When Was Your Last Independent Business Insurance Review?
When Was Your Last Independent Business Insurance Review?
Bill Goddard, CPCU, Principal, Insurance Advisory Services
Business owners, CEOs and CFOs have enough on their plates – being experts about their business insurance policy is rarely at the top of their list. Coverage often goes unchallenged and unexamined for years until something prompts a closer look. That could include being asked about the business’ coverage by a board of directors; undergoing a large business change that requires different coverage; or, unfortunately, disaster striking and learning there isn’t adequate coverage.
A business should undergo an insurance review every three to five years to stay up to date with current pricing and coverage options. Large companies hire risk managers to work on this full time, but a medium-sized or small business usually does not need or cannot afford this full-time function. But that doesn’t mean the business should miss out on the risk management process.
An independent risk manager can help a CFO, controller or accounting department uncover potential areas for insurance savings. An independent insurance review will identify areas where the insured can reap immediate savings. Independent advice means the consultant does not sell insurance, so a business receives objective advice about necessary coverage and appropriate cost.
Factors business owners often overlook when purchasing insurance
Even if a company takes the time to secure competitive bids for their insurance – and most do – there are often hidden costs that business owners might not recognize.
Each business has risks, and sometimes those risks are extremely unique. An independent analysis can help identify the correct coverage and cost for the business to avoid being underinsured or overpaying.
Questions a business owner should ask when evaluating insurance
To ensure adequate protection in every area of a business, a CEO or business owner should consider these questions:
- Do we have business interruption coverage that will protect income?
- Does our coverage protect us in event of our building burning down, or if one of our suppliers’ buildings burns down and prevents us from doing business?
- Do we have adequate cyber insurance?
- Should we have crime insurance?
- Do we have safety programs in place to reduce the cost of workers’ compensation coverage?
- Are people enrolled in our health insurance plan who are not eligible?
- Do we have the right health insurance plan design?
- How can I reduce the cost of insurance without reducing the coverage?
Most companies don’t review their policies often enough. Even with a great insurance program and trusting relationship with a broker or provider, surprises can arise.
