Business Insurance Advice
Reevaluate Your Insurance Now
How to save money and maximize your coverage in today’s economic environment.
Businesses often automatically renew their policies without taking a close look at what has changed in their business over time. Existing coverage may no longer be suitable if businesses have grown substantially. You may not be aware that many insurance companies are reducing premiums and offering more comprehensive coverage because we are currently in a soft or buyer’s insurance market. The first step is to sit down and reevaluate your current policy with your insurance advisor to make sure that it is still suitable for your current needs. Your insurance requirements are likely to change due to trends in your business and in the economy, and it is important to keep your policy up-to-date. If you purchase property insurance, make sure to get a replacement cost valuation of the property. These values have changed dramatically over the last 12-to-18 months due to various factors such as cost of oil, labor and other hard costs.
Given the current state of the market, carriers are offering more reasonable rates for the same if not better business insurance coverage. You likely can get expanded coverage for the same price, if not lower than you’re currently paying. For instance, one coverage often overlooked by many business owners is Employment Practices Liability Insurance (often referred to as EPLI), which provides additional protection against claims for acts such as sexual harassment, discrimination in the workplace and wrongful termination. Many business owners opt to wave this coverage because of the premiums; however, now you can likely get this for a much more cost-effective fee. Other options are: internet and privacy breach coverage; environmental insurance; professional liability (also known as errors and omissions insurance); crime policies and more.
Important Checklist & Tips
It is important for all policyholders to ask themselves and their insurance advisors some key questions when thinking about their insurance program. The following should be taken into account when analyzing your coverage to better understand if you’re getting the most bang for your buck:
- When was the last time I received a coverage audit? Coverage audits are key in determining whether you are properly covered against current exposures. You should ask your insurance professional for an audit at least once annually, or if there is a major change in your operations (for example, a significant increase or decrease in your workforce, an acquisition, or a major change in company revenue).
- How do I make sure my premium is the lowest possible in today’s market? Always ask your insurance advisor to provide quotes from several carriers as part of your renewal to ensure that you’re getting not only the best price, but equally as important is quality of coverage and overall value.
- What type of value-added services does my agent or broker provide to me aside from a quote at the end of each renewal? Some important value-added services to look out for are: claims management; loss control & risk management; vendor contract reviews as they relate to insurance requirements.
- Is my insurance advisor available to guide me through any questions or concerns, or help me reevaluate my risk exposure and coverage needs? If they are not providing the services mentioned above, the answer is likely no and if that is the case, you should seek another firm to handle this for your business.
From a client standpoint, the most important thing to know is that you are in a buyer’s market. While price is an important factor, one must also make sure that you’re getting broad coverage; therefore, take the time to learn about each item that you purchase to help you understand exactly what you are covered against. The value of your insurance advisor often does not become clear until you have a claim.
These are just a few strategies and tips that will benefit today’s consumers: By taking advantage of the market, by reviewing your policy in detail to make sure it is up-to-date with your current needs, and by maintaining a good working relationship with your broker, you will be in a better position to take full advantage of what is best for you and your business.
James W. Moriarty
Jim Moriarty is Senior Vice President of Enterprise Insurance Services LLC (a subsidiary of Enterprise Bank.) He has more than 26 years of experience in the insurance and banking industries. A graduate of UMass Amherst, Jim resides in Chelmsford. He is involved in many local activities including the Francis Ouimet Scholarship Fund and Distinguished Alumni Committee of Lowell High School.