Insurance Law/General Liability Insurance
We recently discovered that we have been charged by our sales for 13 years instead of our payroll as the premium base for the following two catagories: 92451-Electrical Apparatus--installation, service, or repair NOC & 98993-Sign erection, installation, or repair.
My question is in Pennsylvania, can your insurance charge you by your sales as a premium base instead of payroll like the commercial lines manual states? We have been being charged by our sales for years and were always wondering why our insurance has been so high. Everyone else we checked with in these classifications has been charged by their payroll.
Is your agent and the underwriter allowed to set their own way of calculating the premium base? We have a meeting with him to discuss this as we just recently discovered this. I was hoping to get an answer before we meet with him.
I can't answer specifically as to what Pennsylvania does. It may be that the way your insurance company has filed their GL program has your specific codes as sales based, while other companies have their filed as payroll. The agent and underwriter don't generally set their own way of calculating it, but they may used a percentage basis to determine which should apply. For example, if the majority of your business is sales driven rather than service or repair, I can see why a company would rate it that way.
Sorry I can't be of more help.