Hospitality News

Why Do I Need to Furnish Financial Information to the Insurance Company?

More and more often today, especially on new purchases, many of the most competitive companies price wise and feature wise are asking for financial statements and other business related material.  Not only financial statements, but also they are asking for a business plan and resumes of the principals.  This is especially true on new ventures and new purchases. I’ve been asked a number of times, “What business is it of the insurance company, as long as I pay my premium?” That’s a fair question and one that can be answered either yes or no.

Do I have to furnish a financial statement, business plan and resume’.  The answer is both yes and no.  Yes, will need to furnish the requested information if you want the very best rates and coverage. No, you won’t need to, if you’ll be satisfied with just a good policy at a decent premium.  Let me ask you this, “If you could have a Lexus or a Kia for the same price, which would you choose?”  Most would choose the Lexus.  That’s somewhat the same with insurance.  You can get the Lexus, BMW or Mercedes policy for the same price as a Kia policy if you will furnish financial information and business plan.

With the economy in many areas of the country facing a downturn, companies are concerned.  One of the major concerns is that the insured has a plan, to make the property successful, and has enough of a financial cushion to maintain the property if it doesn’t perform to expectations.  We often see that a cash strapped property tends to have more insurance claims than a profitable property.  While it’s true a lender may have reviewed some of this information, the insurance company is looking at it from a somewhat different perspective.

Another area of concern I’ve heard is the matter of privacy.  Just like banks, our agency is required by law to safeguard your financial information.  Once we release the information to the insurance company, they also have a duty by law to protect your privacy.  None of our records or the insurance company records go to the IRS or any government entity.

We at RCI and the National Hotel Insurance Program work on your behalf to provide you with the broadest possible coverage at a competitive premium.  By providing the above information when the company requests it, you are actually helping yourself!

Please let us know if you have questions about some of the changes happening.  The good news is that the low rates we’ve seen are fairly stable for claims free properties.

Contributed by:

Mick Cottom

For further information you may contact:

RCI Insurance Group

621 N Cherokee Ave, Claremore OK 74017

(Ph) 800-753-5797

(Fx) 888-341-6088

www.rci-ins.com

National Hotel Insurance Program

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