Posts|January 20, 2021
Does The Insurance Company Really Matter?
By Natalie Sherod
Risk Advisor CPCU, CIC
Day after day we are inundated with advertisements about different insurance companies. Each indicating they can offer better coverage and service at a reduced price than what you currently pay. So, does it really matter which company you choose to insure your company? Absolutely. There are a number of factors to consider when choosing an insurance company.
Financial Stability: An insurance policy is a “promise to pay.” As a business owner, you are putting faith in that the company will have the ability to pay a claim in the event one occurs so it is very important to partner with a company which has the financial capacity to do so. Luckily, AM Best, an independent rating service assesses the creditworthiness and reports on over 16,000 insurance companies worldwide. The rating scale provides not only a letter rating (most contractual agreements require an A rating), but also a financial outlook of negative, stable, or positive. By understanding the rating of the insurance company, an organization can have more confidence the promise made can be fulfilled.
Claims Reputation: Speaking of claims, it is good to have an understanding of prior experience with this company’s claims handling process. Some companies have better reputation than others when it comes to finding coverage for the policyholder versus trying to find ways to deny coverage.
Resources Available: Insurance companies have the benefit of having access to large amounts of data. Some companies use this data to develop tools and resources for their policyholders. It is always a good idea to ask your broker what type of resources may be available in terms of risk control and claims mitigation resources.
Policy Language: This can (and should) be an entire blog on its own, but insurance companies that are willing to offer broad language coverage and endorsements will provide the opportunity for organizations to be more protected.
Company’s Geographic Footprint: Insurance companies need to be licensed and appointed to do business in different states. It is wise to consider this and compare with your organizations plans for expansion.
Premiums- While it should be said that a company or policy should not chosen on price alone, it is clearly a huge consideration. When thinking of premium, think no only of the price, but also all of the additional comments above. Perhaps a policy might not be the most inexpensive, but it may provide the best coverage and value for the cost.
Only after you have identified acceptable insurance companies, with appropriate coverage, solid claims handling and effective risk control services should price be considered. You should also not underestimate the value a specialized and knowledgeable broker brings to the table when selecting the right insurance company.
Articles|February 24, 2021
Risk Tolerance – How Much Risk Should You Take?
By Jeff Cavignac
President CPCU, RPLU, ARM
Posts|February 24, 2021
The Basics, Part 2: General Liability
By Preston Cavignac
Principal CPCU, CIC, CRM