It seems like there are always too many things to do and never enough time. Yet, reviewing your insurance portfolio might be one of the most important items on your “to-do” list.
Why do you need to review your policies?
- First of all, it’s an opportunity to ensure that you or your business aren’t paying more than necessary for coverage;
- Secondly, it could identify coverage gaps;
- Thirdly, you can oftentimes find ways to save money by combining products – property and liability (general), errors & omissions (E&O) with property (commercial) policies;
- Fourthly, if you have positions within some of these policy types that you don’t need anymore, there is always the potential to remove them from the policy portfolio.
In addition, if your business has been growing or changing, these changes may impact your insurance needs and how much you should be paying for coverage. For example, say that you have a D&O policy with a carrier but over time have decided to conduct all transactions internally instead of through a broker. In this case, have you actually reviewed whether or not it is necessary to keep this coverage?
The other reason to review your insurance portfolio often is because carriers do change their rates – some as frequently as every quarter. So those 20% savings you were getting one year ago might now be 60%. If nothing else, reviewing your coverage at least once a year will allow you to stay on top of rates.
The point is, whether you are reviewing your coverage twice a year or every ten years, it is well worth the time. Whether that time results in savings, just knowing what your business needs, or eliminating unnecessary expenses – it’s all good. As Yogi Berra once said, “It’s always better to be over-prepared than under-prepared.”
Make sure that you review your insurance portfolio often to ensure that you are covered properly and pay less for coverage. Do not neglect this vital step. If you don’t have the expertise internally to make sure everything is completed correctly, consider hiring an independent agent or broker who should be able to help.
What if a claim is delayed or rejected?
Your insurance coverage is ineffective if you can’t get the business interruption or other claim paid. If your current carrier won’t pay what you think is covered, it’s time to investigate another insurance company that will honor their commitment to providing effective protection for you and your business.
“Bloated” policies are problematic & unnecessary – but carriers don’t always agree with that opinion. Don’t let your policy become bloated because of “excess” coverages that either cause premiums to rise or force exclusions because clearly stated limits were exceeded. A good example would be looking closely at the definition of contractors under an E&O policy (or, even better yet, ask your broker/agent about this specific issue). The same goes for other types of policies, including workers’ compensation.
What about identity theft or personal injury claims?
Many business owners are not aware that in addition to property damage or liability, many errors & omissions policies also provide identity theft coverage. Some even offer medical malpractice insurance products. Another important point here is that it is key to check your policy limits for these types of claims – if they are reasonable ($2 million/$5 million), you should consider increasing them ($5 million/$10 million). While this may increase your premium, having larger limits can be comforting when a claim does arise.
Exhausting All Appeals Available
It is important to note that if you do have any disagreements with your carrier about coverage issues, then it’s best to pursue all avenues available before considering taking legal action. Filing a suit against an insurance company can take months and cost thousands in legal fees. If you do decide to move forward, we recommend you consult with sympathetic injury lawyers as soon as possible so they can guide you through the process and potentially save you money.
Can an independent broker save you money?
One of the most common questions is whether or not an independent broker can save money on insurance coverage. The answer is “yes,” – but it’s more complicated than that question suggests. While you probably won’t find a company that will charge less for every policy, if there are multiple products, then some carriers may offer cheaper rates overall. Also, keep in mind that while one carrier might always be slightly higher on price, they could also have better service or broader product availability.
So while some brokers will still think about how to get you switched right away, others are really focused on asking questions so they can help you get the best risk protection today with competitive prices, so your business runs smoothly tomorrow.
As always, if there are questions or concerns, please get in touch with your insurance advisor.
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