YOU ASK:

Does an insurance company have the right to know your company's gross revenue?

WE ANSWER:

Well, gross revenue figures are not classified information, anyway. The insurance company should know your company's gross revenue. This is because your insurer has to determine the total amount they need to insure.

The concept is this, the higher the gross revenue of a company, the higher the risk of income loss at stake, the more business exposure you have, the more sources of income you will get, and the more income you will get, the bigger impact of financial loss is up for grabs.

Gross revenue is one way for you to measure the level of risk your company is facing, especially in the area of liability. However, there are still other ways - such as your payroll. It is important to be able to get the right amount of liability coverage. If you get too much, then you are paying for a portion of insurance that you don't really need. If you get too little, you are exposing your company to potential financial ruin in case a catastrophic event that causes a huge liability claim occurs.

However, if you'd rather not let your gross revenue figures readily available, there are some considerations. Make sure that your insurance company and agent can be trusted. Credibility and confidentiality are two characteristics that your agent must possess. Since they are dealing with the gross income of your company, they should be able to handle them with care and utmost confidentiality.

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