What follows are five commercial insurance mistakes I see consistently that cost businesses money, yet they are easily avoidable:
Commercial Insurance Mistake #1 – Tolerating Waste
This one is easy to identify. If you have a billion dollar property schedule, and you buy a billion dollars worth of insurance, even in this soft market you’re wasting money. Have a PML Study done to determine the appropriate amount of insurance to buy. Even if you double that amount in order to sleep you are better off.
Commercial Insurance Mistake #2 – Not Shopping Enough
Some people have kept the same insurance broker for 20 years. I know of at least four major commercial real estate companies with ‘long term relationships’ that pay more to their insurance broker than a) they know, b) the broker is telling them, and c) is appropriate for the amount of work.
Fidelity and transparency are the order of the day. There are certainly ways to keep a broker honest.
As an example at SIG, we regularly check the marketplace to insure that our client’s are in the best and most competitive market. Are you confident that your broker is doing the same with your bottom line in mind?
Commercial Insurance Mistake #3 – Shopping Too Much
On the other hand, It is definitely possible to shop your insurance too much. There are certain companies that illicit an instant groan from an underwriter at their mention. These companies are playing the game incorrectly. (Inevitably, these are the same companies that end up hiring a risk management consultant, thus incurring more expense, and oftentimes making a bad situation worse.)
A paradigm shift, and a new understanding of their situation, can make all the difference in the world while also saving them significant insurance dollars.
Commercial Insurance Mistake #4 – Website That Raises Red Flags
I see plenty of websites that are right out of an underwriter’snightmare. (More underwriter groaning here) You’ve got pictures of guys on your website walking around in ankle deep water, shouldering over 75 lbs, while carrying a razor sharp knife, and not a cut glove in sight? Really? (I can’t make this stuff up, by the way).
They ask for your web address right before they ask if you have a safety program in place on a standard insurance application. Do not raise unnecessary red flags with the design and images on your website.
Commercial Insurance Mistake #5 – Not Negotiating
You are making a major commercial insurance mistake if you do not negotiate. Nowhere is the old saying “everything is negotiable” any truer than in insurance. EVERYTHING is negotiable. Even your losses. Especially your losses. Negotiate!
Morgan Ryan
Morgan Ryan is a senior broker and forensic insurance specialist at SIG Insurance Professionals. Mr. Ryan has over 15 years of successful experience in many different sectors of the commercial insurance industry. In addition to his advanced technical and market knowledge, Morgan brings a client-first attitude to every relationship. His #1 goal is to provide value to his clients by maximizing and giving time, their most valuable asset. Morgan can be reached directly at (972)490-2311 or via email at morgan.ryan@trustsig.com.
