Issue link: http://palletcentral.uberflip.com/i/1498036
30 PalletCentral • March-April 2023 palletcentral.com with the supply chain delays for replacement parts, the amount of coverage needed in the event of a shutdown has likely increased significantly in the last five years. Utilizing a business income worksheet at every renewal to evaluate the cost of being down is a must to confirm the level of coverage is sufficient. 5. Take advantage of thermoscan and heat detection technology: e biggest exposure (by a long shot) in the pallet industry is fire. In turn, annual thermoscans of the building to detect any hotspots can dramatically reduce the likelihood of claims before they occur. Additionally, spark detection, automatic shutoff systems and temperature sensors (such as the LCR Hallcrest Reversible Temperature Label) can help floor employees recognize the proper time to shut down operations to avoid a costly claim. e current state of the market means that it is more important than ever to be doing everything you can from a loss control standpoint. It can be very frustrating for companies with little to no claims experience to continue to receive large rate increases year over year. e problem has always been that the pallet niche is a severity niche vs. frequency niche. is means that there might not be a problem with consistent small claims, but when there are claims they tend to be large and catastrophic and, in turn, the rest of the industry must pay the piper when these large losses do occur. at being said, you can only control your operation, ownership and management's attitude has always been an incredibly important aspect of the underwriting process. It is important that you continue to invest in your operation and your people so that when you are being underwritten you are considered "best in class" and not "part of the problem." It also never hurts to work with a specialist who knows your specific business. Being familiar with the steps you need to take to be "best in class" is half the battle. Mike Edwards is a senior associate at Lumber Insurance Services (www.lumber-ins.com) in Austin, Texas. As a member of the National Wooden Pallet & Container Association, Western Pallet Association, and the Structural Building Components Association, he and his team bring a niche approach to risk management for businesses in the forest products sector. Contact him at 737.220.1773 or medwards@lumber-ins.com.