Even after all your risk management time and effort, most firms need insurance to protect the bottom line from unexpected large losses or lawsuits.
Is insurance just a necessary expense?
If you buy transactionally – meaning you buy a new policy when the need arises, and cancel when you think the circumstances have changed, or you change brokers for a slightly lower cost … then the answer to that question is probably, “Yes, … it’s just another #!$%* expense.”
If you buy strategically – meaning you predict and project your needs with a well-reasoned plan, consolidate dates and broker services, consider customer needs, and you take the long view … then the answer is more certainly, “No, … it’s an investment.”
One subcontractor client found that certain pre-agreed insurance “extras” were a definite competitive advantage. It made his firm easier and quicker to do business with, because he had the key protections in place. It was a bit more expensive, but worth it.
Is insurance a commodity – just the price matters?
Lots of mid-sized and smaller businesses have difficulty understanding insurance coverage – and brokers often aren’t much help. So, they focus on price.
When they aren’t shown how to distinguish one insurer’s policy wording from another, and why certain wordings cover far more claims, they’ll never know what they don’t have until they have a loss.
Another client learned the hard way when their insurer declared bankruptcy just after a wrongful death claim was served. Industry insiders knew about that company’s difficulties, yet their broker never advised them to make a change. It cost a lot of their own money for making an uninformed choice.
Can insurance be a competitive advantage?
The business buyer who recognizes the strategic value of a tailored protection program is also able to make decisions that create a competitive advantage from their insurance investment.
A tailored policy wording – with the right terms and conditions that fit your protection needs can make a huge difference – not only in loss payments, but also in accelerated timing of payments, fewer limitations on full replacement, minimal exclusions for certain types of loss, and on and on.
Understanding your key risks and having a pro-active broker negotiate with underwriters on your behalf, can give you a tailored protection program that responds just the way you need it to in difficult times.
Client success ~
Some clients have had great success updating and refreshing their broker relationships to get knowledgeable, reliable and pro-active service, while improving coverage and even saving money! Read an example here – Case Study.
How have you benefitted from specially tailored insurance coverage? Join the conversation here.