Why does my business insurer need my profit and loss statement?

Question

Why does my business insurer need my profit and loss statement?

Answer 1

For one to find out what you company is worth!  It's like insuring a car, they aren't going to give you 10,000 for a 3,000 car!  (they generally take pics in the begining and end)

Also to make sure you are not a risk!

Answer 2

He's trying to put your case into a value category.

They all do that, you and I are just numbers to them.

Wait till you have a claim, the dragging feet will smell.

Answer 3

Its part of the underwriting evaluation.

Answer 4

This is likely for business interuption and extra expense coverage.  Business interuption and extra expense coverage replace lost revenue or profits, cover certain overhead expenses, and pay extra expenses to keep you operating.  The insurer wants to know just what kind of risk they are taking in offering this coverage to you - and they want to be able to pay the claim quickly and fairly if your business is shut down due to a fire (for example).  This is usually good coverage to have.

They also ask your revenues as a basis of setting your overall premium.  A business with revenues of $50,000 is in a different category than a business earning $5,000,000.  

I hope that eases your concern!

Answer 5

1, to establish a value of the business.

2.  To determine if it is a ligitimate business or a "hobby business."

3. To determine the kind of business it actually is. Different businesses entail different types of risks.