Issue link: http://palletcentral.uberflip.com/i/1266845
PalletCentral • May-June 2020 31 Getting 'Best Fit' Company Risk of Loss Insurance INSURANCE By Bob Allaire, MBA, CPCU, ARM ake sure you hae an insurance program that works for you when you need it most. That includes choosing the right company and right broker who understands your needs. To properly protect your business, consider these three approaches: 1 Improve How Your Company Prevents Losses Understand if you have losses, you will pay a lot more for insurance than your competitors. This is not to say that your business will not suffer loss. Underwriters want to know they are writing accounts that prevent loss first and only look to insurance for losses that cannot be prevented. What is different today is the thoroughness of the underwriters' scrutiny of your business. Your broker needs to work with you in this regard – adequate "due diligence" is a must. Further, business owners need to lead by example in communicating a policy in their company that I t is always an unexpected emergency when you to have to tap into your insurance to get your business back on it its feet. Whether it is a weather event, fire, accident or business interruption, such emergencies are never convenient, inexpensive, or easy to navigate. Yet, you can save yourself added aggravation and regret if you set your insurance plan up properly and adequately. To protect wood manufacturing operations against risks of loss, begin with an understanding that your company's operations, assets, and risks are unique. It follows that your broker needs to be diligent to understand your business 'inside and out' to present your risks to the insurance marketplace, negotiate with underwriters and propose appropriate solutions. This is especially important in today's environment: the commercial insurance marketplace has shifted from a buyers' market (arguably the last 25 years) to one in which underwriters leave you less room to negotiate your insurance, especially the price. Double digit annual increases on several lines, increasing deductibles and diluted protection are common. Unfortunately, wood manufacturing operations are in a subset of industries which have been hit particularly hard, especially for property insurance. Primarily due to frequent and high value fire losses, many insurers who write wood manufacturers have discontinued writing wood-related accounts. The limited number of insurers writing offer coverage by proposing rates which greatly exceed the rates proposed in the past, about five times the 'non-wood industry' rate. Due to the nature of the spread of fire losses at wood manufacturing facilities that contain values that exceed $10M, many in the insurance industry believe these increased rates are here to stay. iStockphoto.com/Zenobillis/Konoplytska