In this simple illustration, let's look at two businesses located in the same territory but in different ZIP codes. Both are florists of similar size and construction, and both have the same rating information. In a traditional territorial rating structure, these businesses would pay the same premium. But do they really have the same loss potential?
When we analyze the environmental variables within the ZIP code for each florist, we can see how those variables contribute to the total loss potential. In fact, the unique environmental attributes within a ZIP code can have markedly different effects on losses from different perils.
The ISO Risk Analyzer® Businessowners Environmental Module relates losses to objective and identifiable geographic characteristics and provides a highly refined estimate of loss potential based on those characteristics.