![]() By: Bill Passarotti, Senior Vice President, HUB International Northeast It has never been more important for business owners and leadership teams to strategize with their insurance advisor well ahead of their next policy renewal. Largely due to impacts of the pandemic, double digit rate increases are expected across the board. Those in high-risk areas (such as natural disaster) or with underlying losses or underwriting issues are potentially facing even higher increases. With rates steadily on the rise, the key to reducing insurance costs this year will be managing your business risk. Practicing proper preventative maintenance is vital to minimizing insurance rate increases. The best plan to help mitigate the risk and potential losses is to work to prevent them. In addition, the following best practices will help position your business in a positive light with the insurance underwriters: • Create an emergency plan. Your emergency plan should take a holistic approach to take all hazards into account, including but not limited to fire, natural disasters, water damage, pandemic, workplace violence, terrorism, civil unrest, etc. Consider the potential for a compound disaster, or a catastrophic scenario in which: COVID-19, a natural disaster and cyber breach all converge at once. How will this affect your business or facility? Make sure your plan covers your entire portfolio based on local risks and train your staff to implement it accordingly. • Preventative Maintenance & Safety Measures: Actively engage in preventative maintenance measures. This includes testing fire pumps monthly, fixing broken handrails and changing out electrical panels, just to name a few examples. These best practices keep your building up to date, which reduces your likelihood of a claim and paints a positive picture for the insurance companies. Water damage has emerged as a major loss leader in recent years so it’s important to know where your shut-off valves are located and how to isolate water leaks to minimize risk. Make sure water pumps, water tanks and other domestic water systems are properly maintained. There are numerous measures that a business can take to strengthen safety on the property, for employees and clients alike. To begin, develop a comprehensive self-inspection and audit program. Train your employees to identify hazards before they cause losses. Consider external security risks and potential perimeter breaches. Utilize cameras, access control and even hire a third-party security team if your property is in a high-crime area or has been the subject of looting. Common onsite losses like slips, trips and falls can affect anyone on your property. Focus on upkeep of parking and common areas and other high traffic spaces. Reducing the spread of COVID-19 and other communicable viruses across a facility requires increased cleaning efforts, installation of effective barriers and new paths of egress to promote social distancing and enhanced tenant communication to streamline efforts and promote optimal infection control. • Contractual Risk Transfer: Working with third parties can potentially add a new level of liability exposures for your business. Third party losses can impact significantly impact your bottom and long-term profits, especially when there’s a question of who is liable. Require that all contractors working on your property provide a certificate of insurance (COI) proving that they carry adequate liability coverage and workers’ compensation insurance. COI tracking is a vital risk-management activity, however, it comes with its own set of issues and must be properly managed and supplemented with additional measures. Even if the COI is accurate, the underlying policies could have severely limiting exclusions. Additionally, the policy that the COI certifies could be cancelled tomorrow, and without the insured endorsement, the certificate holder does not have to be notified of policy cancellation. • Implementing Inspection Suggestions: It is very important to implement any recommendations that the insurance company suggests during an inspection. Working with an insurance broker that has specialized a risk management and loss control division is extremely beneficial for this reason as they can help you accomplish these goals proactively, meeting the carrier's guidelines and expectations. These are just some of the ways you can get ahead of rising premium costs. Now more than ever, it is imperative to work with your insurance advisor to review your coverages and to understand what your P&C policies cover, what they don’t and the best ways to mitigate the individual and unique risks of your properties. CIANJ member, Bill Passarotti, currently serves as Senior Vice President with leading global insurance brokerage, HUB International. Based out of Summit, NJ, Bill works with businesses in a wide variety of industries on custom-tailored, comprehensive risk & insurance solutions. He can be reached at 908-666-6200 or [email protected]. For the latest information, guidance and resources on COVID-19 to help you protect what matters most, please visit www.hubinternational.com/coronavirus.
1 Comment
6/5/2024 02:13:07 am
Brokers often provide educational resources and training on risk management and safety practices.
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