12 Top Issues of Concern and Interest for Entrepreneurial Buyers of Commercial Insurance

  1. Insurer Financial Strength and Capability – How ongoing soft market conditions in combination with the economic downturn of 2008-09 have led to insurer rating downgrades, that can be dangerous for unsuspecting consumers; matching insurer capabilities with client operations and exposures; standard vs. E&S market choices – when is the latter appropriate and cost-effective?

  2. Errors & Omissions Coverage – Especially important for those in the consulting, financial service, investment, design, and marketing industries, but often overlooked, or wrongly perceived as price- prohibitive. Frequently required by client contract, E&O coverage can often be custom designed at relatively low cost.

  3. International Exposures – Can range from liability, workers compensation, auto, and medical evacuation needs for domestic employees traveling abroad to property, products liability, and contingent business interruption concerns around the World. Goods being shipped to or from foreign ports? How splitting foreign sales into a separate program from the domestic one can afford broader coverage and a cheaper net products liability program price.

  4. The Importance of Good Claims Expertise – The reason why companies buy insurance in the first place. How better insurers maintain good reserving practices, and why. How insurers with “intent to pay” claim philosophies benefit the client vs. those that are adversarial in nature. Recognizing how experience, staffing, authority, and reach matter in claim response. Be wary of public adjustors, rarely needed nor worthwhile, when quality insurers and brokers are employed!

  5. Taking One’s Account to Market – Why it’s an effective tool when properly done, but not over-used. How to maintain insurer interest, while getting their best and most competitive offer. Designing consistent broad specifications to get best insurer response. Implementing strategies for market selection, and avoiding insurer blocking.

  6. Self-insurance – How to pick proper deductibles and retentions, and why assuming a certain level of risk is prudent. Why self-insuring small claims is generally cost-effective, and where “frequency” of small claim submission will penalize a company with insurers more than occasional “severity.” Analyzing one’s choices in risk management: avoidance, assumption, sharing, or transfer?

  7. Loss Control and Program Administration – The benefits of employing insurer-provided services, and when to bring in outside fee-based help. Why designing good contracts with strong indemnification and risk transfer wording is critical, especially for contractors. Employing protective strategies for property such as alarms and sprinklers, and why implementing procedures for consistent certificate request and maintenance is critical for businesses that use subcontractors.

  8. The Different Facets of Liability – How much umbrella coverage is enough? What are the personal liabilities assumed for serving on a for-profit board, and how can a director or officer protect himself? Measuring fiduciary liabilities for handling corporate investments, and how about those for administering corporate benefit plans? Products, vehicles, staffing and services. . . . all have inherent risks for which specific liability insurance exists to afford prudent protection.

  9. The Elements of Good Property Loss Recovery – Long before a loss occurs, what a company ultimately recovers frequently begins with sound “valuation.” Does replacement cost truly eliminate depreciation, and provide “new for old” in choice of construction materials? How to avoid coinsurance penalties, by correctly insuring to value, with smart deductible choices rather than underinsurance mistakes. Is selling price appropriate for one’s retail operation, and how about resultant loss of revenues and extraordinary expenses following a bad fire? Making sure proper perils are covered, including often ignored flood, quake, political risk, and storm exposures in an increasingly hazardous world.

  10. Employment-Related Risks and Remedies – Most business managers and owners would concur their firm’s employees are their company’s greatest strength. But how about when these people become sick, injured, or angry on-the-job? From workers compensation to a wide array of group benefits insurances, employee health and wellbeing can be prudently secured and managed. Why employment-based claims for alleged harassment or abuse are frequent concerns for companies today, large and small. How to protect pension assets and other corporate property from employee theft?

  11. Property in Course of Construction – From building of new facilities to renovation of existing properties, course of construction exposures are numerous and frequently disruptive. How to safeguard building materials from theft and vandalism through prudent alarms and lighting. Where special loss control techniques prevent construction worker injury, and proper use of contracts ensures smart indemnification and liability transfer. How correct valuation and prudent builder’s risk coverage forms will get the project safely to completion.

  12. “Advisory” vs. “Product” Approach on Commercial Insurance – Why company executives should see their insurance broker as a trusted financial advisor; how to weigh benefits of employing a smaller broker against those of a larger firm with national reach, and which is appropriate for your firm? When a broker’s role as “consultant” is more valuable than simply as a “placer” of coverage?