quote the same as coverage?
No. A quote is an offer with conditions. Coverage starts only once the policy is bound, and the policy terms are what apply.
Why are there several options on one quote?
Carriers often show the same policy with different limits, deductibles or defense terms so you can compare price against protection. The lowest price usually comes with a higher deductible or narrower terms.
Why does the price change after I accept?
Quotes are based on the information on your application. If revenue, payroll, location or dates change, the premium can change too. Taxes and fees can also shift by state.
What happens if my summary and the quote disagree?
The quote and the policy control. Any summary, including ours, is there to help you read them, not to replace them.
Should I just pick the cheapest carrier?
Price matters, but so do the retro date, defense terms, exclusions and the carrier’s rating. Two quotes with the same limit can respond very differently to the same claim.
General education only. Not an interpretation of any quote, policy or contract, and not legal advice. The wording of your own quote and policy controls.
Send Us Your Quotes. We’ll Compare Them Side by Side.
We line up limits, deductibles, retro dates and price so you can decide with the full picture.
Tell Us About Your Firm. We’ll Tell You What We See.
Starting out or renewing, with a policy in hand or not. If something is worth discussing, we’ll call. If not, we’ll say so.