Business is changing. The ISO Businessowners Program is changing with it.By Gregory Palumbo, Joseph Lam | September 8, 2020
Even before the COVID-19 pandemic upended “business as usual,” many businesses have been evolving away from the “usual” for some time. Fitness centers have transformed into a vast and variegated array of spin centers, hot yoga studios, meditation rooms, Pilates, and dance centers. Office buildings have sprouted “co-working” spaces.
For over three decades, the ISO Businessowners program has helped insurers offer property and liability coverages to these and numerous other small and midsize businesses.
To keep pace with the changing nature of today’s business risk exposures, Verisk is making the most significant and wide-ranging update to the ISO Businessowners program since its inception.
Major classification overhaul
The proper classification of risk is one of the fundamental elements of successful underwriting, and a core value of the ISO Businessowners program is its classification system. Leveraging ISO MarketStance for a ground-level view of evolving business types and trends, this system will see a sweeping overhaul, with nearly 150 new classifications, updated NAICS codes, new rules and advisory prospective loss costs, and the elimination and/or consolidation of additional classes. Our development process in creating the new classifications included in-depth market research and conversations with our customers.
Some of these new classifications will help refine current classifications. For example, our current program includes a classification for “medical offices.” We plan to change that classification to “health specialties” and add numerous sub-classes to enhance segmentation, including classes such as walk-in clinics, women’s health clinics, radiology, and outpatient addiction centers.
Collectively, the new classes and added granularity will help insurers more accurately price today’s evolving business risk exposures. They can also help insurers tailor their marketing and underwriting efforts to a potentially new or broader customer base.
Some additional highlights of the classification update include:
- a new places of worship classification to accommodate small, “start-up” churches
- new classifications for light manufacturing to capture artisanal entrepreneurs engaged in coffee roasting, leather tanning, bookbinding, publishing, and more.
- changes to retail class codes such as a sub-class for rentals (where applicable), the removal of outdated classes (so long, video rentals) and new classes (hello, online stores)
- new classifications for contractors
- expanded current motel classifications to include hotels, inns and hostels
- new cannabis-related classifications
- new E&O classification for Information Technology businesses
- expanded Office classifications to include co-working spaces
Along with revamped classifications, we’re providing more in-depth definitions and guidance on class codes to help insurers hone their underwriting and marketing efforts.
A new auto service program
Another hallmark of this update will be the introduction of an auto services program that will include not just new class codes but rules, loss costs, and specific endorsements to address the unique exposures in this industry class.
As you might expect with such a thorough update, we also plan to revise the base insurance policy form (BP 00 03), rules, and loss costs for consistency with other ISO lines of business, as well as addressing various emerging issues that we have been tracking such as cannabis and drones.