In this installment, we continue to look at ways for businesses to help keep their insurance costs as low as possible.
- Take into account the physical make-up of your business.
Loss control representatives will likely visit your business to review your exposures and to decide whether to make a positive or negative recommendation to the underwriter who may be quoting your account for the insurer. Some of the questions they will ask are:
* Do you have building sprinklers? If so, is it adequate for your type of business?
* What is the total square footage?
* Is there any exposure to flammables on the premises such as chemicals or fuel?
* Is there a central station burglar and fire alarm system?
* What is the age of the building?
* When was the plumbing and electrical last updated?
* When was the roof last updated?
* How is the housekeeping?
* Is there a preventative maintenance that is undertaken by the business?
Therefore, addressing some of these issues and making improvements will likely increase the desire of underwriters to extend a competitive offer of coverage.
- Institute a safety committee.
Loss control personnel often look to see how the organization perceives risk and what it is doing to address risk. The existence of a safety committee with a committee chairperson can have a positive effect on insurers.
- Limit how often insurance coverage is “shopped”.
How often is your organization going out for quotes? Insurers often ask how often you shop your business insurance and this is reflected in a written report to the underwriter. Underwriters generally do not want to expend the tremendous amount of time working up an account where the insured is only shopping price or will move the account the following year when a perceived better deal comes along. Insurers like to see stability with business insurance programs.
- Implement written safety and risk management standards.
Businesses that can demonstrate that they have written policies on safety and risk management that are regularly used often get high marks with insurers.
Businesses need to remember that a common obstacle to obtaining a favorable quote and preferred coverage terms is the loss control representative that the insurer sends out to the business to do a walk-through. This person reports back in writing to the underwriter their impressions of the business and will often make a recommendation to write or decline the account.
…to be continued.