Capacity can refer to the amount of capital available to an insurance company, or to the industry as a whole, for underwriting insurance coverage or coverage for specific perils.

This can also refer to a particular area of insurance. For example a high-value housing development has one contractor framing homes. If he is working scattered over a grid of homes this will be regarded as less risky then working on houses side-by-side. The insurer has to consider the capacity for a loss such as a fire engulfing the neighboring properties.

When placing business insurance the more information you can provide your broker or agent then the better they can market your risk. There will not be a surprise situation once you have had a claim and usually you can get a better rate.

Turners Tips recommends that you do your homework when placing insurance. Effective risk management on your part will help to reduce claims. Understanding where you are most likely to suffer a loss will help you choose the coverage necessary in case of the financial consequences of a claim. Take control of your insurance.